CANBERRA, June 5 (Xinhua) -- High fuel prices and high Australian dollar would hurt Australia's tourism industry badly and the sector would need government help to ward off the impact, an industry group said on Thursday.

    Australian Tourism Export Council (ATEC) Managing Director Matt Hingerty said the nation's second largest export industry was under siege from high fuel prices and needed direct government assistance.

    Hingerty's statement was followed by an announcement by the largest airline company Qantas Chief Executive Geoff Dixon to exit markets, cut capacity and replace some Qantas services with Jetstar services to cope with high oil prices.

    "Hopefully the penny will drop that the industry has not been crying wolf, that we have a slowly unfolding crisis, that if we were talking about another sector it would result in major public inquiries and rescue packages," Hingerty said in Brisbane, the state capital of Queensland.

    He said the federal government needed to give financial incentives for Australians to holiday in Australia in the next school holidays to help the industry recover.

    "It's got to happen or there are going to be thousands of small businesses across Australia who are going to go broke, they're on their knees at the moment," Australian Associated Press quoted Hingerty as saying.

    He said high fuel prices had damaged tourism the same way the drought had hit the farming sector.

    "But because our industry is 90 percent small businesses you don't have the catastrophes of car plants falling over and workers walking out with their unemployment cheques in front of TV screens," he said.