The Federal Government has shelved its innovative aspirations as the Budget followed the lazy yet predictable path in raising tobacco excise – not even pretending to be motivated by health – in a move that punishes honest retailers, supports criminal gangs and hurts low income earners.
The tobacco excise increases that were insultingly glossed over in the Budget presentation will impact many businesses, particularly the small businesses that the Government claims it is trying to support.
Legal tobacco represent approximately 37% of a typical convenience store’s sales and for each tobacco product sold, the Government already collects a handsome sum.
However with endless excise increases the Government is shooting itself in the foot, as the criminals behind the smuggling and sale of illicit tobacco in Australia benefit every time the cost of legal tobacco rises.
This has made Australia one of the world’s most lucrative markets for illicit tobacco. Of course, the Government collects no excise on the sale of illegal tobacco, missing out on $1.35 billion in lost tax revenue last year alone.
This short-sighted, lazy and discriminatory move ensures the Government will continue to lose excise revenue to criminals. It’s the opposite of innovation.
Tobacco excise increases target low income earners especially, as adult consumers who choose to buy a legal product are singled out to pay even more.
Australian smokers are already taxed more than almost anyone else in the world. Now we have a Budget that seeks to target this group further: it is pure discrimination.
The pretext that this has anything to do with improving health outcomes doesn’t even appear worth repeating. The tobacco tax rip-off has never been about health and the Government no longer even bothers to convince us that it is.
The Australasian Association of Convenience Stores – AACS – is not an arm of, nor does it lobby on behalf of, the tobacco industry. It is the peak body for the convenience industry in Australia, representing the interests of over 6,000 stores.
Jeff Rogut, Chief Executive Officer, Australasian Association of Convenience Stores
