Huge figure Victoria could be making if vapes are legalised

Victoria could be making a whopping $765m in extra GST over the next four years if vaping is legalised and treated the same way as cigarettes.

Victoria could rake in more than $765m in extra GST revenue over the next four years if vapes are legalised and whacked with an excise.

Modelling based on a $1.50 per millilitre excise shows the state would receive an extra $149m in 2024-25 in GST, and $179.6m the following year.

In 2026-27, Victoria would get an extra $206m, then $230m the year after.

The findings come as the Coalition mulls over its position on vaping.

If vapes are legalised and whacked with an excise, Victoria could collect $765m in extra GST revenue. Picture: David Crosling

The federal Nationals said they supported vapes being regulated, sold in plain packaging and subject to excise.

The figures are based on the Commonwealth Grants Commission’s most recent GST distribution method.

A whopping 85 per cent of people who voted Labor at the 2022 federal election either agree or strongly agree with vapes being regulated in the same way as tobacco products, according to RedBridge polling of 1500 Australians.

Support was strong in inner and middle suburbs, with 82 per cent agreeing or strongly agreeing to vapes being treated as cigarettes, and 83 per in outer suburbs and 81 per cent in rural communities.

The Coalition is mulling over its position on vaping.

The polling also showed that 45 per cent of people with a “great deal of financial stress” were still “strongly” in support of vapes being regulated the same way as tobacco products.

The research also showed that parents of children under the age of 18 were supportive of vapes being regulated, sold in plain packaging and not marketed to teenagers.

More than 80 per cent of mums surveyed said either they strongly agreed or agreed with the proposal, while 77 per cent of dads felt the same way.

Australian Association of Convenience Stores chief executive Theo Foukkare said the federal government’s position of allowing only those with prescriptions to get vapes – and banning disposables – would only push vapers into the criminal market.

Vapes could bring in an extra $765m in GST. Picture: iStock

“Other countries are actively reducing youth vaping in a similar way to alcohol and ­tobacco,” he said. “The government’s priorities are completely out of step with what the community expects and what parents are calling for.”

Economist Saul Eslake said legalising vapes would “undoubtedly” help make up for tanking tobacco revenue but the government must weigh up the health risks.

“The reason revenue from tobacco taxes is declining ­despite the rate of tobacco going up a lot is because fewer people are smoking and that’s a good thing,” he said.

“In an ideal world tobacco tax wouldn’t raise any revenue because no one would smoke.

“You shouldn’t look at this solely through a revenue lens. It would seem to me that in ­addition to the fact that fewer people are smoking, revenue is declining because more people are vaping and there is a lot of criminal activity involved with it.

“You have to decide the costs versus benefits of making vaping a criminal activity.”