Retailers have renewed calls for the Federal Government to overhaul its tobacco excise policy, warning that rising taxes are fuelling the illicit tobacco market and endangering business owners and staff.
David Inall, Chief Executive Officer of MGA Independent Businesses Australia, said shop owners are facing increasing financial and security risks due to the growing illegal tobacco trade.
“Our members not only face significant financial losses year after year, but many also live in fear as their businesses are targeted by violent cowards who rob their stores and assault staff—often to steal legal tobacco for resale in the illegal market.”
The industry group, which represents independent grocery and liquor outlets nationwide, is urging the government to implement a nationally coordinated tobacco strategy. The first step, according to MGA, should be an excise freeze followed by a tax reduction.
Reports from Nine’s 60 Minutes and the ABC’s Four Corners have highlighted concerns over the impact of tax hikes on the illicit tobacco market. Inall criticised the government’s approach, arguing that it has backfired.
“While the Government aims to reduce smoking rates by making legal tobacco less affordable, all that they have achieved is shifting more legal tobacco consumers over to illegal products.”
The MGA also pointed to reports that the Federal Treasurer proceeded with the most recent excise increase despite Treasury advice warning it could lead to greater substitution with illicit products.
“There is obviously no clear strategy here: border control, reviewing the impact of excise increases, licensing, enforcement, and penalties. As was clearly demonstrated through both 60 Minutes and Four Corners, this is a mess,” Inall said.
The group is calling for immediate government intervention to prevent further harm to legal businesses and employees.
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