That WET Debate, Rebate

Small Wineries and the WET Rebate

The Wine Tax issue is coming to a head at the moment.  It seems that everyone (Drinkster) is talking about it, including myself, but it seems to be that it is all just a lot of ranting.

Lets set the scene first.  When GST came into effect in on July 1, 2000, it abolished a lot of taxes, duties and levies and claimed it would simplify the tax system.  This would also abolish the current Wholesale Sales Tax on wine (41%) and potentially reduce it to the GST 10%.  "We can't have that" says the government, and it adds in a 29% Wine Equalisation Tax.  This plus the GST 10% on top resulted in an effective tax rate of 42%, thanx.

Well what happened from here is that some of the smaller guys started to hurt.  They asked the Winemakers Federation of Australia (WFA) to help and they came in guns blazing and lobbied for a rebate.  This is a refund of the WET (29%) on the first $1 Million of wholesale sales.  Ka-ching.

What has this resulted in?

1. An Ad-Valorem tax system, one that is based on value.  Cheap wine pays less tax than expensive wine
2. Cask wine is now the cheapest taxed product, per standard drink, with around $0.05 tax per standard drink, whereas mid-strength beer is around $0.32 per standard drink

Cask wine is now identified as one of the leading products used by alcoholics.  How do we protect against it?  What the government always does, increase tax.  But raising the WET would proportionally hurt the smaller guys more, as there wine costs more.  And also we are one of the most taxed wine countries in the world.

Well there is another method, one that has been used by the other categories of beer and spirits.  It is an excise based on alcohol content, the more alcohol, the more tax, independent of value.  The basis for a Volumetric Tax is that the cheaper cask wine would then be adequately taxed and reduce harm.

All very well and good, I am all for the reduction of the harm and evils of alcohol, but what about the small guys?  The fear is that if the WET goes, so does the WET rebate, which is helping prop up these little guys.  Well lets work out an example.  Lets take a 4L cask at $12, a bottle at $10 and a bottle at $30, all at 13% alcohol. Currently the 4L cask pays $0.06 in tax/StD, the $10 bottle pays $0.27 in tax/StD and the $30 bottle pays $0.80 tax/StD.  Assuming that the $30 guy is getting his full refund for being boutique, then for every direct sale he pockets $21.14 plus the WET to give $27.27.

Now Treasury Wine Estates have made calls for the volumetric tax to be set at $12.50 per litre of alcohol, which equates to a tax of $0.16 per standard drink.  This is a "revenue neutral" level, in that the overall revenue to the government would not change.  Now lets apply that to our three wines, but lets assume that they keep their shelf price for marketing reasons.  They all pay the same tax per standard drink, but the value to the owner changes a little.  The value of the $30 wine to the little guy has gone from $27.27 (including his WET rebate) to $26.05, the $10 has changed from $7.05 (without rebate) to $7.87 but the cask wine has changed from $8.46 to $4.41, almost half the return of previous.  

As you can see the change to the little guy is not going to massively affect them, and if the WFA could wheel out Brian Crosser and Ian Sutton (they originally secured the WET rebate) to negotiate an excise rebate on the first $500,000 worth of sales, then everyone could be happy? Right?

Wrong.  There is one guy who is going to hurt.  He is already bleeding from every orifice and does not need much more pushing to drive him over the edge.  He is the bulk wine grape grower with unsecured contracts. His prices will be driven down further, or worse, no one will want his grapes.  It will drive grape growing out of the hot irrigated areas.  And this would be devastating for many families and communities.

And does this fit in with what Wine Australia is promoting?  Quality wines with regional distinction as opposed to a wine lake of questionable cask quality? Hmmm.

I think a volumetric tax would be great for the future of the Australian wine industry but it will come with some pain, pain that may be needed. Like ripping a bandaid off quickly!

<End Rant>

Have you had your #HugWinsor today?

On last nights show we had Winsor Dobbin in the studio.

He is a wine, food, and travel journalist and has currently moved down here to TasVegas.  We had a delightful chat about how he got into the industry, what being a journo involves, and how to get into it.  But what I really wanted to talk about was the internet.

