All tourists visiting Australia would be forced to take out health insurance under a proposal being spruiked by NSW.
But the state's peak tourism body believes it's not worth the risk and could dissuade people from wanting to travel Down Under.
Health Minister Brad Hazzard wants his state and federal counterparts to support a plan requiring tourists on temporary visas to get private insurance, extending conditions that already apply to foreign students and some working visa holders.
"Every time an uninsured visitor does not pay for their treatment in one of our public hospitals, taxpayers foot the bill," the minister said in a statement on Thursday.
Uninsured visitors rack up an estimated $30 million in unpaid medical expenses in NSW every year.
However, Tourism and Transport Forum chief executive Margy Osmond said existing taxes already ensured the government picked up a considerable "slice of the action".
"Given the size of the tourism industry and the contribution it makes and the relatively small number of people being caught up in the process ... I think we're already making a very substantial contribution," she told ABC Radio.
"Any additional tax dissuades people from visiting Australia."
The average Chinese visitor spends more than $8500 in Australia, most of it in NSW, Ms Osmond said.
NSW Labor is concerned the requirement will result in an "explosion" of junk travel health policies that are essentially "worthless".
"This will result in both the tourist and the NSW taxpayer being ripped off," Labor health spokesman Walt Secord said in a statement.
