Australian Anti-Smoking Efforts Back-Fire

The Taxpayers’ Union is urging the Government not to make the same mistakes Australia has in relation to anti-smoking efforts which have caused a spike in illicit tobacco sales and left a revenue hole of $1.3 billion in Australia’s government accounts.

At the end of March KPMG published a report showing that high excise taxes and plain packaging have led to continued growth in the consumption of illicit tobacco, which now accounts for 14.5% of total Australian tobacco consumption.

Taxpayers’ Union Executive Director, Jordan Williams, says:

“This report on Australia’s experience should serve as a wake-up call to the New Zealand Government currently reviewing tobacco control measures. It is very clear that simply ramping up tobacco taxes and bans on branding won’t work. Worse, these measures appear to have simply played into the hands of criminal gangs, which in Australia are now the fourth largest provider, supplying 14.5% of the market.”

“Of particular concern is evidence that consumption of tobacco products has increased since the introduction of plain packaging in December 2012, from 17.3 to 17.5 million kilograms per year. It appears that those who warned that plain packs would simply lead to competition on price, and an invitation to those importing illegal product, may have been right."

“We all support measures which reduce harm, but raising tobacco taxes isn’t the answer when the benefit is questionable and it is clear that those who benefit are the criminals supplying illicit tobacco. We call on politicians to honestly assess the actual effectiveness of these measures rather than continue to use tax on smokers as a virtue-signalling political tool."

ENDS

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