Pat Conaghan (Cowper, National Party, Shadow Assistant Minister for Social Services) Share this | Link to this | Hansard source

The Excise Tariff Amendment (Tobacco) Bill 2024 and the Customs Tariff Amendment (Tobacco) Bill 2024 increase the excise duty for all tobacco goods and the customs duty for all tobacco products by five per cent per year for three years, starting from 1 September 2023. The five per cent increase is in addition to the current biannual indexation based on the average weekly ordinary time earnings. The amendments to the excise tariff incorporate the excise tariff proposal that applied an additional five per cent increase per year, from 1 September 2023 until 1 September 2025, to tobacco excise duty rates and aligned the per-stick and per-kilogram excise duty rates by progressively reducing the weight conversion factor by 0.000025 per year on 1 September 2023, 1 September 2024, 1 September 2025 and 1 September 2026, taking the rate from 0.0007 to 0.0006.

The amendment to the Customs Tariff Act incorporates the customs tariffs proposal that applied to an additional five per cent increase per year on and from 1 September 2023 until 1 September 2025 to tobacco custom duty rates and aligned the per-stick and per-kilogram customs duty rates by progressively reducing the weight conversion factor each year.

Increasing duties on tobacco also increases the end-cost of tobacco products. While these price increases typically reduce overall rates of smoking, they can also push customers to seek out black- or grey-market substitutes at a lower price. These increasingly punish small businesses who do the right thing and don't sell those illegal products. It is essential that this be countered through greater enforcement, and these issues prompted the creation of the Illicit Tobacco Taskforce under the previous coalition government of 2018.

Debate adjourned.