‘Completely unjust’: New tobacco price hike a ‘legal form of extortion’

Aussies will be hit by a major price increase from today – and according to Caleb Bond, the reason behind it is “all smoke and mirrors”.

COMMENT

Holy smokes – the cost of a packet of durries has gone up again.

The tobacco excise is just about the only legal form of extortion. It’s cloaked, of course, in the virtue of public health because we don’t want those awful smokers clogging up the hospitals after clogging up their lungs.

Never mind that it is all smoke and mirrors (pardon the pun).

Today – Sunday, September 1 – means a 6.8 per cent hike in the tax on cigarettes, making an expensive product even more unaffordable.

I can hear you all moaning from here – much of the 90-odd per cent of people in Australia who don’t smoke couldn’t give a toss if smokers are charged more to indulge in their vice.

But you should. In part because it’s completely unjust and also because it is helping fund organised crime.

As I’ve been writing for the past decade, the tobacco excise is not really about lowering the rate of smoking. It’s all about extracting as much tax as possible from smokers.

A packet of cigarettes in Australia, on average, costs more than $A40 compared to about $A13 in the United States.

The tax increase is ‘completely unjust’ and also ‘is helping fund organised crime’. Picture: iStock

Motley Crue drummer Tommy Lee rudely discovered this discrepancy last year when he was slugged $A62.99 for a packet of Marlboro Gold 25s in Melbourne.

And, despite the huge difference in cost, the daily smoking rates for Australia and the US in 2021 – the last year for which we have comparable statistics – was 10.1 per cent and 11.5 per cent of adults respectively.

The massive tax clearly does not reduce smoking by any great margin but it does line the pockets of the federal government.

According to the ATO, the total tobacco market – including illegal products, to which I will get in a moment – contracted 34 per cent between 2015-16 and 2020-21 despite the tax take increasing 43.7 per cent.

Sell less, make more. What a great business model.

The Australian daily smoking rate fell even further to 8.3 per cent in 2022-23, which coincided with the use of e-cigarettes increasing by almost three times – a product that is largely sold on the black market.

And that’s the other problem with the ever-increasing price of cigarettes – it drives people to illegal products such as vapes and chop chop which are peddled by organised crime gangs to fund their gruesome criminality.

You can hardly blame people for buying illegal cigarettes when they retail for about $A20. They can be purchased in just about every tobacconist and convenience store across the country.

Caleb Bond says you can hardly blame people for buying illegal cigarettes when they retail for about $A20. Picture: Tricia Watkinson

Holy smokes – the cost of a packet of durries has gone up again. Picture: iStock

Nor can you blame them for buying an illegal vape which lasts about a week and costs roughly $A50.

That price has doubled, though, since the Albanese government implemented its vape ban.

You can still buy them everywhere, but the perception of them being harder to buy gave criminal gangs carte blanche to jack up the price and thus their profits.

The Hells Angels ought to send a letter of thanks to the prime minister.

Every single one of those illegal packets of cigarettes equals tax on which the government is missing out.

The federal government has, for the first time, forecast a reduction in the tobacco excise take despite the tax increasing.

The ATO believed illegal cigarettes to make up 13 per cent of the tobacco market in 2021-22.

That has undoubtedly grown since – cigarette manufacturer Phillip Morris believes it now makes up a quarter of the market.

It has created gang wars, particularly on the streets of Melbourne where rival groups are firebombing shops in an effort to control the distribution of illegal cigarettes.

At least 95 businesses have been firebombed since March last year. That’s how big and lucrative the illegal cigarette trade is for organised crime.

And it will only get worse thanks to this excise increase.

The federal government is growing the illicit tobacco market and boosting criminal profits that lead to murder and sex trafficking.

But it’s all in the name of health and safety.

Originally published as ‘Completely unjust’: New tobacco price hike a ‘legal form of extortion’