Chalmers rules out lowering excise to end tobacco wars
The Treasurer said he was “not convinced” a reduction on Australia’s cigarette tax, now worth $1.40 per stick, would lead to the end of illegal tobacco activity.
NSW
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The Albanese Government has ruled out reducing Australia’s tobacco excise, with Jim Chalmers claiming he is “not convinced… it would be the end of illegal activity.”
Tax revenue on cigarettes has plummeted from a record high of more than $16 billion in 2019-2020, to an estimated total of $7.6 billion in this current financial year.
In that time, the number of businesses registered to sell tobacco in NSW has ballooned from 15,000 to 20,000. This masthead has revealed there are 500 tobacco retailers alone in the electorates held by Premier Chris Minns and Prime Minister Anthony Albanese.
Mr Minns has been critical of the federal excise, now charged at $1.40 per cigarette stick, believing there is an obvious link between the tax increase and organised crime.
Speaking on Wednesday, Treasurer Jim Chalmers said: “I respectfully disagree with Chris (Minns)”
“I don’t think the answer here is to make cigarettes cheaper for people. I think the answer here is to get better at compliance. The Feds have come to the table… with hundreds of millions of dollars in new funding to try and combat the scourge of illegal tobacco” Dr Chalmers said.
When pressed on the growing problem, particularly on Australia’s east coast, Dr Chalmers said: “we have to resist the temptation to think it’s either 100% people giving away the darts or 100% illegal activity. It’s both of those things. One of those developments is very good, one of those developments is very challenging.
“I’m not convinced that cutting the excise on cigarettes would mean that would be the end of illegal activity.”
NSW Treasurer Daniel Mookhey has flagged he would be engaging with Dr Chalmers on the problems facing NSW.
“We can’t ignore the fact that there is an interaction between the Federal excise and the emergence of illegal tobacco. The first response needs to be through Health Ministers but I’m certainly of the point that I will make the argument to the Commonwealth, to Mr Chalmers and to others as well” Mr Mookhey said.
NSW PARLIAMENT ERUPTS OVER TOBACCO WARS
NSW Parliament has erupted, with Police Minister Yasmin Catley ripping into Opposition Leader Mark Speakman for questioning the role of police in the illicit tobacco war.
In the opening minutes of Question Time on Wednesday, Mr Speakman asked Ms Catley: “illegal tobacco sales are funding organised crime. Will you expand the remit of Taskforce Falcon to disrupt criminal gangs involved in illegal tobacco?”
Taskforce Falcon was established last month to oversee a number of investigations into gangland shootings and arson attacks.
In response - a furious Ms Catley said: “as if the NSW Police are not doing everything they can. The leader of the Opposition knows that it is Health that enforce illicit tobacco. He knows that. And he has come in here and has the audacity to come in here and say the police are not doing their job. Well shame on you. Shame on you. NSW Police are doing absolutely everything they can and I am disgusted that the leader of the opposition could come to the NSW Parliament and suggest otherwise” Ms Catley said.
During her address, Mr Speakman accused the Premier of “coaching his Minister”, while Nationals Leader Dugald Saunders called out that he thought the Police Minister was “lying.”
“Send him out - unparliamentary” Ms Catley demanded. “The truth kills mate. The truth kills” she said.
Mr Saunders would then withdraw the remark.
It comes after this masthead revealed there are 500 businesses registered to sell tobacco products in the Sydney electorates held by Anthony Albanese and Chris Minns, in another sign Australia has lost the war on the illegal black market.
The startling figure can be revealed as the Premier urges his federal counterparts to strongly consider reducing the cigarette excise, claiming the tax was “just not working”.
NSW Health Minister Ryan Park has also blamed the ballooning number of illicit tobacco traders on the former Coalition government, which failed to implement an effective regulatory system.
Spot checks by The Daily Telegraph on Tuesday discovered four tobacconists within 400m of the Prime Minister’s electorate office in Marrickville.
Two were openly selling cheap, illegal cigarettes and vapes. Meanwhile there are six tobacco stores and two other retailers selling cigarettes within 500m of the Premier’s Kogarah office, with six seen offering illicit products.
Responding to the unfolding crisis, Mr Park conceded it was too easy for people to sell cigarettes in NSW.
“Currently all a shop owner needs to do is give notice of their intent to sell tobacco through what is known as a retailer identification number,’’ Mr Park said.
“We are the last state to introduce a licensing regime because the former Liberal-National government failed to implement a tobacco licensing scheme.”
The free-for-all will close on July 1, when NSW Health requires businesses to “seek permission” for a tobacco licence, which can then be refused or revoked.
Coalition health spokesperson Kellie Sloane launched into the Minns government, saying: “We’ve been calling for reform for a year, yet the Premier stayed silent until tobacconists started taking over his own main street.”
Ms Sloane also said the Opposition had pushed to strengthen the incoming licensing laws by including a “fit and proper person test, including the requirement of a criminal record check”.
“Most other states have this important inclusion, but it was inexplicably knocked back by the Health Minister,” Ms Sloane said.
In response, Mr Park said there were “serious concerns about the burden the opposition amendments would place on small businesses and the impact it would have on the vetting process. As a result, it would have delayed the implementation of the (licensing) scheme.”
The number of businesses registered to sell tobacco products in NSW has grown from 15,000 to 20,000 over the past five years. In that time, tobacco excise revenue has fallen from a record $16bn in 2019-2020 to an expected $7bn in 2024-2025.
Mr Minns continued to pressure the Albanese government over the spiralling tobacco excise, citing budget figures which show the tax on cigarettes has increased from $16 to $28 a pack in that period.
“Where’s all that money going? Into the illegal tobacco sector. It’s just not working,” the Premier said.
on Tuesday night, a Federal Government spokesperson said: Labor is cracking down on illicit tobacco and we’re putting the people profiting from black market tobacco on notice. We are not going to raise the white flag to organised crime and big tobacco.’’
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Originally published as Chalmers rules out lowering excise to end tobacco wars
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