The Australasian Association of Convenience Stores (AACS) has accused the federal government for reaching a new low after the Health Minister Tanya Plibersek has refused to rule out the possibility of introducing a 25 per cent tax increase on tobacco.
The AACS believes the introduction of the tax will be an attempt to disguise its grab for revenue as it ignores the real heart of smoking – health.
The excise increase has been floated as a possible inclusion in the Mid-Year Economic and Fiscal Outlook to be released in coming weeks.
AACS executive director Jeff Rogut said the move would be a predictable yet regrettable solution for a Government struggling to deliver a budget surplus.
“To call an increase in tobacco tax an unimaginative response by a Government struggling to deliver its promised surplus fails to account for the damage such a move inflicts on the small business community,” he said.
“Retailers, and small business owners in particular, have for too long borne the financial brunt of legislative changes supposedly promoting improved health outcomes but in reality masking a desire for increased revenue.
“This has created an environment where customers are increasingly driven towards the major supermarket chains, who have the buying power to offset tobacco price increases against other product categories, while small businesses lose further market share.
“Then there is the often overlooked side effect of enhancing the market for the illicit trade of tobacco. A further increase to tobacco excise will not only drive consumers away from small businesses into the arms of the major chains, it will support the already flourishing market for illegal tobacco distribution.”