illegal tobacco

Australia’s Tobacco Sin Taxes Funding Human Trafficking

The Australian government would have you believe smokers are the problem. Specifically, smokers who are unwilling or unable to fork over $40 for a packet of cigarettes.

While some brands are still available for less, the government’s exorbitant and rising sin tax on tobacco will drive the cost of an average pack of cigarettes to near $40 next year.

That means smoking just one pack a week would set you back $2,080 per year. Bump that up to an unhealthy pack a day, and you’re looking at $14,600 per year to fund your addiction.

Is it any wonder then that more and more Aussie smokers are turning to the black market for their smokes?

Of course not.

Illegal tobacco crackdown

In yet another sign that governments are unable to learn from or admit their mistakes, Canberra is ready to double down on a policy that’s already fuelling a billion dollar black market.

Yet don’t expect to hear your pollies taking the blame.

Instead, a proposed government crackdown on illegal tobacco will go to the Senate after making it through the lower house.

Predictably, Labor MP Shayne Neumann told parliament on Tuesday that Australians buying illicit tobacco were funding criminal operations such as human trafficking, illegal firearm use and drug smuggling.

He made no mention that this issue did not exist before the government placed onerous taxes on tobacco, making Australian cigarettes amongst the priciest in the world.

It would seem, then, that it’s the government’s well-intended but reckless taxation policy that is driving these criminal operations. Not smokers struggling with flat wages and rising energy costs choosing to buy cheap black market tobacco.

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As reported by the AAP, under the government’s proposed changes, the origin of illicit tobacco no longer needs to be proven. There will also be a criminal offence ‘based on “recklessness” of avoiding tax, rather than intent’.

The bill was introduced by Liberal MP Angus Taylor.

Taylor noted that the Australian Border Force seized 240 million cigarettes and 217 tonnes of illicit tobacco at the border last financial year. That works out to more than $356 million in evaded duty. You can see how that’s a thorn in the side of our cash strapped, big spending government.

Criminals who profit from the trade of illicit tobacco undermine the government’s strategies to promote good public health outcomes… They threaten the viability of law-abiding local business operators,’ Taylor said on Tuesday, according to the AAP.

The Australian Tribune is all for promoting good public health.

But clearly the government’s plan to tax cigarettes to the extent that many workers can no longer afford to buy them legally is already spectacularly backfiring. So much so that we’re told the illicit trade they’ve created is funding people smuggling.

Rather than create more laws that will see people going to jail over untaxed tobacco, the government should admit it stuffed this one up and go back to the drawing board.

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Bernd Struben

Bernd Struben

Bernd Struben is the lead editor at The Australian Tribune. Bernd makes use of his extensive network to bring you the top stories you need to know about each day. Stories the mainstream may miss. Or bury somewhere you’re unlikely to ever read them. Bernd studied aerospace engineering and journalism at the University of Michigan, before graduating with a degree in economics. Over the past two decades he’s worked in media, management, and finance in the US, the Caribbean, Europe, and Australia. His other role, as the editor of the Port Phillip Insider, puts him in a unique position to read Australia’s most exclusive financial advice. Some of which he shares with readers of The Australian Tribune for free.
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