Australia Set To Introduce Goon Sack Tax

Winemakers have hailed tax changes in last night's Federal Budget that will go some way towards stopping the flood of cheap wine into the Australian market.

The government has introduced measures to stop wine producers 'gaming' a rebate system originally intended to provide assistance to rural and regional producers.

Under the Wine Equalisation Tax (WET), wine is taxed at 29 per cent of its wholesale value, and a tax rebate of up to $500,000 is available to wholesalers.

Under the changes, the rebate will be cut from $500,000 to $350,000 from July 1, 2017, and down to $290,000 the following year.

Eligibility rules will also be tightened. Wine producers wanting to claim the rebate will have to own a winery or have a long-term lease on one, and sell packaged, branded wine domestically.

The government says the changes will "better target assistance and reduce distortions in the wine industry".

"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," Assistant Treasurer Kelly O'Dwyer said.

The Winemakers Federation of Australia has long called for reform of the WET, and a recent Senate inquiry heard how the system was being rorted by wine cellar door operators and growers who went into wine making so they could claim the rebate.

Tony Battaglene, acting chief executive of the Winemakers' Federation of Australia, said many such operators ran online-only businesses. He said the WFA had been trying for two years to have the WET rebate fixed.

"A lot of people have been accessing the WET rebate where it was not originally targeted, and that's where the bulk of unbranded wine comes from," he told news.com.au. "The rebate was intended to help cellar door, regional producers."

Read the full story at NZ Herald