‘No-brainer’: Call to drop Australian cigarette prices amid ‘tobacco war
As the price of smokes skyrocket, so too has violence and shootings linked to the growing black market trade.
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Australia’s rising taxes on tobacco should be frozen or scrapped in order to bring a booming black market – blamed for arson attacks and shootings – in line, a gangland expert says.
Cigarette costs have gone up 67 per cent since 2019 and rank among the fastest-growing prices for any product in the country. It now sits at $1.366 per cigarette.
The taxes have led many Aussies to seek out cheaper illegal cigarettes, which is in turn fuelling a “tobacco war” in cities like Melbourne, where firebombings of retail stores have become common in recent years.
The underworld struggle for market dominance has been linked to gangland murders in the Victorian capital, such as the January slaying of Sam “The Punisher” Abdulrahim.
Criminologist James Martin has told News Corp the excise should be scrapped, or at least frozen, to curb the black market growth.
He said authorities needed to consider the impact of each hike on the bottom lines of figures alleged to be major players in the illicit tobacco world, like Kazem “Kaz” Hamad.
“It’s a no-brainer, every tax increase, if you look at it from the perspective of Kaz, just increases his market share,” he said.
Dr Martin has also encouraged authorities to rethink laws around vaping, saying the current approach to effectively prohibit vapes was doomed to fail.
“You could double the drug enforcement budget which is around three and a half-billion dollars spent nationally on drug law enforcement in Australia,” he told a Victorian parliamentary inquiry last year.
“That’s triple what we spent 15 years ago and despite that, we have increasing rates of illicit drug use, we have increased availability and often lower prices for illicit drugs.
“So this is I think pretty conclusive and damning evidence quite frankly that relying on a law enforcement response when you’ve got these huge economic drivers of black markets is just simply not effective.”
Victoria Police set up Taskforce Lunar in October 2023 to crack down on escalating violence linked to the illicit tobacco trade and has so far arrested more than 80 people.
There have been more than 100 arson attacks on businesses linked to selling illicit products in Victoria, and 19 similar incidents in South Australia.
A poll run by News Corp found 42 per cent of respondents support cutting the tax altogether, while 41 per cent believe it should be lowered.
Treasurer Jim Chalmers, however, has ruled out such action and says the excise is in place to “encourage smokers to quit”.
Smoking rates in Australia have dropped by two thirds since 1991, with 8.3 per cent of people aged 14 and over partaking in the habit in the year ending June 2023.
It remains the leading cause of preventable death in the country and is among the biggest risk factors for burden of disease.
Up to two thirds of long-term smokers are also more likely to die of a smoking-related illness or die 10 years younger on average, according to the Department of Health and Aged Care.
Cigarette prices were hiked by 25 per cent in 2010 and the cheapest packet from a major supermarket is now retailing at more than $30.
Economist Jason Murphy wrote for news.com.au in December that smokers tipped about $10.5 billion into the federal budget, more than the $6.8 billion cost of treating them in hospital.
Illicit cigarette products, meanwhile, have become widely available under the counter at tobacco retailers and only set back smokers $15 or $20.
Mr Murphy wrote that legal options had become so expensive “that normal people are willing to buy black market cigarettes. And organised crime is willing to supply”.
“When a pack costs $12 at the shops, there’s not much profit in undercutting the supermarket giants. But when a pack costs $50 at the shops, well,” he wrote.
“Remember that tobacco and paper are very, very cheap to make, transport and sell. They store easily and don’t need to be refrigerated or kept food-safe. Anyone who has ever bought cigarettes in Asia knows the fair price of the actual product can be very low.
“So if you can buy a pack of cigarettes for 30 cents wholesale out of Asia and sell it under the counter illegally in Australia for $20, the profits are huge.”
In a poll of more than 9000 people on the news.com.au website, 66 per cent said the taxes were punishing the wrong people.
The Australian Border Force (ABF) has targeted illegal tobacco shipments and revealed in August it had seized more than 50,000 products totalling 1.8 billion cigarettes and 436 tonnes of loose leaf tobacco.
It was estimated the seizures deprived organised crime gangs of $3 billion in potential unpaid taxes.
“Organised crime syndicates use illicit tobacco income to fund other illicit activities that cause significant harm to our community – such as illicit drugs,” ABF Commander Ken McKern said at the time.
“Organised crime syndicates pressure tobacco retailers across Australia to buy and sell their illicit product. They use gangs to enforce compliance including torching tobacco shops, standover tactics and shootings.”
Smoking causes most lung cancers as well as cancer around the body and other health issues such as respiratory problems, heart disease and diabetes.
Originally published as ‘No-brainer’: Call to drop Australian cigarette prices amid ‘tobacco war
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