Media Release: Rudd Must Resist Calls To Gouge Smokers

The following release was issued prior to the announcement that the Rudd Government shall, in fact, be increasing the tobacco tax by a whopping 50%.

Media Release
Rudd Must Resist Calls To Gouge Smokers

The Australian Taxpayers’ Alliance & MyChoice Australia today urged the Federal Government to resist pressure to hike tobacco taxes to plug the Federal Budget Black Hole.

“Smokers can’t be made the scapegoat for the Federal Government’s budget failure” ” said Tim Andrews, Executive Director of the Australian Taxpayers’ Alliance. “Hiking the tobacco tax would be an immoral and highly regressive tax-grab that will hit already struggling poorest Australians hardest.

“Australia’s exorbitantly high tobacco taxes already ensure smokers more than pay their way. This is simply cynical politics aimed at exploiting an unpopular group in the community.

“To make matters worse, this won’t even raise additional revenue – and might even reduce it! This is the mining tax fiasco all over again. The evidence is overwhelming that hiking the tobacco tax will simply increase highly dangerous tobacco counterfeiting and smuggling by criminal syndicates.

In 2010, the Federal Government slugged smokers with a 25% tax hike arguing it would deliver an additional $5 billion. In fact, in FY2011-12 total excise collected fell and the Federal Government admitted there was not a shred of evidence any additional revenue was raised. According to Deloitte, the 2010 25% tax hike on tobacco caused the illicit trade in tobacco products to jump 29%, resulting in $1.1 billion in foregone tobacco excise tax revenue.

 “The Australian Crime Commission released a report yesterday stating that “Australia’s illegal tobacco market is perceived by organised crime groups as a low risk, high profit activity” Given the boon times in the smuggling industry caused by plain packaging, this will be a real victory for criminals.

“This proposal is immoral, will hurt families, and won’t raise an additional cent in revenue.

“If the Federal Government wants to tax “reckless behaviour”, maybe they should tax themselves first.

Media Contact
Tim Andrews
Executive Director
Australian Taxpayers’ Alliance
(m) 0434 064 934

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