One fifth of all revenue raised by Australia's passenger movement charge (PMC) is given back to the travel industry through grants, according to tourism minister Gary Gray.
The comments come in the wake of criticism by International Air Transport Association (IATA) boss Tony Tyler who claimed the tax does "economic damage" to Australia and is a barrier for potential tourists.
"The charge of $55 also funds a range of border protection and transport security measures that help provide consumers with the confidence to fly," Gray, pictured right, said.
Tyler had suggested that the PMC was not only having a negative affect on air traffic out of Australia, but that its scrapping would potentially create 17,000 jobs.
However, Gray said that since the July 2012 lift in the PMC from $47 to $55, passenger numbers had grown by 5%.
"It needs to be considered in the context of an Australian tourism industry that is worth $107 billion. It is the eighth largest by visitor spend, with average international visitor spending almost $5000 in Australia," Gray said.
