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NEW ZEALAND: NZ challenges Australia's WET rebate

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New Zealand has warned Australia that it may be in breach of trade rules, following the country's tax break for its wine growers. New Zealand Foreign Affairs officials have told ministers that the tax deal, announced in Tuesday's budget, may breach the 20-year-old Closer Economic Relations free-trade agreement.

Speaking to the Australian press, New Zealand Finance Minister Michael Cullen said: "The rebate that the Australian budget announced for Australian wine differentiates on taxation between Australian producers and New Zealand producers, which, on the face of it, is a breach. I would hope that a way can be found that will preserve both the spirit and the letter of CER."

On Tuesday, the Australian government announced the $340 million tax deal for winemakers, working out at a wine equalisation tax rebate of A$290,000 a year to most wine producers from 1 October.

According to NZ Winegrowers boss Philip Gregan, a bottle of Australian wine could cost about 25% less than a similar New Zealand wine sold in Australia.


Sectors: Wine

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