Western Victorian wine producers have welcomed state government legislation that will help cut down on rorting of the wine equalisation tax.
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Producers were able to claim up to $500,000 in rebates but that has been reduced to a $350,000 cap.
The government introduced the legislation to parliament on June 22.
It is part of reforms that were first announced in the 2016-17 state budget.
Wine Victoria chair and Mount Langi Ghiran Winery’s Damien Sheehan said some wine producers had found ways to game the system, but their ability to do that would be reduced by the new cap.
“You can no longer claim a rebate on bulk wine, you can only claim it on package wine,” he said.
“Removing that access on bulk wine, we believe will, reduce the majority of the rorting.
“There was abuse of the system and a reduced cap makes it less of an incentive to game the system.”
Structurally it is bad for the industry if unprofitable businesses are being propped up by rorting schemes.
- Wine Victoria chair Damien Sheehan
Producers of bulk wine had previously been able to claim the rebate when they sold their wine.
The buyer could then repackage it and double dip into the scheme with another claim on the rebate.
Victoria’s largest producers are the most likely to be affected by the change, with small and medium sized growers not selling enough wine to hit the $350,000 rebate cap.
For producers to hit the older $500,000 cap they had to to make up to 1.7 million in sales.
Mr Sheehan said the changes would benefit the legitimate wine producers.
“They were pretty well aware that these rorting practices have been going on and it doesn’t help,” he said.
“Structurally it is bad for the industry if unprofitable businesses are being propped up by rorting schemes.”
The government has also introduced a new wine tourism grant, to encourage growers to develop cellar doors.