Festival of Boutique Winemakers

Speech by the Deputy Prime Minister and Minister for Trade The Hon Tim Fischer MP to the Festival of Boutique Winemakers

Renaissance Hotel, Sydney, 18 June 1999

(Check Against Delivery)

Ms Judith Kennedy, Chief Executive, Australian Boutique Winemakers; Mr Huon Hooke, Chairman of Judges for this year's wine show; ladies and gentlemen.

As a loyal and proud associate member of the Association, I am delighted to take part for the third year running in the Festival of Boutique Winemakers. Rarely, in political life, is duty so unequivocally mixed with pleasure as it is very easy to be a passionate advocate of your products. Judith Kennedy reminds me that I conscientiously sampled at least a few of your members' products at last year's festival, and I am happy to volunteer for further sampling duties again this evening.

Wine: Leading the Export charge

As Australia's Trade Minister, I have a duty to pay close attention to your industry, and give it the high praise it deserves - not least because of the lessons we can learn for the development and transformation of our industrial base, for perfecting and packaging the products we sell, and for the growth and diversification of our exports. That our wine exports have recently reached the magical one billion dollar export mark - two years earlier than predicted by industry leaders in the early 1990s - puts you at the vanguard of our export successes which is why I am readily prepared to sing the industry's praises at every opportunity.

The boutique wine industry has a special role to play in demonstrating how Australian ingenuity and enterprise can rise above what could be called the 'commercial cringe', the assumption that anything world-class is necessarily produced overseas. Your industry is accepted by grateful consumers world wide to be of the first rank, and is envied and emulated by its competitors. It is the nicest of back-handed compliments to have some of our competitors label their wine as made "in the Australian style".

Boutique Winemakers: A special role to play

The export success of some of our bigger wine brands can overshadow the fundamental contribution that Australia's boutique winemakers have made to the vibrancy, creativity and passion to excel that characterise winemaking in Australia today. To a great extent, the industry's leading risk-takers, pioneers and innovators are found with your ranks. It is the boutique winemakers who have opened up new winemaking areas, bringing an entirely new industry to numerous regions in Australia, doing pioneering work which the major companies have followed up, to the mutual benefit of all.

Beyond your indispensable contribution to winemaking, I would like to mention two other ways in which boutique winemakers are forging important new paths that others will follow: the economic reinvigoration of rural and regional Australia, and the use of the Internet as a means of conquering the tyranny of distance for small geographically remote enterprises.

Tax reform

I know that you will want to talk to me tonight about the government's tax reforms which are aimed at removing un-necessary burdens on your production processes, further reinvigorating your export efforts, and providing the basis for sustained growth throughout the economy on which your industry depends. You may also want to talk about the Wine Equalisation Tax, and I am happy to defend that revision to your taxation arrangements, as a fair and reasonable contribution by the industry to the economy.

I would note that no GST will be levied on tasting samples used in cellar door sales. Nor will GST be imposed on product effectively given away as sales promotions. Those two provisions demonstrate the government's concern to take account of the specific needs of particular industries, especially, in this case, boutique wine producers like all of you.

Of fundamental importance to your productivity and profitability is the fact that the government has exempted all wine exports from both WET and GST. We fully recognise the vital importance of your exports to growth in the industry, and in the wider economy, and we intend to help you with those export efforts as best we can.

International trade issues

On that subject, I would like to talk to you about our handling of wine trade issues internationally.

We remain concerned at the extent of the tax and tariff burden imposed by some importing countries, including some in our immediate region, and we are working hard bilaterally to have those unreasonable burdens reduced. In addition, we are currently exploring ways to improve market access into the United States market, already worth over $200 million a year to our wine exporters and growing substantially year by year.

Regionally, we are working with the group of New World wine producers - which includes the United States, Canada, New Zealand, Chile, Uruguay, Chile and South Africa - on a program of trade facilitation measures. We want to work closely together in preparation for the next Round of multilateral trade negotiations in the World Trade Organisation (WTO). We also want to explore ways to develop easier, simpler, cheaper methods for recognition of new wine-making practices.

Multilaterally, we are preparing systematically for the next trade Round. Wine trade will be part of the agriculture negotiations, where we are seeking the abolition of all export subsidies. In addition, wine trade issues will arise in the intellectual property agenda for the WTO, particularly in negotiating effective ways, but not unduly cumbersome or expensive ones, to protect Geographical Indications.

Next week, we have another round of negotiations with the Europeans to try to finalise the outstanding issues arising from our 1994 Wine Agreement. I discussed wine matters with EC Commissioner Sir Leon Brittan in April, and we resolved jointly to try to finalise all outstanding issues at this next meeting.

That will be difficult, because there is still a wide gap between our position on the form, level and scope of any protection for Traditional Expressions. Our point of view is simple and clear. We want to negotiate a form of protection which is entirely consistent with our WTO obligations, which does not discriminate against any third country exporters to the Australian market, and which does not disadvantage you as producers as you move away from reliance on terms like "champagne" and "burgundy" to develop our own local designations of quality, and to confirm, with those local terms, the global reputation of our wine.

Conclusion

In all that work, government is consulting closely with your industry. We are working effectively together in partnership. We cannot expect to grow or sell our wine on a level playing field. We have to do our best, working as a team, to improve the market access conditions for the top quality product which you grow and which I am proud to endorse.

Thank you again for this opportunity to speak with you.