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Perth Now
6 days ago
- Perth Now
Footy fans help consumer spending roar into growth
Footy fever has helped score a try for consumer spending, with a series of big matches prompting Australians to open their wallets, the nation's biggest bank says. The British and Irish Lions rugby union tour and the State of Origin rugby league decider helped push household spending up 0.8 per cent in July, according to the Commonwealth Bank. "Fans spent up on travel, entertainment and accommodation," economist Belinda Allen said. About 83,000 fans bought tickets for the State of Origin decider, which was won by Queensland, in Sydney on July 9. The British and Irish Lions tour included nine matches in six cities attended by about 452,000 people, with all but two played in July. Recreation spending was up 1.8 per cent and hospitality spending increased 1.5 per cent. Overall, 10 out of the 12 CommBank Household Spending Insights Index categories recorded growth in July. Motor vehicle spending rose 1.4 per cent, insurance increased 1.2 per cent, and health was up 1.1 per cent. "We have been anticipating a lift in household spending for some time, supported by rising real disposable incomes, increased household wealth, and a resilient labour market," Ms Allen said. Spending on education was flat, and utilities fell 0.5 per cent. The index shows spending has risen 6.4 per cent in 2025. The biggest gains occurred in the communications and digital, up 10.9 per cent; recreation, up 10.3 per cent; and hospitality, up 10.0 per cent. "Strong growth in spending on recreation and hospitality over the year underscores that consumers are prioritising experiences and being deliberate about their spending choices," Ms Allen said. "We expect a further pickup in spending through the rest of this year and into next, helping to drive a broader economic recovery." Education was the weakest category in 2025, down 1.8 per cent. Spending on utilities was up over the year due to cost-of-living energy subsidies being wound back. The bank expects the Reserve Bank to further cut the cash rate in November to 3.35 per cent. "A lower rate environment should help fuel consumer optimism and spending in the year ahead, and into 2026," Ms Allen said.
News.com.au
6 days ago
- News.com.au
Australia's biggest company collapses cost taxpayers millions
Australian taxpayers were forced to fork out $258.5 million last financial year thanks to the collapse of several high profile companies. can exclusively reveal how much a government scheme paid out for employee entitlements owed by failed companies, with some of the country's most recognisable brands topping the list. Retail giant Mosaic Brands – owner of Millers, Rivers, Crossroads, Katies, Noni B and Autograph – spectacularly collapsed last year owing a whopping $318 million, with more than 4000 staff members impacted. It topped the list for the biggest payout to employees from a government scheme called the Fair Entitlements Guarantee (FEG) last financial year. Almost 1150 former employees from Noni B made a claim, with the scheme shelling out an extraordinary $11.2 million. Two airlines that dramatically collapsed last year took out the spots for second and third biggest payouts from FEG. More than 310 former employees from Rex received $7.3 million worth of entitlements after it went into voluntary administration, but the airline continues to operate as a buyer is sought. Meanwhile, Bonza's collapse also saw 300 claims with $6.9 million paid out to employees. Another Australian company Montoro Roofing took out the fourth spot with 105 claimants that received $6.7 million. The high profile collapse of Booktopia, which was later bought out and resurrected, rounded out the top five with the scheme laying out just over $4 million to 150 former employees. MORE: 'Legit' Aussie tax secrets revealed University of Sydney corporate law professor Jason Harris said Australia is seeing an increasing number of companies go bust every year. He attributed this to higher interest rates, Covid assistance schemes no longer propping up failing firms and tax collections being enforced with small business tax debts sitting at more than $30 billion. Yet it wasn't just Australian employees impacted by Mosaic Brands - overseas suppliers in developing countries were left with a serious amount of unpaid debt, Mr Harris noted. A liquidator's report showed that 23 factory owners in Bangladesh were owed a total of $30 million by Mosaic. 'The company had an (alleged) pattern of behaviour over years of underpaying their suppliers and not paying them,' Mr Harris said. 'Mosaic Brands also got fined by the Fair Work Ombudsman's Office for underpaying their employees. So the company had problems for years. It's not at all surprising that they were one of the top claimants.' In 2023, NSW Employee Relations Inspectorate uncovered systemic underpayments of long service leave to 223 workers arising from payroll system errors at Mosaic Brands and its subsidiaries. The company pleaded guilty to 324 offences and led to a $29,000 fine, which was a NSW record at the time. Meanwhile airline businesses don't have many assets, Mr Harris explained, given there were two operators with some of the biggest FEG claims. 'It sounds weird but most of the planes are leased. Often the assets, are the landing spots that you have at the major airports and not a lot else,' he said. Do you have a story? Contact But there was one crucial entitlement missing from FEG's payout – superannuation – a huge issue generally when it comes to company collapses, Mr Harris added. 