NSW Premier Chris Minns has called on the Federal Government to consider lowering the tobacco excise as the illegal market skyrockets.
The latest federal budget in March revealed that it had lost almost $7 billion in tobacco tax revenue, largely in part to Australians switching to cheaper illegal tobacco and vapes.
Minns said the Federal Government needs to look at how the excise is driving illegal tobacco sales in communities.
“The massive excise has meant people haven’t stopped smoking, it just transferred their sales into illegal tobacco sales.”
Theo Foukkare, CEO of the Australian Association of Convenience Stores (AACS), backed Minns’ call.
“Australia’s now heading toward a situation where the Federal Government can forget about its so-called ‘sin tax’ for smoking being used to fund public health, because what’s left of the declining revenue collected from legal tobacco excise is going to have to pay for the enforcement of illegal tobacco.”
Foukkare said it was extraordinary that had it had even gotten to this point and called for an in-depth review of Australia’s entire framework of tobacco and illicit nicotine product policy with a focus on its tobacco excise taxation settings.
“Tobacco is a price sensitive consumer product. If you put a price on it that is manifestly higher than what people can afford, they’ll find a cheaper alternative and that’s where this incredibly dangerous black market is cashing in – and even worse – they’re using that money to fund the most atrocious crimes as we have heard from Federal Health Minister Mark Butler.”
Foukkare said the Federal Treasury had previously warned that significant tax increases would drive people to the black market.
“They ignored that very serious advice and jacked it up anyway. That’s seen Australian adults flood into the illegal black market and turn to illicit tobacco and dangerous vapes – made in sheds in China with who knows what poisons in them – to save money. This is a public health policy disaster.”
To stay up to date on the latest industry headlines, sign up to the C&I e-newsletter.