Two Labor state governments say Federal Labor’s “intolerable” nicotine tax fuelling tobacco wars

The federal government is refusing to say whether it will review the high level of nicotine excise after the Victorian and NSW state governments said it was fuelling the raging tobacco wars.

The federal government is refusing to answer whether it will review the high level of nicotine excise after two state governments said it was fuelling the raging tobacco wars.

Last month Victorian state MP Enver Erdogan – who is responsible for bringing in a tobacco licence on July 1 – said criminal gangs were fighting due to the huge smoke tax on legal cigarettes.     

“It’s clearly led to the creation of this illegal market,” he said.

“Tobacco is an addiction and the illegal product is a lot cheaper.

“The underlying cause (of the conflict) will still be the price of the legal product. We’re seeing that across the nation, this is not unique to Victoria.”

He added: “In every other major city there are similar issues. There needs to be a national approach.”

A packet of illicit cigarettes costs between $10 and $15 while a legal packet has risen to $55-$60.

And there is another tax hike planned for September this year.

Police have released dramatic footage of a arson attack on a Glenroy tobacco store.

On Monday, NSW Premier Chris Minns echoed Mr Erdogan’s comments.

“I’m not arguing the public health benefits of putting an excise on tobacco. But the massive increase (in the excise) has exploded the illicit tobacco marketplace,” he said.

“It’s meant that many people who wouldn’t go near any illegal behaviour, ordinarily, are buying illicit tobacco almost daily, almost from every street.”

He added: “We need to look at how big this excise is and how it’s driving illegal tobacco sales.

“The massive excise has meant people haven’t stopped smoking, it’s just transferred their sales into illegal tobacco sales.

“The current situation is intolerable.” 

Both the Victorian and NSW state governments are Labor who are hitting out at a federal Labor government.

Exiled tobacco kingpin Kazem “Kaz” Hamad.

It comes after the federal government said it expected to earn just $7.4bn in revenue from tobacco excise this financial year. That’s down sharply from $12.6bn in 2022-23 and $16.3bn in 2019-20.

But a spokesman for federal treasurer Jim Chalmers refused to answer questions about whether it would look at the level of tax – the highest in the world.

“Tobacco excise is an important public health measure to encourage people to give up smoking,” a spokesman said.

“More people giving up smoking is part of the reason tobacco excise is down, the other which we’ve acknowledged is the significant problem of illegal tobacco.”

He added: “We are working with states and territories when it comes to the enforcement challenge with illegal tobacco.

“That’s why we invested another $157 million in enforcement and compliance for tobacco in the budget, on top of the $188.5 million we announced last year.”

Victoria has endured more than 140 firebombings, deaths and shootings linked to the illicit trade, with exiled Kaz Hamad and local Fadi Haddara fighting for control.

And in February, Katie Tangey, 27, died while trapped in a burning home. She was completely innocent and died due to arsonists targeting the wrong house.

Originally published as Two Labor state governments say Federal Labor’s “intolerable” nicotine tax fuelling tobacco wars