Tobacco tax rise could drive people to black market
A $6.50 RISE in the tobacco tax being considered by the Rudd Government could drive smokers to the blackmarket and deprive the 
Government of tax revenue, convenience stores warned.
The Australian Association of Convenience Stores said the market for illegal cigarettes had already doubled to 12 per cent of cigarettes sold, bleeding the Government of $600 million a year in tax revenue.
That would only increase if the tobacco tax rose to help pay for the Rudd Government’s $14 billion health reforms, the association said.
Association director Sheryle Moon said the $6.50 rise would lift the price of a pack of 30 cigarettes to $20, making blackmarket cigarettes even more attractive.
“A pack of counterfeit cigarettes can be bought for $7 or less,” she said. “When cigarettes become more expensive consumers simply look for cheaper alternatives.”
A PricewaterhouseCoopers report put illegal sales at 12 per cent of the market with a huge growth in branded counterfeit cigarettes coming into Australia from Asia.
Ms Moon said these counterfeit cigarettes carried none of the mandatory health warnings required on Australian cigarettes.
While she said tax and price rises were an effective means of getting many people to quit their tobacco habit “there comes a point where you get dysfunctional returns”.
“Because if you’ve gone too far there are incentives for people to go to an area that is unregulated.”
The Government’s preventative health taskforce chasing the tax rise wants it phased in over three years to allow smokers time to quit.
Ms Moon said a phased increase would be easier to bear than a one-off rise of $6.50 per pack.
But Ms Moon said she would prefer the Government to focus on other ways of encouraging people to quit, such as public health advertising tailored to have an impact on teenage smokers.
The Cancer Council of Australia said tobacco price hikes were the single most effective way of getting people to quit the habit.
Research shows that for every 10 per cent rise in price, 3 per cent of smokers would quit.
The Daily Telegraph, April 16, 2010
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The end result is the Government does not want people to quit. Logic tells us if everyone was to quit there would be no additional tax collected. So get real and tax everyone a small amount rather than a select few paying a lot. If the government was really concerned about peoples health they would make it cheaper and easier for people to quit. This fact alone tells us all they don’t want anyone to quit. The addiotnal fact that smokers pay more tax and have less rights and no freedom to smoke where they want. Every state has different laws around smoking making it almost impossible for travellers to do the right thing. Dictatorship is evil in any part of the world.
Why not drive up the cost of food aswell? Obesity is killing more people now than cigarettes, yet smoking is more frowned upon. It’s about time to actually take a step back and put it into perspective and start calling it for what it is; easy money.