tobacco tax

Leyonhjelm Lauds Patriotic Tobacco Smugglers

Liberal Democrats senator David Leyonhjelm has taken the government to task for its irrational and damaging sin taxes on tobacco. This comes after the federal government passed draconian new penalties for tobacco smugglers that can include lengthy jail sentences of 10 years or more.

Pollies in both major parties support the exorbitant excise taxes. The idea is to reduce smoking, and undoubtedly they believe they are acting with good intentions.

But as T.S. Eliot famously noted, ‘most of the evil in this world is done by people with good intentions.

As The Australian Tribune has been reporting this week, sin taxes on tobacco are set to drive the cost of an average pack of smokes to near $40 next year. That’s $2,080 per year for just one pack per week. This comes after the government has already taken an average of 25­–35% of your paycheck in income taxes.

Illegal tobacco trade undermining government strategies?

It’s essentially a backdoor means towards tobacco prohibition, making cigarettes so expensive no one can afford them. But as the world saw with alcohol prohibition in the US in the 1920s, and the equally disastrous global drug war of the past 50 years, prohibition doesn’t work.

Instead it spawns lucrative black markets, creating thriving criminal enterprises and often ushering in violence. It also mandates the need for more police, heavier handed enforcement tactics, more courts judges and lawyers, and of course more jails and prison guards for offenders.

Never mind that it costs $110,000 to imprison someone for a year in Australia, according to the ABC. We must get dangerous offenders off the streets.

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In this case these dangerous offenders are anyone who buys, sells, grows, or transports tobacco products that have not been slapped with the government’s onerous sin taxes.

The government has already managed to create a new multi-billion black market. And no matter how much they toughen the penalties for tobacco smugglers, history shows their efforts will fail.

That reality is not lost on every senator.

Do the Liberal Democrats support tobacco smugglers?

David Leyonhjelm, for one, lavished praise on illegal tobacco smugglers. He called them ‘patriots’ and he rejected a crackdown on chop chop dealers.

According to the AAP, Leyonhjelm said people dealing the tobacco, known as chop chop, were simply avoiding unreasonable taxes.

He believes the government is only getting away with the new measures because of little public sympathy for smokers. He called the tobacco excise levels ‘highway robbery’.

Smokers are sneered at by the elites of society. The Liberal Democrats don’t sneer at smokers and we think tobacco smugglers are patriots,’ he told parliament.

As the AAP reported, the new penalties and other measures targeting the trade and use of illegal tobacco cleared parliament with bipartisan support on Thursday.

Governments are notoriously reluctant to admit when they’ve gotten something wrong. In this case, we expect them to continue with this wrongheaded ‘prohibition via taxation’ plan.

And in the process they’ll keep handing billions of dollars to the patriotic tobacco smugglers.

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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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