The awaited release of the Federal Government’s May budget on Wednesday has sparked much discussion and speculation among the alcohol industry over the past week.

The Australian National Retail Association (ANRA) says it is encouraged by recent reports, which suggest that the budget will begin to address the integrity of GST to goods and services purchased online and offshore. However, ANRA CEO, Anna McPhee said the association will be waiting to see the outcome of the budget announcement next week before getting too optimistic.

“Retailers are encouraged by the Federal Government’s first steps, but intangibles are just one aspect and goods also need to be acted on to address tax integrity fully”, Ms. McPhee said, adding: “We must strengthen the integrity of Australia’s tax system and ensure similar types of goods and services consumed domestically are taxed in the same way, no matter how that purchase occurs.”

The wine industry on the other hand has polarised into last minute advocacy, with hopes of adding to the Government’s decisions before Wednesday’s announcement. The Winemakers’ Federation of Australia (WFA) has unified in what it’s calling an “unprecedented demonstration of unity” to ask Government for one-off funding in next week’s budget.

Specifically, the WFA is asking Government for a $25 million input, spread out over four years, to help boost the marketing activities undertaken by its statutory authority.

The WFA’s proposal for additional funding to grow demand has the backing of Wine Grape Growers Australia, Wines of Western Australia, South Australian Wine Industry Association, Wine Tasmania, Wine Victoria, the New South Wales Wine Association and Queensland Wine Industry Association, as well as wine regions including Riverland, Riverina and Murray Valley.

“Together we are saying we need Government’s urgent help to seize the market opportunity and to help reengage global wine buyers,” Federation Chief Executive Paul Evans said.

Throwing uncertainty into the mix this week as to what will be the outcome of the Government’s decision to WET reforms however, was the Assistant Treasurer, Josh Frydenberg’s announcement that the Treasury will be preparing a discussion paper on the Wine Equalisation Tax (WET) rebate, later this year. So much so, that journalists at Winebiz have suggested that the announcement means that the wine industry’s calls for reforms to WET will no longer be addressed in Wednesday’s budget. Mr. Evans from the WFA also said, after meeting at a “specially convened industry roundtable held with the Assistant Treasurer on Monday in Canberra”, also reported by Winebiz, that WET reforms will not be addressed in the May budget.

While drinks bulletin can confirm from sources that the Treasury will be preparing a paper on WET later this year, there is still uncertainty around whether or not it will be removed from Wednesday’s budget altogether.

Frydenberg said: “The Government will ask the Treasury to prepare a discussion paper on the operation of the Wine Equalisation Tax (WET) rebate to help inform consideration of the issue as part of the Tax White Paper process.”

“Growers and producers have raised concerns whether the current operation of the WET rebate is continuing to meet the original policy intent.

“The discussion paper will be released in July and will form part of the Government’s Tax White Paper process which is examining how we can create a tax system that supports higher economic growth and living standards, improves our international competitiveness and adjusts to a changing economy and new opportunities.”