Wine Equalisation Tax rebate - improving integrity and growing exports

Assistant Minister for Agriculture and Water Resources, Senator Anne Ruston
Minister for Small Business and Assistant Treasurer, Kelly O'Dwyer

The Turnbull Government is putting the wine industry in a stronger, long-term position by making a record investment in international and domestic wine promotion, while strengthening Wine Equalisation Tax (WET) integrity rules and reducing the WET rebate. 

"The wine industry has called for reform of the WET rebate based on their concern it has moved beyond the original intent and is being gamed by some to the detriment of the wine industry," Minister O'Dwyer said. 

"The wine industry has been a strong advocate for changes to the WET rebate. The Government has listened, consulted and acted," Assistant Minister Ruston said. 

In a win for Australia's wine industry and local jobs, the Government will provide $50 million over four years to the Australian Grape and Wine Authority to promote Australian wine overseas and wine tourism within Australia to benefit regional wine producing communities. The funding will be provided from 1 July 2016. 

This will open the way to make the most of new opportunities through free trade agreements and will increase current wine exports, which constitute around 60 per cent of wine produced in Australia. 

WET rebate changes 

As a first step, the Government will prioritise introducing additional integrity measures. The associated producer provisions will be amended to help deter artificial business structuring and multiple rebate claims. 

The WET rebate cap will be reduced from $500,000 to $350,000 on 1 July 2017 and to $290,000 on 1 July 2018. Tightened eligibility criteria will be introduced to apply from 1 July 2019. 

Under the tightened eligibility criteria for the rebate, a wine producer must own a winery or have a long term lease over a winery and sell packaged, branded wine domestically. 

The final details on the tightened eligibility criteria, including the definition of a winery, will be resolved through further consultation. 

Excise refund scheme for distillers 

The Government will also extend the excise refund scheme to domestic spirit producers. The refund scheme currently provides eligible breweries with a refund of 60 per cent of excise paid up to $30,000 per financial year. 

From 1 July 2017 producers of whisky, vodka, gin, liqueur and producers of low strength fermented beverages such as non-traditional cider will be eligible for the excise refund scheme The scheme will not be extended to most alcopop producers (i.e. those who purchase the spirits and add the soda and other flavours), nor to wine producers who benefit from the WET rebate. 

"The government is committed to supporting small businesses in the industry, and ensuring the right conditions see businesses grow and expand globally," Minister O'Dwyer said. 

"These changes will provide a boost to the approximately 100 distilleries in Australia who will be eligible for the scheme including many new whisky distillery start-ups in Tasmania."