Tourism faces carbon tax 'triple whammy'

Australia's carbon tax, the high Australian dollar and declining domestic tourism numbers will be a fatal combination for tourism operators, according to the Australian Tourism Export Council (ATEC).

Analysis by audit, tax and advisory firm BDO has found Australian tourism businesses face electricity increases of 30% or more, with a significant impact on operators reliant on diesel or aviation fuel who face a reduction in their Fuel Tax Credit of 18%.

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 claims 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.

Mariani explains "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.

"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.

BDO Head of Sustainability, Dylan Byrne, says tour operators will be among the hardest hit, particularly those using diesel fuel or aviation fuel.

Byrne states "if you are a tourism business with a helicopter or aircraft, your fuel excise costs are going to increase by more than 150%."

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 Federal Government has dismissed ATEC's claims with a spokesperson for Federal Climate Change Minister Greg Combet, saying 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."

Images: A Qantas plane flys over Sydney (top) and the Great Barrier Reef - threatened by climate change (below).