The federal government’s extortionate tobacco taxes are a gift for organised crime | Caleb Bond

It used to be drugs like cocaine that fuelled organised crime. Thanks to the Australian government, now it’s cigarettes, writes Caleb Bond.

The federal government is causing arson attacks across Adelaide.

Victoria’s tobacco wars – in which more than 100 tobacconists and convenience stores have been firebombed as rival gangs fight for control of the illegal tobacco market – have reached South Australia.

There have been 16 alleged arson attacks on Adelaide tobacco shops in a short period of time.

Anyone could have seen this coming.

It will soon hit the rest of the country, too.

And the cause is the federal government’s tobacco tax which is now so extortionate that smokers have no choice but to buy illegal cigarettes to meet their addiction.

A legal packet of cigarettes costs, on average, more than $40 now – about three-quarters of which is tax.

An illicit packet, freely available in many tobacconists and convenience stores across the country, costs in the vicinity of $15-$20.

It’s not hard to see why they’d be big business.

Deakin University criminologist Dr James Martin says that illicit cigarettes now make up nearly a third of the whole tobacco market in Australia.

And like illicit drugs, the illicit tobacco market is controlled by bikies and other organised crime gangs.

Two rival gangs have been fighting in Victoria and have issued threats to South Australian vendors.

Police believe there is also a Queensland gang involved in SA’s emerging war.

This market – worth billions of dollars to criminal gangs and bigger than cocaine – exists ostensibly because of the federal government’s greed.

If cigarettes weren’t so expensive, people wouldn’t turn to illegal products and crime gangs wouldn’t have a business.

Compare the cost of a packet of durries in Australia to the average of about $13 AUD in the United States.

It’s a huge difference – but in the last year for which we have comparable statistics, 2021, the daily smoking rate was 10.1 per cent in Australia and 11.5 per cent in the US.

You’d expect the smoking rate to be much higher in the US given their cigarettes are so much cheaper and yet it makes little difference.

It completely debunks the government’s continual argument that increasing the tobacco excise is about stopping people from smoking.

Adelaide resident Sharon van Homelen near the recently firebombed shop on Sir Donald Bradman Drive at Cowandilla where she brought cigarettes. Picture: Brenton Edwards

Anyone still smoking today, despite all abundant evidence of its damage to one’s health, is doing so because they really enjoy it or because they’re thoroughly addicted – and they are increasingly turning to products that fund organised crime.

The tobacco excise – which increased by 6.8 per cent at the beginning of September – is about revenue raising.

As I have written before, it’s about the coffers rather than the coughers.

The 2024/25 federal budget showed, for the first time in living memory, a downgrade in the expected revenue from tobacco, coinciding with the explosion of the illicit market.

They are so greedy that they’re doing themselves out of tax revenue and funnelling money into the hands of crime gangs that use it to fund murder, sex trafficking and myriad other heinous crimes.

This extortion has been a gift to organised crime.