Dumb tax policy is fuelling organised crime

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I feel nauseated every time I smell cigarette smoke. My mother was a heavy smoker, and the persistent odour of smoke is one of my most unpleasant childhood memories.

Mum stopped smoking 13 years ago, but the resulting emphysema has drastically reduced her quality of life.

Despite this, I was never in favour of taxing cigarettes as heavily as Australia does since I knew it would result in three significant negative repercussions.

  1. It would create a large black market for smokes. Tobacco smuggling will increase, providing a source of revenue for criminal organisations, jeopardising law and order.
  2. New health dangers will emerge as vaping’s popularity grows in place of cigarettes.
  3. It would lower government tax revenue as people turn to untaxed black market alternatives.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.