When Taxes Build Black Markets

My long-held warning has been proven true. Excessive tobacco tax hikes haven’t stopped smoking; they have simply fueled a violent black market, enriching organised crime and endangering local shopping centres.

Despite Minister Watt denying the obvious connection last December, criminals are the ones firebombing buildings and maiming people, proving this is a crisis of law and order, not just smoking.

Minister Plibersek’s claim that cutting the excise will cause more children to smoke ignores reality. Illicit shops don’t check IDs and wastewater testing shows smoking rates have surged 150% over seven years.

While the government blindly follows World Health Organisation demands, UN bureaucrats in Geneva and New York enjoy cheap cigarettes and easy access to vapes with far lower taxes and freedoms than what they force upon Australians.

Treasury data shows revenue plummeting from $16 billion to $3.5 billion as the black market wins. Following Canada’s past success, we must slash the tobacco excise by 75%, eliminate the criminals and tell the WHO to get stuffed.

Transcript

This week the Liberal Party promised an 80 per cent reduction in tobacco excise after One Nation promised 75 per cent. One Nation first called for a reduction in excise in June 2024, in a Senate debate where I said continuous tax increases would not stop people smoking and would instead fuel the black market, shifting revenue from the government to organised crime, endangering shopping centres and small businesses. And that’s exactly what happened. 

In estimates last December I asked Minister Watt to at least accept that high excise was driving law-abiding citizens into the hands of organised crime. He denied that was the case, a position that flies in the face of reality and truth. Cigarettes do not maim and murder innocent people. They do not firebomb buildings, nor do they destroy innocent businesses. Criminals do all of that, criminals the government are unable to control. This isn’t an argument about smoking. It’s an argument about crime. 

For Minister Plibersek to say that our policy to cut the excise will lead to more children smoking shows just how out of touch this government is. Children are already smoking because illicit tobacco cigarettes are already cheap. Do you think a criminal tobacco shop will ask a child for ID? Of course not. They’re criminals. 

The quit smoking lobby are, of course, opposing the measure. These are the people the government funds to hold the line, despite smoking and vaping rates reaching 17.4 per cent and rising—data from Roy Morgan. Recent wastewater testing from the University of Queensland shows smoking rates have increased 150 per cent over the last seven years. This is a combination of new smokers and increases from existing smokers. The only responsible, sensible course now is to reduce the excise, eliminate the criminals and get back to harm cessation. The latest budget has tobacco excise down from a peak—of revenue, that is—of $16 billion in 2019 to $3.5 billion this year, which is lower again over forward estimates. Even the Treasury thinks we’re going to lose the fight against organised crime. 

Years ago, Canada reduced their excise by 65 per cent to combat crime, and government revenue went up, not down. People did the right thing and moved back to the legal product, so will Australians. The World Health Organization first demanded these obscene taxes, and the quislings in government and the health bureaucrats jumped to their command. Meanwhile in Geneva, WHO bureaucrats, World Health Organization bureaucrats, can buy cigarettes with half the duty you have in Australia. Loose tobacco is a quarter of the same excise One Nation are proposing. UN bureaucrats in New York pay just $6.85 a pack in excise. That is less than Australians would pay after our 75 per cent excise cut. Vapes are available in both countries. Those UN hypocrites can access vapes as a smoking cessation, yet we cannot. 

I call on the government to cut the tobacco excise and tell the UN World Health Organization to get stuffed. (Time expired)