Nationals’ plan to raise billions from vapes is all smoke and mirrors

A scene from an Australian Government anti-vaping advertisment.

It’s hard to imagine a political party more conflicted or more compromised on vaping than the Nationals, which is why parents and school communities across the country are rightly alarmed at the possibility that Peter Dutton will roll over and let the Nationals dictate Liberal Party policy on the recreational vaping crisis affecting our kids.

The Nationals are the only political party to still accept donations from tobacco companies. Indeed, the Albanese government’s world-leading crackdown on recreational vaping appears to have driven these foreign-owned companies even further into their warm embrace: British American Tobacco donated $55,000 and Philip Morris donated $75,000 to the Nationals last year.

Australian parents and politicians alike should be highly sceptical of anything tobacco money touches. No other industry has such a toxic and tarnished record of putting profits before people.

So when the tobacco-sponsored Nationals Party holds up tobacco-sponsored research promising a tax on vaping could raise billions, we should see it for what it is: just another cynical and dangerous tactic to maintain Big Tobacco profits, at the expense of the health and happiness of our young people.

The Nationals and Liberals would be foolish to bank those imaginary billions, since overseas experience tells us raising revenue from vaping is not as easy as it sounds.

For evidence, we need only look to America to see that taxing vapes is not simple and may not reduce vaping or raise the revenue expected.

In December 2019, the state of New York began to implement a “tax and regulate” scheme for vapes.

The state government took vapes out of pharmacies, put a 20 per cent sales tax on all vaping products sold in retail settings, and implemented age restrictions to prevent anyone under the age of 21 from buying a vape.

With 20 million people living in New York, and close to one million adults vaping, you might think a vaping tax would be rivers of gold for state Treasury coffers. But New York could raise only $35.9m in the first year of its vaping tax. And revenue has fallen by more than 10 per cent on average every year since. It raised just $25m last fiscal year.

And since the “tax and regulate” laws were implemented another 250,000 New Yorkers have picked up the habit. So tax revenue is falling even as more people vape.

Most alarmingly, the age restrictions seem to have done little. Young New Yorkers continue to vape, in shockingly high numbers: one in five high school students is vaping, and those additional vapers are lining the pockets of tobacco company executives and shareholders.

In 2021 – the same year New York managed to raise little more than $30m from taxing vaping products – just one company, British American Tobacco, sold more than $2.7bn worth of vaping products around the world. That same company took some of that money and donated it to the Nationals.

The Nationals’ policy is sponsored by Big Tobacco and if New York teaches us anything, it is likely to fail.

The billions Big Tobacco lobbyists say can be raised might be nothing more than vapour – just smoke and mirrors to hide the fact they hope to lure another generation into nicotine dependence, so they can make record profits at the expense of our kids.

If vaping turns out to be anything like smoking, the costs will far outweigh any revenue. The economic cost of tobacco’s health and social harms could be as high as $136bn a year, and tobacco still kills 50 Australians each and every day.

If the Liberals plan to build their budget on the Nationals’ dodgy tobacco figures and kids getting addicted to nicotine, they should be honest with us.

All senators have a once-in-a-generation opportunity and responsibility to pass the Albanese government’s world-leading legislation that will return vaping to its original purpose: helping hardened smokers to quit, with therapeutic vapes available in pharmacies, instead of vape shops across the road from schools.

The best time to have done this was five years ago. The second-best time is now.

Mark Butler is the Minister for Health and Aged Care.