Dr Lockwood Smith MP
National Foreign Affairs and Trade spokesman
12 May 2004

Australian move will hit Kiwi wine exporters

A move by the Australian Government to give tax relief to wine producers will put New Zealand wine exports at a huge disadvantage, says National's Foreign Affairs and Trade spokesman, Dr Lockwood Smith.

He is commenting on an announcement in yesterday's Australian budget of a $290,000 annual rebate to every producer, resulting in A$300 million of tax relief to the industry over four years. It will apply from 1 October this year.

"This could prove to be a big blow to New Zealand wine exporters as it will give Australian producers a significant price advantage in their market," says Dr Smith.

"It is the equivalent of a subsidy to domestic producers. It is a serious trade issue, and raises concerns about Australia's CER and WTO undertakings.

"It follows hard on the heels of an aid package to Australian sugar producers, and could damage Australia's credibility as leader of the Cairns Group.

"At the very least, CER would have required consultation with New Zealand, and Trade Minister Jim Sutton's silence begs the question as to what the Labour Government has done to try to prevent the imposition of this trade barrier.

"The Government must act quickly on this.

"It is ironic that what amounts to a serious threat to free trade has been introduced in the week that the idea of a single Australasian market is on the agenda for the inaugural Australian New Zealand Leadership Forum in Wellington," says Dr Smith.

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