'There may well be employees whose retirement futures have been destroyed because their employer hasn't been paying or they're not keeping up with their super. Insolvency practitioners – I think it's in excess of 60 per cent of the reports that they file with ASIC say that there's underpaid super and that's been the case for years,' he said. 'Most people don't keep turning up to work if you stop paying them wages, but a lot of people don't understand their super. So they don't know how to check whether or not the payments that are going in are correct or whether there's an underpayment and then that accumulates. 'In some cases, it ends up pushing some companies under because the penalties for getting the super wrong can be very high. But that's cold comfort to the employees who then don't get paid their super and it's not covered by FEG.' Critically, Mr Harris said early intervention is desperately needed before things go terribly wrong with companies, adding generally the system currently lets corporate issues slide a lot of the time. 'A lot of businesses have warning signs over years. They end up in disputes with the tax office or they have multiple broken payment arrangements. There's red flags. Why do we keep waiting until the whole thing goes off the cliff and then wonder why there's nothing left?' he asked. 'The taxpayers are left to pick up the tab for the employees. Maybe we should be doing a bit more upfront. Maybe we should have more inspectors at the Department of Employment and Workplace Relations. Maybe ASIC should be bringing more enforcement cases. Maybe we could properly fund the Assetless Administration Fund. There's things that we can do that would reduce the concerns in this area. 'But every year we complain about it. Every year there's a new example of … workers losing out on entitlements. At what point do we say we actually want to fix this?' An ASIC spokesperson said the corporate regulator is not resourced to do more than around 150 to 200 investigations a year. Insolvency firm Jirsch Sutherland partner Chris Baskerville said construction is still the leading industry for corporate failure in Australia at the moment, followed closely by hospitality and retail, although professional services were starting to creep up. He said data from last financial year saw 15,000 companies go bust – more than the 11,000 that collapsed during the GFC. Little known was that FEG became one of the highest priority creditors after paying out entitlements, he added. 'Often we will go to FEG asking for funding, say if we're chasing a million dollar recovery where employees stand to gain, and we ask would you please fund our litigation so that I'm not going into this without any protection,' he said. 'Otherwise, I'm at full risk. We tend to find that FEG tends to fund either larger matters where there's obviously a greater exposure to FEG or larger firms.' Meanwhile in the 2024-25 financial year, the Fair Entitlements Guarantee paid $258.5 million in unpaid entitlements to eligible former employees. A Department of Employment and Workplace Relations spokesperson said FEG is a legislative safety net scheme of last resort. '(It) funds certain outstanding employee entitlements of eligible employees whose former employer has entered liquidation or bankruptcy and where these entitlements cannot be funded from other sources,' they said. Other employees who received payouts after companies failed including national food manufacturer HS Fresh Food whose almost 200 staff had $3.7 million paid and A. S. I Electrics saw 180 staff members given $3.3 million. Another Australian manufacturer Camatic, which collapsed with $29 million in debt, saw 65 employees receive $3.2 million, while a company called Tuftex Carpets had 61 claims amounting to $3.1 million. Rounding out the top 10 payments from FEG last financial year was construction company Allroads Pty Ltd with 102 employees receiving just over $3 million. Mr Harris called for the Assetless Administration Fund to be given more government funding so liquidators can prosecute cases. 'They only tip in a couple of million a year. If we've got 15,000 companies going under each year, the vast majority of them have very little or no assets,' he said. 'If they increase that fund so that liquidators could then do their job properly, I think we would see better outcomes and that would actually provide more of a deterrence. 'Running these cases can cost hundreds of thousands, in some cases, unfortunately, millions of dollars. And the Assetless Administration Fund is just insufficient and the resources that ASIC has to go after some of these practices are also insufficient.' A spokesperson for ASIC said the corporate regulator is in court nearly every day. 'Our investigation numbers have jumped 25 per cent and our new civil proceeding filings are up 23 per cent,' they said. 'ASIC must make difficult decisions about where to dedicate its focus to maximise regulatory impact and reduce harm to consumers and the reality is ASIC is not resourced to do more than around 150 to 200 investigations a year.' A Department of Employment and Workplace Relations spokesperson said it regularly refers matters to ASIC to investigate whether company directors or other officers should be disqualified from managing corporations where FEG may have been inappropriately relied on.
