The Australian government’s tobacco excise hikes have led to the “biggest threat” to the nation’s public health. Photo credit: Unsplash, Freerange Stock.
Health minister Mark Butler says Australia’s tobacco black market has “exploded” and now poses the biggest threat to public health, with organized crime taking control of the trade, reports ABC News.
Speaking on Adelaide’s FiveAA radio, Butler said criminal gangs had spread illicit tobacco from Melbourne across the country. "It means that there is violence and arson taking place as rival gangs try to take control of what is a very high-revenue market for them," he said. "It bankrolls all of their other criminal activity: their sex trafficking, their drug trafficking, all of the crimes that have very serious victims involved. From a health minister's perspective, it is now the biggest threat to our most important public health program."
In March, the federal government committed an additional AU$156.7 million to tackle the illegal tobacco trade after a surge of smokers abandoned the legal market.
Cigarette prices have climbed sharply over the past decade due to excise hikes. The duty on a 20-pack rose from AU$10.62 in 2015 to AU$28.06 today. But federal budget figures show revenue collapsing, suggesting many smokers are turning to illicit products instead. The Australian Medical Association warned recently that illegal sales over the past 12-18 months appear to have pushed smoking rates upward, reversing a long-term downward trajectory.
NSW premier Chris Minns said in September it was “ridiculous” to deny that repeated tax increases had fueled the black market and organized crime. "Smoking rates have increased … this would be the only tax in the world where it's doubled but the rate of revenue collection has halved. Something is obviously happening here," Minns said on Sky News. He said he had raised the issue with federal ministers but described hitting a “brick wall,” adding that the government “doesn’t look like they are for turning.”
Butler rejected suggestions that excise increases were to blame. "The explosion in illicit tobacco was ... a product of significant oversupply in the world, dumping of this product on every single country in the world," he said. "[Criminal gangs] are producing cigarettes for AU$2 a packet. What is the reduction in excise that the people proposing that reduction — who essentially are people from the tobacco industry and retail sector — what are they proposing is the rate at which illicit tobacco becomes essentially uncompetitive with a legal product? There is just no rate of reduction you can put in place to outprice these cheap cigarettes ... we are not going to have our public health policies dictated by organized crime or big tobacco."
He said the advice he had received was that enforcement remained the “real challenge.”
Shadow health minister Anne Ruston said the government had “sat on its hands” and allowed the black market to thrive. "If enforcement is the 'real challenge,' then what is he doing about it? It is a clear indictment on the health minister, and his government, that it has taken this long for them to realize the extent of the problem," she said.
Shadow assistant treasurer Pat Conaghan also criticized the government’s policies. "This isn't a partisan issue, it's just common sense. Even state Labor governments are warning Canberra to change course," he said in a statement. "How much longer will the government refuse to admit they got this wrong? How many more billion-dollar budget shortfalls and violent gang incidents will it take before ministers admit that hiking excise in the middle of a black market boom is only making things worse?"