Hanson’s tobacco tax cut backed as black market thrives
Sarah Spina-Matthews and Noah Secomb |
Criminals could seize Australia’s entire tobacco market within a year without drastic and urgent government action, an expert warns.
Rohan Pike, who founded the Australian Border Force’s tobacco strike team, welcomed One Nation’s pledge to cut tobacco excise by 75 per cent, returning it to a similar rate in 2015.
The excise, which adds about $1.50 to the price of every cigarette, was driving the illicit tobacco problem, the former Australian Federal Police officer said.
Mr Pike now consults with organisations about illicit trade and has called for a substantial excise cut to get enforcement under control.
“We have to do it quickly and we have to go big,” Mr Pike told AAP.
“We’ve got over 80 per cent of the market in the hands of criminals. It could be 100 within the year.”
The excise cut should be done in tandem with other measures, including the regulation of safer nicotine products such as vapes and pouches, Mr Pike said.
“It allows (other smoking regulations) to work, as opposed to now where criminals don’t care who they sell it to or what they sell.”
One Nation’s announcement put the government under more pressure to lower the excise, with Nationals leader Matt Canavan also backing the move.
It marked a change on One Nation leader Pauline Hanson’s earlier proposal from June, to slash the excise by 50 per cent.
“We have said for some time the excise rate needs to be cut to kill organised crime and kill the black market,” Mr Canavan told News24.
“What we need is the government to act right now, but we’ll be taking a policy to the next election that is, as I said, considered, it’ll be costed and it’ll be consistent.”
Liberal senator Jonno Duniam called for One Nation to outline how much its proposed tax cut would cost.
“You can’t deal with (the illegal tobacco trade) by just reducing excise. There has to be enforcement … but by the same token, you can’t deal with it just by increasing enforcement efforts,” he told News24.
An estimated 80 per cent of all tobacco consumed in 2025 was illicit, up from 12 per cent in 2017, according to the Australian Bureau of Statistics.
Victoria Police reported more than 200 arson attacks related to Melbourne’s tobacco wars in the past three years.
The firebombing of tobacconists in the state has emerged as a key issue for the upcoming Victorian election, where One Nation hopes to gain multiple seats.
Federal Labor has held off changing the tobacco tax despite calls from NSW Premier Chris Minns to intervene in July.
Senator Hanson has accused Labor of underwriting organised crime by raising the tobacco excise and forcing the trade underground, where illicit cigarettes are estimated to be worth billions of dollars.
One Nation MP Barnaby Joyce said constantly putting up the price of cigarettes and expecting more tax revenue was “absurd economics”.
“You’re going to get more mafia … and that’s precisely what’s happening,” Mr Joyce told the ABC.
“And the only way we can deal with the criminality … is to bring back the price of legal cigarettes into the same realm as where the illegal ones are.”
Treasurer Jim Chalmers dismissed calls to take an economic approach to the flourishing black market.
“The government’s focus is on the law and order aspects of this substantial problem,” Dr Chalmers told the ABC.
Recent successful raids of illegal supply proved the worth of increased funding for policing, he said.
AAP