The Advertiser
13-08-2025
- The Advertiser
Black market smokes are burning a hole in small business
Three separate tobacconists. Three packs of black market cigarettes. $15 each. Cash only. No questions asked. An illegal vape at one of those NSW south coast businesses was a little pricier at $65. The only question was what flavour was preferred. With the three packs of Manchester 20s and the Ali Barbar 'Blueberry Blast' vape in hand, two police officers walking the beat are approached. They say to take it up with health authorities. Concerns are then raised with Eden-Monaro MP Kristy McBain's office staff. They promise to raise the issue with the federal minister. But for Cobargo Hotel owner Dave Allen, it's the policies of the government that have led to the exponential growth in illicit tobacco. He isn't the only one with that opinion. Former federal police and Australian Border Force officer Rohan Pike says the government's tobacco excise was directly responsible for the "billion-dollar" black market. "It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market," Mr Pike told ACM. However, federal MPs on the South Coast are not backing down from the "importance" of the tobacco excise in curbing smoking rates. ACM caught up with multiple voices on this widespread and damaging issue. It's also one on which we want to hear more from our readers. Comments are open at the bottom of the article, or email Mr Allen has been trying to get action on the widespread sale of illicit tobacco and illegal vapes across the South Coast for several years, but has been hitting brick walls at every turn. In order to dissuade smokers, tobacco prices have been driven by a federal excise topping $1.40 a cigarette, with the average pack of 20 costing about $40. Mr Allen said a further increase in the excise was coming in September to take that figure even higher. However, while the excise had increased from $16 to $28 a pack in six years, total revenue was going backward as consumers turned to the black market. And while once thought of as a potential avenue for quitting more-harmful cigarettes, vapes have been banned and only permitted to be sold under certain circumstances through pharmacies. "It's just madness," Mr Allen said. "None of this makes any sense. "As a community member, as a business owner, as a parent, I don't see any upside to any of this at all, with any of these policies." The damaging health outcomes of smoking are widely known - increased risk of cancers, heart disease, stroke, diabetes, chronic respiratory issues and reduced life expectancy among others. Tobacco use remains the leading cause of preventable death in Australia and is estimated to kill more than 24,000 Australians each year. Vapes and e-cigarettes are not much better. Their use has been linked to permanent lung damage, harm to developing adolescent brains, affected mental health, and the risk of poisoning and DNA damage from toxic chemicals contained within (other than the highly addictive nicotine). However, the growth in illicit tobacco products and illegal vapes has had a devastating effect on the small business sector as well. Venues like the Cobargo Hotel, which sell cigarettes legally, have experienced significant drops in revenue at the same time as copping an ever-increasing cost of doing business. "We regularly turned over $50,000 a week in our bottle shop - that's now down to $35-40,000 because we've lost tobacco sales," Mr Allen said. "They've gone to about 30 or 40 per cent [sales] on what they were. "And we've lost so much foot traffic because people aren't coming in to get their cigarettes, so they're not getting their six-pack of beer, or bottle of wine, or their loaf of bread or meal or whatever else they would normally get. "We worked out it's costing us in profit about $2000 a week." There have also been issues with insurance premiums and coverage for anyone selling tobacco amid alleged links to organised crime and hundreds of fire-bombings of premises in capital cities. "Anyone who sells tobacco, they're starting to just clamp down, either refusing coverage or jumping it up again," Mr Allen said. "If our sales continue to plummet, I'll just get to the point where it's [a tobacco licence] not worth having. "So then the only places people will be able to get tobacco are the illegal places. "And even if they do have this big crackdown and they start shutting some of these shops down, the crooks just change the business model. "They'll go to a garage, they'll go to houses, they'll go to street dealers, they'll go to Snapchat dealers. So it'll be just like illicit drugs." Rohan Pike is a former federal police officer who helped set up the Australian Border Force's tobacco strike team in 2015. He now runs a consulting firm with advice on illicit international trade as one of its key activities. "I was among the first to discover how big the problem really was," Mr Pike told ACM. "It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market." That market share has a significant impact on federal government excise revenue, he said. While the federal government looks to curb smoking figures by ever-increasing excises, the revenue is plummeting as consumers turn to the cheaper illicit options. "Tobacco excise revenue was around $16.5billion four or five years ago," Mr Pike said. "It's $7.4billion now and could go significantly lower than that. "It's just fallen off a cliff - the government's approach is failing at every level." Submissions to a parliamentary inquiry into the illegal tobacco trade close this week (August 15), with Mr Allen and Mr Pike among those making written submissions. "We're not going to be able to arrest our way out of this," Mr Pike said. "The government is looking for policy 'wins' without any care for the consequences. "You could bring in a licensing regime and store closures. But, for example, if all petrol stations in one town were found to be selling illicit cigarettes and get closed down, what's going to happen then?" The focus on supply was also a bone of