FLOW FM WITH RIKKI LAMBERT
THURSDAY, 17 FEBRUARY 2022
SUBJECT: UK-Australia Free Trade Agreement; UK wine tax changes.
RIKKI LAMBERT, HOST: Madeleine King is the Shadow Minister for Trade and Resources. How are you today, Madeleine?
MADELEINE KING, SHADOW MINISTER FOR TRADE: Yeah, very good, thanks, Rikki. Good to be here.
LAMBERT: Well, we do have some wine producers in several parts of our broadcast areas. And they have been talking regularly about the frustration about the Chinese or a restriction on trade into there. The UK Trade Agreement has been talked about by the Federal Government. They've been saying wine producers can look forward to sending to that destination. But there's a bit of a sting in the tail I see.
KING: What we've found out is that the UK-Australia Free Trade Agreement has been pushed about as a really great thing for red wine producers. And to be fair, during negotiations, everyone thought that, right? So you would have red wine producers wouldn't have to pay tariffs on the wine going into Britain. But what we found out last night in Senate Estimates is that, in the last month of negotiations, the Department and the negotiators and the Government found out that Britain was intending to review it domestic alcohol tax policy.
And what that means or what that meant is that all the benefits of the tariff reduction for the red wine industry has been wiped out by a change in policy of the British government in respect to its internal tax position on alcohol. And how it affects Australian wines is we, because of the sunshine, the things we love, you know, in the warmer temperatures, we have a greater alcohol percentage in our wines. And they're going to increase the taxes on the basis of those alcohol percentages, which means now, or when they introduced it – which has yet to happen, and there are submissions going on, and red wine producers are submitting ideas to work with the UK Government about this – but it's looking increasingly likely that every kind of advantage, the Government says it got out of the FTA with the UK for red wine producers has been entirely wiped out. And in fact, it's probably going to cost them more with this new tax being implemented by the UK Government.
LAMBERT: Is it a domestic tax like a volumetric tax that's been debated here in Australia The British are bringing in or is it specifically targeting Australian wine?
KING: No, it's not targeting Australian wine, it's all wine to sold in Britain. I want to be clear, they're not targeting us specifically. There'll be a change to the taxation on all wine. But how it affects Australia is just the nature of our wine, right? Because of the summer heat that we have, and the stronger wine, with that higher alcohol percentage, is the nature of Australian wine. So we're at a natural disadvantage importing into that market, whereas European wines will have a lower alcohol percentage and therefore will have a lesser tax placed on it. So you know, UK is trying to be fair, I guess. But the fact is, there was a negotiation going on, and I would have thought that if you could see this coming, which the Government did see it coming, they might have said "Steady on, we're going halt negotiations for a moment while we look at this and see what actual benefits we can get for the red wine producers of Australia".
LAMBERT: Do you have some concerns also about the pace at which this Treaty's being resolved? I guess, if there's a change of Government with the sitting day periods, this could be a Free Trade Agreement that Labor ends up being the ones dotting the I's and crossing the T's.
KING: Yeah, that's right. And, there is an important time of scrutiny for these trade agreements that Australia has, but also that Britain has. And you've got to remember that Britain has been part of the European Union for some time, this is going to be one of their first trade agreements outside of the European Union. So their government and the community rightly wants to have a good look at it. So it's expected that that will take months within Britain. But what we found out last night is that, while the Department here knows that we have a long standing convention (introduced by Alexander Downer one of the fine South Australians) of 20 joint sitting days to consider the treaty text, that the Minister is looking to avoid that scrutiny and bring the bring the time down so he can rush it through in the dying days of this Parliament. And it's really not acceptable because trade is a bipartisan issue. We want a UK Free Trade Agreement too, because it benefits many industries. We just want the best one possible.
LAMBERT: All right. Well, we'll see what the Minister's office has to say about this one. But thank you very much for speaking up about this for the wine industry today, Madeleine King, Shadow Minister for Trade and Resources. Thanks for joining us on Flow today.
KING: Thank you very much. The red wine industry of Australia is the best in the world and I'll stand up for it every single day.