Criminals given “leg-up”

| August 9, 2017

An Australian Liberal-party backbencher fears his government may be giving a “leg-up” to organized criminals by continuing to bump-up tobacco taxes, according to a story by Roje Adaimy for the Australian Associated Press.

Craig Kelly told parliament on Tuesday the retail price of a pack of cigarettes was headed toward $40 in Australia, yet packs were being ‘sold wholesale in Asia for the equivalent of $1’.

He agrees the extra revenue from the latest tax increase will help repair the budget and that the high cost of smoking could deter people from smoking.

“But my concern that what will happen, is we’ll be basically creating prohibition by price,” Kelly was reported to have said.

“The risk is that we’re going to turbocharge the illicit and underground market, we’re going to turbocharge smuggling, we’re going to turbocharge black market cigarettes and we’ll be giving a leg up to organised crime.”

According to Kelly, about 14 percent of the cigarettes sold in Australia are illicit, and he wants law enforcement agencies to be given more resources to monitor the trade.

While Mr Kelly is happy to see fewer young people smoking and wants rates to drop to zero, he questioned whether higher prices were just diverting them to other drugs.

“There is a real risk because of the price sensitive nature of cigarettes that we may merely be trading one health hazard for another,” he said.

His comments came as the lower house passed a bill to increase the tax on roll-your-own cigarette tobacco, cigars, snuff, and other products to bring them in line with manufactured cigarettes.

The change, announced in the May budget, will be made over four years and is expected to rake in $360 million.

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Category: Breaking News, Illicit trade, Markets, Tax

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