The Federal Government has announced a $156.7 million investment to combat Australia’s illicit tobacco trade, but retailers say it fails to address the root causes of the issue.
The investment, which adds to the $188.5 million invested in January 2024, includes further funding for the Australian Federal Police (AFP), increasing international collaboration, extending health campaigns, and boosting border detection technology.
Theo Foukkare, CEO of the Australian Association of Convenience Stores (AACS), said the plan does not go far enough, falls well short of the funding needed to address the crisis, and will target the wrong people.
“We have seen crackdown after crackdown and funding announcement after funding announcement from consecutive governments about illegal tobacco, and none has worked.
“Today is no different – it treats the symptom of the illegal tobacco wars, not the cause – and the $156 million fund to try and stop the crisis once and for all is just a drop in the ocean compared to the huge profits being pocketed by these criminals.
“The Federal Government plan is like trying to use a nut to smash a sledgehammer.”
Foukkare argued that without stopping illegal tobacco imports and pausing excise increases on legal products, the black market would continue to thrive.
A recent report by Tulipwood Economics, commissioned by AACS, predicts illicit tobacco consumption will overtake legal sales by 2026-27. The report suggests that freezing excise, legalising and regulating vaping products, and a more aggressive border crackdown could generate an additional $18.6 billion in excise revenue over four years.
“If the Federal Government ignores these warnings, taxation revenue is forecast to decline from $8.3 billion in 2025-26 to $7.6 billion in 2028-29, while demand for illicit tobacco will increase from 3.3 million kilograms annually to 4.3 million kilograms,” Foukkare said.
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