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Wine rebate may breach NZ trade deal
4 Jun 2004
Senior trade officials said yesterday that the Government's Budget rebate for small wine producers was designed without regard to possible breaches of Australia's treaty obligations. New Zealand has slammed the rebate as a breach of the free trade agreement between the Australia and NZ, which requires taxes to apply equally. The NZ Trade Minister said the rebate could also breach Australia's WTO commitments, which limit subsidies to farmers. NZ may take Australia before the WTO or a trans-Tasman disputes panel.
Australia's $100 million-a-year Budget handout will effectively allow local wineries to sell $1 million of wine before having to pay the 29 per cent wine equalisation tax. However there's no such exemption for NZ wineries.
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