Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Leyonhjelm for that question. The government is indeed introducing a package of measures, including additional enforcement resources, to combat the illicit tobacco trade and protect the integrity of Australia's tobacco excise system. The package of measures will address this tax gap, promote the health of Australians by supporting the existing tobacco control policies and remove a key source of funding for organised crime. These measures will protect the sustainability and integrity of the tax base and will ensure that everyone pays their fair share, which will enable the government to keep taxes as low as possible, reducing the burden on the legitimate law-abiding economy.

The package is estimated to have a net gain to the budget of $3.6 billion over the current forward estimates periods, and a large proportion of the revenue impact is due to moving the taxing point for tobacco to the border to eliminate leakage from licensed warehouses. That is the integrity measure. Rather than collect the tax at a later stage, we'll collect the tax at the border. Changing the taxing point does result in tobacco duty being collected earlier than it otherwise would have been, bringing additional revenue into the current forward estimates period. This includes a one-off boost to revenue in the first year of the measure, as all stock held in warehouses as at 1 July 2019 becomes liable for duty and revenue is received from new tobacco imports due to the earlier taxing point.