Health Minister Mark Butler has conceded the tobacco black market has “exploded” into the biggest threat to public health in Australia.
Mr Butler admitted on Adelaide local radio that organised crime had recently taken a “stranglehold” over the illicit tobacco market.
“It started in Melbourne and it spread right through the country. It means that there is violence and arson taking place as rival gangs try to take control of what is a very high-revenue market for them,” the minister told FiveAA.
“It bankrolls all of their other criminal activity: their sex trafficking, their drug trafficking, all of the crimes that have very serious victims involved.
“From a health minister’s perspective, it is now the biggest threat to our most important public health program.”
How fight with big tobacco fuelled black market
The government announced an additional $156.7 million to fight the “relentless” illegal tobacco trade in March, after witnessing a massive turn away from legal purchasing to the black market.
The price of cigarettes has been pushed up dramatically over the past decade, as the federal government has repeatedly raised tobacco taxes to discourage smoking.
The duty on a packet of 20 cigarettes has risen from $10.62 in 2015 to $28.06 today — but the most recent federal budgets have revealed a collapse in revenue from the excise, suggesting a significant shift by smokers to buying from the black market.
Earlier this week, the Australian Medical Association warned the availability of illegal tobacco in the past 12 to 18 months appeared to be leading to a rise in smoking rates — a reversal in their long-term downward trajectory.
Premier’s call to cut cigarette tax
But state premiers have suggested their complaints to federal government have previously fallen on deaf ears.
NSW Premier Chris Minns complained earlier this month that it was “ridiculous” to suggest the ongoing tax hikes were not feeding the illicit tobacco market and organised crime.
“Smoking rates have increased … this would be the only tax in the world where it’s doubled but the rate of revenue collection has halved. Something is obviously happening here,” Mr Minns said on Sky News.
“I just think we need a commonsense discussion.”
Asked whether he had been met with a “brick wall” when raising the issue with Mr Butler and the treasurer and prime minister, Mr Minns responded that he had tried to call out the issue publicly, but the government “doesn’t look like they are for turning”.
But making cigarettes cheaper would be a controversial move for government and a step back from an approach by Labor governments that has seen success for more than a decade.
Mr Butler said the advice he had received was that the “real challenge” was enforcement.
Shadow assistant treasurer Pat Conaghan said yesterday that the government’s smoking policies were failing.
“This isn’t a partisan issue, it’s just common sense. Even state Labor governments are warning Canberra to change course,” Mr Conaghan said in a statement.
“How much longer will the government refuse to admit they got this wrong? How many more billion-dollar budget shortfalls and violent gang incidents will it take before ministers admit that hiking excise in the middle of a black market boom is only making things worse?”