Cutting cigarette tax will not create more smokers, Angus Taylor says
The opposition leader says slashing the tax on a pack of cigarettes by more than $20 will not lead to more smokers, as the cost of illegal cigarettes is already at that price.
Opposition Leader Angus Taylor has stated that reducing the tax on cigarettes by 80% will not result in more people taking up smoking, as illicit cigarettes are already being sold at that price. The Coalition has not modeled the impact of the proposed tax cut on smoking rates, but Shadow Home Affairs Minister Jonno Duniam has mentioned that similar tax reductions in Canada in the 1990s led to an increase in smoking rates among young people.
However, over time, smoking rates in Canada ultimately fell, even as the illicit tobacco trade flourished. Duniam believes that the only way to address this issue is to tackle the illicit market, which currently accounts for about half of all tobacco sales in Australia and generates significant proceeds for crime groups. The Parliamentary Budget Office, commissioned by Duniam's party, found that an 80% reduction in the tobacco excise could change consumer behavior, but this would need to be combined with law enforcement and education efforts.
Taylor has emphasized that legal cigarettes need to be brought to parity with illegal tobacco in order to effectively combat the illicit market, which currently fuels violence and loses revenue for the federal government.
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