Carbon Tax Will Kill Tourism Industry: Australian Tourism Export Council

Tourism firms facing fatal “triple whammy”, industry group claims

By Michelle Hammond
Tuesday, 26 July 2011

The carbon tax, high Australian dollar and declining domestic tourism numbers will be a fatal combination for tourism operators, the Australian Tourism Export Council claims.


ATEC managing director Felicia Mariani says the carbon tax could be the last straw for the tourism industry, which is feeling the effects of the high dollar and dwindling tourist numbers.


Mariani says the impact of a price on carbon will deliver a “triple whammy” to these businesses, forcing them to question their ongoing viability.


According to Mariani, increased energy costs will have an impact across the board, affecting businesses with little capacity to engage more energy-efficient systems.


“There are thousands of tourism operators across Australia with profit margins so low that any increase in operating costs will push them over the edge,” Mariani says.


“While ATEC is working to support these businesses to embrace energy efficiency, many just don’t have the financial capacity to make the big changes.”


Mariani accused the Federal Government of leaving the industry “high and dry”, claiming there is little or no direct support for businesses to transition to a low carbon economy.


Dylan Byrne, head of sustainability at accounting firm BDO, says tour operators will be among the hardest hit, particularly those using diesel fuel or aviation fuel.


“If you are a tourism business with a helicopter or aircraft, your fuel excise costs are going to increase by more than 150%,” Byrne says.


The current tax on aviation fuel is 3.556 cents per litre but this will increase to 10.16 cents per litre by 2014-15. This equates to a 157% increase in fuel tax.


Meanwhile, most tourism operators that use diesel in their business are currently able to claim a refund of around 38 cents per litre via a fuel tax credit system.


But over the next three years, many of these operators will see a decrease in their fuel tax rebate to around 31% cents per litre, representing an 18% reduction in their fuel tax credit.


Mariani says while heavy road transport operators have been given a two-year hiatus from this reduction, along with the agriculture and forestry industry, tourism has been forgotten.


However, the Government has dismissed ATEC’s claims. According to a spokesperson for Federal Climate Change Minister Greg Combet, the impact of the tax on the tourism industry will be manageable.


“While the industry is suffering from the high Australian dollar, the Tourism Export Council’s alarmist claims about the carbon price are misleading,” the spokesperson said.

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