Vape regulation would see $800 million windfall

Regulating vape products could help the government raise more than $800 million over four years in GST alone, reveals a new cost-benefit analysis.

The report, released by Llewellyn Consulting and commissioned by British American Tobacco (BAT), suggested that if vaping products were legalised and each of Australia’s 1.1 million vaping adults purchased their products legally, it is possible that over $200 million in GST revenue could be generated each year.

Theo Foukkare, CEO of the Australian Association of Convenience Stores (AACS), said the report shows one of the many costs that the current prescription model for nicotine vaping products is imposing on Australia.

“The $800 million in GST losses is on top of corporate tax losses, the cost to the healthcare system from the prescription model, and the significant loss in trade and incidental purchases from lawful retailers as adult vapers are driven to purchase from the illegal black market.”

Although illegal in Australia, the penetration of vaping products rivals that of New Zealand, France, and the UK.

“The Australian Government must follow the lead of New Zealand, the European Union, and the United Kingdom by making e-cigarettes a regulated and controlled adult consumer product sold by responsible retailers.”

The high prevalence of illicit vaping products is also creating health worries, as the supply of vaping products is not regulated or monitored, the government is unable to monitor the ingredients and device standards.

“A fully legal market, as observed in many progressively regulated vaping countries – such as the UK, France and New Zealand ─ provides greater control over product standards and industry compliance,” stated the report.

Speaking to The Australian, Health Minister Mark Butler said the Morrison Government had dropped the ball on vaping, and that Labour had a proud history of implementing anti-smoking policies, passing plain packaging laws through parliament in 2012.

“Our government is concerned about the increased marketing and use of e-cigarettes, particularly among young people,” said Butler.

Foukkare said AACS welcomes the comments from the Health Minister.

The convenience industry is experiencing significant declines in foot traffic and incidental purchases as over a million adult Australians are choosing to not shop in legitimate retail businesses so they can purchase illicit vaping products from the black market.

“Regulating nicotine vaping products as an adult consumer good would enable the lawful and regulated sale of these products by legitimate businesses. 

“This would not only support convenience stores who are losing trade to the illegal black market, it will also enable to Government to regulate the category with product standards, clear labelling requirements and age identification measures to stop youth access.”

Foukkare said that the previous government’s prescription only model for nicotine vaping products has created one of the largest black markets ever seen in Australia.

“Every day the illegal black market is allowed to run rampant, our industry suffers more declines in foot traffic and incidental purchases, adult consumers risk their safety from buying unregulated products with no standards, and no restrictions are in place to stop youth access.”

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