22 June 2005 Media Statement

NZ wine producers access Australian tax rebate

Legislation tabled in Parliament yesterday paves the way for New Zealand’s wine producers who export to Australia to have access to Australia’s wine equalisation tax rebate, Revenue Minister Michael Cullen announced today.

“The change is part of a joint trans-Tasman legislative effort that will involve both Australia and New Zealand in the administration of the rebate to New Zealand wine producers who export to Australia,” Dr Cullen said.

“Australia will assess, pay and generally administer the rebate, while New Zealand will be involved in the registration and application processes and, if necessary, carry out any domestic prosecutions for providing false information.

“The necessary New Zealand changes are being introduced by means of a supplementary order paper, tabled yesterday, that adds them to the taxation bill currently before Parliament, while Australia is expected to introduce the relevant legislation later this week.

“Australia introduced the rebate last year to compensate wine producers in part for the 29 per cent wine equalisation tax charged on the wholesale price of wine sold on the Australian market. Wine producers are eligible for a rebate of up to A$290,000 a year.

“I am very pleased that Australia is extending the rebate to New Zealand wine producers who export to Australia, a move that followed strong representation by the New Zealand government and is in the spirit of our Closer Economic Relations agreement.

“Because the rebate is, in effect, a subsidy to enable our producers to compete in the Australian market, it will be subject to New Zealand income tax, as other government grants to business are. Australia also taxes such rebates.

“Once enacted, the rebate will apply from 1 July 2005, with applications expected to be received in mid-2006,” Dr Cullen said.

ENDS

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