The Federal Government's proposed carbon tax was the subject of a Senate inquiry hearing today in Mackay in northern Queensland.

The Select Committee on the Scrutiny of New Taxes, chaired by Western Australian Senator Mathias Cormann, heard evidence from eight industry groups and businesses that a carbon tax will have a detrimental affect on them.

Paul Schembri, from lobby group Mackay Canegrowers, says a carbon tax will add significant costs to their bottom line,, but their principal grievance is about international competitiveness.

He says carbon tax will put the Australian sugar industry on an unlevel playing field with other countries.

"We go head to head against Thailand, Brazil, Guatemala, South Africa, those sorts of countries they don't have at this juncture a carbon tax, that makes us less competitive, less profitable," he said.

"We're not saying the sky will fall in but anyone who understands this industry knows that the price can be extremely volatile, the exchange rate can be volatile as well, and whilst we're talking about sugar prices being 30 cents a pound, I do remember them not long ago being five or six cents a pound."

Mick Crowe, from the Mackay Whitsunday Regional Development Corporation (REDC), says he's concern a carbon tax on the coal industry will make investment in the region less attractive and affect the long term viability of mines.

"People are still going to use coal, so what it does is encourage offshore investment with no net gain to the environment, that conceptually in a carbon tax as well for Australia and the local region perplexes me and I think it needs to be addressed," he said.

"If we want to save the environment, let's do things that drive behaviour. A fugitive emissions tax on coal won't stop coal. It just shifts it out of Australia."

Submissions to the inquiry close on August 15.

There are still public hearings to be held in Canberra, the Latrobe Valley and Geelong.



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