It is not a hard concept to grasp: impose outrageous taxes on an addictive substance and users will turn to black-market suppliers, which is precisely what smokers are doing in increasing numbers across Australia. I know this for a fact because, despite misgivings about supporting organised crime, I am one of them
First, know that my real name is not ‘Peter Jackson’ and that I have no option but to use a pseudonym. You see, not only do I persist in smoking tobacco, which makes me a pariah in civilised society, but the same people who force me to stand in the rain to get my half-time fix outside Etihad Stadium also made me the criminal I am today. Indeed, it is far worse than that. Not only do I break the law on a daily basis, I also enrich the lords of organised crime, stiff my fellow taxpayers and divert law-enforcement agencies and resources from more worthwhile investigations.
My crime? I have not purchased a legal, taxed-and-franked packet of cigarettes for more than six months. Governments may not understand how markets work, just as they no longer remember to mind their own business, but crime syndicates certainly do, and they have been more than happy to satisfy my demand for low-cost nicotine.
I live in a part of Melbourne I will call “Batmanville” because I don’t want to bring down official attention on the shopkeepers, my fellow criminals, who are saving me so much money. It is a quiet, safe suburb where the greatest threats to public order are the amorous possums whose tin-roof dalliances often disturb the midnight peace. But there are criminals here a’plenty and our numbers are growing, make no mistake about that.
The crime wave began back when Labor was making the pretense of government, Wayne Swan was treasurer and his hopeless promise to balance the budget prompted precipitous and successive increases in the price of smokes. Legal cigarettes have not been cheap for decades, but these further price hikes were outrageous. Today, were I revert to my formerly favoured brand, Camel filters, I could expect to fork out more than $20 per pack. That is about $1 per smoke, and as I am a two-pack-a-day man, that works out to $280 per week. That is $1000-plus every month and, taken over the course of a full year, a staggering $13,000.
Back in February, in the interests of saving money, I switched brands. As prices rose, new and much cheaper brands began to hit the shops. JPS (short for Just Plain Smokes) were rough on the throat and hot to the tongue, but at $12 a pack they were affordable. Soon, I was trying the Bond Street brand, then the re-launched Rothmans and several other varieties of cheapies after that. I might have stuck with those except that Canberra’s revenue-grabbers kept upping the prices.
“What’s cheap?” I asked the affable Mr Wong, who runs my local milk bar, after yet another hike.
“These very cheap,” he replied, reaching under the counter to produce a packet of Marlboro Reds. A glance at the packaging confirmed they were contraband. Legal smokes now come only in their ‘Roxon wrappers’ which add to the injury of stratospheric taxation the visual insult of those graphic images the nannies impose on people of whose habits they don’t approve. Personally, I don’t know why they went with those pictures of diseased eyeballs, green teeth and corroded lungs. A single, simple photograph of Ms Roxon wearing her sucked-lemon look of I-know-best disapproval would have been a much more effective form of aversion therapy.
An experimental puff revealed that the Marlboros, which I guessed had been made somewhere in Asia, tasted as they should. Mr Wong earned my immediate gratitude — and an untaxed windfall profit as well because I immediately bought a 10-pack carton for $90. No excise for you, Mr Hockey!
Since then, Mr Wong has gained plenty of company. Another shop, no more than 200 metres from his emporium, is selling filtered chop-chop cigarettes at $28 for 100. At the petrol station where I fill up my car, the nightshift counter attendants sell casual customers taxed and legal cigarettes from behind the Screen Of Death, the see-no-evil visual shields that Roxon made all retailers install. But if the servo guys know and trust you, the goods come from under the counter and Canberra misses out again.
When I was a lad and getting an education, the generally accepted rule was that some products were largely immune to the push and pull of supply and demand. Increase taxes on cars and people will delay buying new ones. But tobacco, we were told, was different. Higher prices will dissuade a few addicts, a very few, but demand will remain largely unchanged. There were graphs and charts to illustrate the lecturer’s point, but they weren’t really needed, as even first-year innocents are generally smart enough to appreciate the power of addiction.
Canberra’s addiction to taxation, however, is another matter. If the poobahs of public health had been ignored and calls for the extra taxes they demanded had been ignored or moderated, I would still be smoking legal product and Joe Hockey’s deficit problem might not be so acute.
“In Asia, a pack of cigarettes costs as little as $1, but in Australia the same pack can cost more than $20. With the price of being a pack-a-day smoker now exceeding $100 a week, people are turning to illegally imported tobacco.
In 2012-13, Customs seized 343 tonnes of tobacco destined for the black market. If the products had hit the street, the Government estimates it would have lost more than $150 million in revenue — a record high.
The seizures were made up of 200 million cigarettes and 183 tonnes of rolling tobacco. The cigarettes could meet the needs of 21,900 pack-a-day smokers for a year.
A 2011 report by Deloitte, paid for by British American Tobacco, said smuggling cost taxpayers more than $1 billion a year in lost revenue. It also said one in every eight cigarettes lit in Australia was smuggled.”
It is worse than that. Much worse. Back when cigarettes were relatively cheap, the way to get rich quick was to put in a crop of marijuana. Now it is tobacco that is being grown illegally, such are the potential profits.
Look, I’m not a bad person. I wear my seatbelt when driving, just like the government tells me, and I no longer ride a bicycle because of those $200 fines the police hand out to riders lacking helmets, which are a bloody nuisance when you get to wherever you are going. I can even sit through those late-night TV ads urging me to pledge that I will never hit a woman because I know that in some or other obscure government department there is a coterie of publicly funded feminists who might not be able to provide for their beta-male hubbies if obliged to find honest, productive work.
And, yes, I fully comprehend that shootings and gang warfare are likely to erupt as organised crime groups fight for control of the booming underground tobacco market.
But don’t blame me for that. Blame Canberra’s revenuers instead. When Customs inspectors get paid to look the other way, when the illegal distribution network gets even larger and public respect for the law is gone, it will be the politicians and health scolds who belong in the dock.
My addiction to nicotine is a relatively minor vice, one I intend to keep on satisfying at the lowest possible cost. Hockey & Co should take note of that and repeal their latest and slated price increases. They won’t, of course, because the only addiction harder to shake than cigarettes is the politicians’ compulsion to relieve little people of their money.
As far as I’m concerned, they can lick my untaxed ashtray.