Now that everyone is connected via Facebook, Twitter, Linkdin, etc, everyone gets to be a critic (including Winsor with this Twitter spat with George Calombaris).  Will this diminish the value of professional critics like Winsor in the future?  He believes there will always be room for "informed opinion" and I tend to agree. Audio here:  

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I like how Winsor stated that wine should be serious with a little fun.  Well there is a little bit of internet fun going on involving Winsor.  Actually it's more like a phenomenon.  Its called Hug Winsor.  I believe this was started by Dan Sims and  Mike Bennie.  And what is it?  Well if you spot Winsor anywhere, you get a photo of yourself hugging him, then post it to Twitter with #HugWinsor.  Silly enough really.  And Winsor gets around to enough tastings in Australia that I am sure you will find him somewhere.  There is even now a Facebook page.  Here is just a little taste of some of the joy including my #hugwinsor in the studio.  But remember to ask for Winsor's permission as we don't want him Hug Mugged!

Romanesco broccoli, or Roman cauliflower

Check out this beauty from the garden.  

Its a Romanesco broccoli, or its a Roman cauliflower.  It taste more like cauliflower than broccoli and it had a real nutty flavour.  But the thing I love about it is the patterns.  It takes me back to all those fractal patterns that were such the rage back in the 90's (?).  


Will we grow it again, you bet.


Here are some better pictures from Wikipedia

Jamie Olivers Asparagus and Potato Tart

I have Asparagus coming up all over the place in garden.  It is going nuts!  

We are at the point now that we have to hunt out recipes to enjoy it.  Found this one in one of our books.  It is absolutely to die for.  I also think that the cheesy potatoey base could be used to hold any vegie, cherry tomatoes, roasted capsicum, etc.


Loving it

Jamie Olivers Asparagus and Potato Tart

500g potatoes, peeled and cut into chunks
sea salt and freshly ground black pepper
500g asparagus spears, woody ends removed
200g filo pastry
100g butter, melted
100g freshly grated Lancashire cheese
100g freshly grated Cheddar cheese
3 large organic or free-range eggs
1 x 284ml pot of double cream
1/4 of a nutmeg
Put your potatoes into a pan of salted boiling water and cook for 15 minutes. Meanwhile blanch your asparagus in a seperate pan of salted boiling water for 4 minutes, and drain in a colander.

Preheat your oven to 190C. Get an oven-proof dish - I've used different shapes and sizes. Layer the sheets of filo pastry in the dish, brushing them with melted butter as you go and letting about 2.5cm hang over the edge. You want to get the pastry about five layers thick. Put a clean, damp tea towel over the top and put to one side.

When the potatoes are done, mash them with the cheeses. In a separate bowl, mix together the eggs and cream and stir into your cheesy mashed potato. Grate in the nutmeg, season well with pepper and mix together. Spread the mashed potato over the filo pastry, then bring up the sides of the filo and scrunch them together to form a rim. Take your blanched asparagus and line them up across the filling, making sure you cover it all. Brush all over with the remaining melted butter and put into the preheated oven for around 20 minutes, or until golden and crispy. Allow to rest for 10 minutes. Serve just as you would a quiche, for a quick lunch or supper, with a salad.

Tino Carnevale

On Tuesday night I interviewed Tino Carnevale.  And it was so much fun.

We chatted about how he got to where he is now, the Stephanie Alexander School Gardens project, and about getting started when growing your own food.

I fully agree with him that the first place anybody should start when growing food is herbage.  Herbs are so darn expensive and you have to buy a whole bunch at a time which usually liquefies in the bottom of the freezer.  But growing your own can be so rewarding.  I think position is very important, you want the herb bed close to the kitchen so you can run out there, mid cooking, grab a handful of herbs, and bang, throw it in the pot.

And the best thing is that everything will taste awesome.  Start off with rosemary (goes with lamb, hard to kill), parsley (goes with anything, keep planting it, or let it go to seed and it will sprout everywhere), and coriander (goes with asian, same growing for parsley)

And here is the audio from the show

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First Post

What to say on your first Blog post, ah, hi.

Why have I started a Blog, well I have a little radio program called Booze an Nosh where I discover what makes the local chefs and producers tick.  And I really enjoy it.  So I have started this blog so I can go further, discover more, and venture in to the world of VodCasts.

So about me: I am the winemaker for Pressing Matters in TasVegas, I am very passionate about my garden and growing what I eat, and I have developed a great love of good food and finding great new recipes.

So strap in, I will see what I can find.

Cheers
Paul Smart