Australian winemakers have been handed a tax break in the 2004-2005 budget, estimated at more than A$300m.

Under the plan, the government will rebate A$290,000 of wine equalisation tax (WET) a year to most wine producers from 1 October, according to Treasurer Peter Costello. "The effect of this decision is to exempt A$1m from each producer's domestic wholesale wine sales from the WET on an annual basis," he said in a statement.

The move comes after a long-running lobbying campaign by over 1,500 Australian winemakers since WET was introduced as part of changes associated with the introduction of a goods and services tax in 2000.

The new arrangement will reduce compliance costs for all wine producers, with around 90% of them receiving a benefit that will entirely offset their WET liability, Costello said. The changes will provide major benefits to the wine industry, with around 85% of the benefits to be received by small producers, he added.