I rise to speak on the Excise Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017 and Customs Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017. The government says in the common explanatory memorandum to these two bills that it seeks to harmonise the rates of tax on different tobacco products. The excise bill deals with tobacco products produced in Australia, and the Customs bill deals with products imported into Australia. In effect, these bills deal with 85 per cent of the market—that is, the regulated and legal market. These bills do not deal with the remaining 15 per cent of the market, which KPMG describes as an industry dominated by serious and well-organised crime, which sees the illegal tobacco market as a low-risk, high-profit business.
The Australian Customs and Border Protection Service estimates the duty on tobacco that would have been evaded, but for seizures, to be just over $1 billion in 2015-16. No-one knows how much tobacco, mostly in the form of cigarettes, evaded detection and found its way to the black market. Although it has been illegal to grow tobacco in Australia since 2006, tobacco continues to be grown illegally and sold as chop-chop, and much of this is bought by smokers who roll their own cigarettes. It is a statement of the obvious, but the government receives nothing from the sale of tobacco products in the black market. The central problem is that, as the government increases taxes on legal tobacco, it forces smokers into the black market and this in turn increases the size of the black market.
It is estimated that around 13 per cent of Australians over the age of 18 smoke, but the figures vary throughout Australia. In the ACT 10 per cent of people smoke but it is double in Queensland and Tasmania. As I referred to the black market, I find it quite appalling that the government knows that this is going on. The black market is bringing in quite a lot of cigarettes that are sold on the black market. The fact is that we are not doing enough at Customs and point of entry into this country to inspect the containers to ensure that we don’t have illegal cigarettes coming in to this country.
Smokers in Australia need relief from excessive taxation and they need choices like electronic cigarettes. Electronic cigarettes are handheld devices that are said to recreate the feeling of tobacco smoking. It is currently unlawful to sell or to use electronic cigarettes with a nicotine cartridge. This is because nicotine is classified as a schedule 7 dangerous poison under the Commonwealth Poisons Standard. So, while you can buy cigarettes, you cannot buy nicotine electronic cigarettes. It is a question Australians who smoke ask every day, and there is no sensible answer because the government is spending its time raising another $150 million when it already gouges $11.6 billion a year from smokers. Let me repeat that: $11.6 billion a year from those taxpayers who smoke. And these people are taxpayers because they pay taxes on the cigarettes and tobacco.
Why would the government want to ban cigarettes when they are making so much money? I find they are a bunch of hypocrites, Liberal, Labor and the National Party, because the whole thing is that this about a money grab. It’s about $11.6 billion a year that they are taking from these people who are addicted to cigarette smoking, who are forced to pay this extra money. I’d like to know whether this money goes into consolidated revenue. Are we really trying to do something to help these people that are addicted to smoking? Is the money going into reducing the cost of nicotine patches, or are we putting the money into checking out the black market? The government are forcing people back to the black market to buy cigarettes there—and who knows where that money goes. So I do not see this government helping whatsoever.
I spoke about electronic cigarettes. We are talking about nicotine. What are cigarettes? Cigarettes are nicotine. So why are we opposing electronic cigarettes when it is known that they can assist people to cut down on their smoking and hopefully get off cigarettes? That’s what we are here for. We’re here to make the right decisions for the people out there struggling. Most of these people who are addicted to cigarettes and smoking are the ones who can least afford it. They are so addicted, so they spend their money on a packet of cigarettes, which gives them relief, usually from depression. They may not have work or are trying to live on a minimum wage or a very low hand-out in social security and the last thing they can afford are cigarettes but they are addicted to it. We have to start looking at doing something to help these people get off the nicotine.
There is another thing that I will raise. Why don’t we look at the chemicals that the cigarette companies put into the tobacco for the cigarettes? Why don’t we look at that? If nicotine or all these other poisons that they put into tobacco so that the cigarette burns longer or faster—or for whatever reason—are factors, why aren’t we looking at controlling what the companies put into the cigarettes so that we can help these smokers get off it?
I am not for smoking, but I believe in a fair society and in trying to help these people, instead of gouging them again with higher taxes, which they can least afford. Start showing me policies and legislation that are going to help these people. I see this as a money-making racket from the government—just another way of collecting more taxes. It is unfortunate that the government is not putting forward a bill today that simplifies the regulation of nicotine and electronic cigarettes in Australia and does what is necessary to make safe the capsules that contain the substance in electronic cigarettes.
I will speak further about non-nicotine electronic cigarettes. In South Australia and Western Australia, it is unlawful to sell products that resemble tobacco. In Queensland, New South Wales and the ACT, laws ban the sale of electronic cigarettes to people under the age of 18. The legality of advertising and promoting non-nicotine electronic cigarettes varies throughout Australia. The same situation arises for the use of non-nicotine electronic cigarettes in smoke-free areas. Instead of working out ways to tax smokers more and limit their choices, I want the government to show leadership by harmonising the laws on electronic cigarettes and doing more to reduce the illicit tobacco industry in Australia.
For those people out there who are non-smokers, I have to be honest—I was a smoker, a very passive smoker, but I gave it up in 1995. I don’t smoke now, and previously I was just a social smoker. So I see both sides of the coin. I don’t encourage my children to smoke at all, but they are adults and they do their own thing. I am not just looking at the health aspect of this but I’m also looking at it from the perspective of what is right. To help people in Australia who are truly addicted to cigarettes, we must do more than tax them to the hilt, thinking that that is the way to get them off cigarettes. It is more of an educational process. It means doing more to help these people. That’s what I’ll be looking at, and I hope the government will look at it, rather than just raising the taxes again, more and more every year. I can’t see people being helped by that at all.
Chamber Senate on 10/08/2017 ItemBILLS – Excise Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017, Customs Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017 – Second Reading Speaker: Hanson, Sen Pauline Parliment of Australia Transcript used for news reporting