Kiwis step up use of Aussie subsidies

New Zealand wineries are stepping up their controversial use of  Australian government rebates originally intended to benefit small Aussie wine producers.

Originally set up to support small domestic producers, the Australian Wine Equalisation Tax (WET) rebate allows winemakers to claim back up to $AUD500,000 (£273,000) annually.

A trade treaty between the two countries has allowed New Zealand producers to access the rebate.

Now the Australian Taxation Office assistant commissioner Tom Wheeler has said they anticipated the total rebate paid to New Zealand producers in 2013-14 to surpass that of the previous years $23 million (£12.5m), reported the Australian Financial Review.

While final figures have not yet been released the ATO estimates it will be higher according to Wheeler: “We, however, expect a slight increase in the number of claimants and rebate claims for 2013-14.”

And while the ATO said New Zealand wine companies have a 100% record of compliance and of acting within the legislation when it comes to WET rebates this has not placated wine industry figures within Australia.

Speaking to the AFR, Winemakers’ Federation of Australia chief executive Paul Evans voiced his incredulity that the competition in New Zealand can continue to receive support from Australian taxpayers at a time when the New Zealand economy was in a strong position and their labour costs were lower than Australia.

“How much more competitive advantage do we have to cede to them?” asked Evans.

“It’s outrageous,” he said.

The rebate came into effect for Australian producers in 2004 and for New Zealand producers on July 1, 2005.

Since 2005 New Zealand wine companies have claimed $122m (£66.5m) in rebates, reported the AFR.