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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-04-06 Daily Xml
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CELLAR DOOR SUBSIDIES

The Hon. J.A. DARLEY (14:51): I seek leave to make a brief explanation before asking the minister representing the Treasurer a question with regard to cellar door subsidies.

Leave granted.

The Hon. J.A. DARLEY: In 1997, following a High Court decision which invalidated state liquor licensing fees, the government introduced a liquor subsidy scheme to help offset the federal government's 15 per cent wholesale sales tax surcharge on liquor. This subsidy was to help promote and grow the South Australian wine industry. In 1998, this subsidy was capped at a rate of $450,000, indexed upwards annually by 5 per cent for three years.

The current rate for the subsidy is $521,000 per producer; however, I understand that as of 1 July this year the cap will be cut to $50,000. I understand that South Australia's wine industry, which is internationally respected and one of the state's largest tourism drawcards, was developed as a direct result of this subsidy being available.

Much of the attraction of the South Australian wine industry is for people to visit the many small wineries and take part in cellar door sales in regions such as the Barossa and McLaren Vale. The subsidy enables small wineries to hire staff and grow their cellar door sales. I have been told that the largest dollar impact of this measure will be felt by the Barossa Valley which, as I previously mentioned, is a significant tourism region that has world recognition.

The decrease in the subsidy cap is especially detrimental to smaller producers, some of whom, I am told, will have to close their cellar door sales and dismiss staff. My questions to the Treasurer are:

1. Why was the decision to cut the subsidy cap made?

2. Was there any thought to gradually reducing the subsidy cap over a number of years rather than cutting it so dramatically?

3. Was there any consultation with the wine industry to discuss the implications of reducing the subsidy cap?

4. Have any provisions been made to minimise the impact of the reduction in the subsidy cap?

The Hon. B.V. FINNIGAN (Minister for Industrial Relations, Minister for State/Local Government Relations, Minister for Gambling) (14:53): I will refer those questions to the Treasurer in another place and bring back a response. Indeed, there was a budget measure relating to cellar door subsidies and, as all members are aware and as we have outlined many times, the budget is under pressure given the fall in projected revenue and the number of difficult decisions that were taken as part of that budget process.

The wine industry is, indeed, very much an important part of the economy of the state. The state and federal governments do quite a bit in a general sense to support the wine industry and ensure that it remains a competitive and important source of employment. In relation to the particular impact of the cellar door subsidy question, I will refer that to the Treasurer.

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