Wine industry warns on tax rebate

The wine industry is warning that any move to cut the wine equalisation tax rebate would drive small- and medium-sized wineries to the wall.

Executive director of Wine Grape Growers Australia, Mark McKenzie, says the rebate is especially important during times of drought and financial woes, when sales are lower.

"It was bought in to deliver an offset to the impact of GST to wineries - they are a very important part of regional economies and the [Federal] Government would tinker with the wine equalisation tax at great risk to itself electorally as well as to the economy," he said.

The rebate of 29 per cent of the wholesale value of domestic sales benefits hundreds of wineries.

Mr McKenzie says any cut would have a wide impact.

"It's not a good look for wineries, it's not a good look for people who are employed in the industry, it's certainly not a good look for wine grape growers who supply those wineries and it's not a good look for regional economies," he warned.