contention for Mr Allen. "This whole problem would be solved relatively quickly if we took the approach of treating smoking as a health issue and implemented policies that promote harm minimisation and reducing demand, rather than trying to crush supply, an approach which has failed on all levels," he said. "We want to get smoking rates down, absolutely. But you've got to do it in a sensible way. "Treat smoking as a health problem, like we should be doing with drugs, not as a compliance issue "We can't control the supply. You've just seen that. "It's like trying to put the genie back in the bottle." Margaret (not her real name) is a Far South Coast smoker who now sources her fix through illicit sellers. She told ACM she used to spend around $300-400 a week on cigarettes. Now she can get a carton of 10 20-packs for $60. "I kind of wish I'd never started, of course. But I've been smoking for over 60 years and I'm not going to stop now. "This is the only way I can continue. "I don't enjoy supporting criminal gangs, but I think the government's been so greedy, they force people into it," Margaret said. "It's got nothing to do with health now, or trying to dissuade people because of its health hazard - which I know it is - it's just revenue raising. "And it's forcing people like me, who are law-abiding people, to go and break the law." Margaret said the government's "greed" was hurting the people least able to afford it. "It's mainly socially disadvantaged people that smoke, sadly, and they're the ones that are being forced into this situation. "I don't really feel guilty about it. I'm sort of angry at the government for being so greedy and making the price so ridiculous." She had a message for businesses struggling with the loss of legitimate sales and ever-increasing costs. "I think that the people retailing [tobacco products] at the correct price, they just should stop stocking them actually." Margaret said. "I mean, cigarettes have never been a big big profit maker. And they're expensive to have, like, you've got to pay a special premium on tobacco in your insurance policy. "So I guess they should just stop selling them." ACM asked federal MPs on the South Coast what the government was doing to halt the trade in illicit tobacco products and whether it agreed with calls that the excise increases were having detrimental effects. A spokesperson for Eden-Monaro MP Kristy McBain said the tobacco excise was "an important public health measure to encourage people to give up smoking". The spokesperson argued that part of the reason the excise revenue was down was because more people had given up smoking. However, they also acknowledged "the significant problem of illegal tobacco" was another part of the reason. While Member for Gilmore Fiona Phillips was silent on the excise issue, she said the government had a "comprehensive approach to tobacco control under the National Tobacco Strategy". "I understand the impact illegal tobacco and vaping can have on local families, especially young people, so I'm really pleased that our government is committed to stemming the illicit trade of tobacco in Australia," Ms Phillips told ACM. "We're boosting capacity at our borders and have invested $350million to tackle the black market in the last two years alone." Ms McBain's office spokesperson said the federal government was working with the states and territories when it came to enforcement, "resourcing states to undertake more prosecutions". "The Albanese government is taking on Big Tobacco on the one hand, and organised crime on the other, which continues to use vapes and illicit tobacco as a ready source of revenue to fund all their other criminal activities," they said. "We are committed to stemming the illicit trade of tobacco in Australia and continue to invest into boosting capacity to combat illicit trade at the border and deliver a coordinated, multi-agency, multi-jurisdictional response. "And the government recently appointed the interim Illicit Tobacco and E-cigarette Commissioner (ITEC) within the Australian Border Force to support the development and implementation of national strategies for the enforcement of illicit tobacco." As NSW Parliament resumed last week, among the first orders of business was the introduction of legislation to "disrupt" the illicit tobacco and illegal vape business model. Described as "the toughest in the country", the new laws include forced shop closures, and maximum penalties of $1.5million and seven years' imprisonment for the sale of illegal tobacco and vapes. NSW Health Minister Ryan Park also said the government would be looking into the option of making it an offence for landlords to knowingly lease to illegal tobacco and vape suppliers. "We understand the community's frustration at the growth of the illicit tobacco market," he said. "These will be among the toughest penalties in the country and will send a clear message to bad actors that selling illegal tobacco and vaping goods will not be tolerated in NSW. "We are disrupting the business model of the large-scale criminals who profit from addiction, tax evasion, and putting young people at risk. "This isn't just a serious health issue, it's about fairness, because these illegal operators are undercutting small businesses that are doing the right thing," Mr Park said. Premier Chris Minns was on record calling for the federal government to reduce the tobacco excise. He argued the significant increase in the cost of legal cigarettes had pushed consumers to the black market. Mr Park said he wanted to take action regardless. "I don't have the time, nor do I have the patience, to wait around to see if there's going to be any more movement on a federal excise," he said. If you think a tobacco or e-cigarette retailing law has been broken by a retailer in NSW, you can report this to your local Public Health Unit by calling 1300 066 055. Three separate tobacconists. Three packs of black market cigarettes. $15 each. Cash only. No questions asked. An illegal vape at one of those NSW south coast businesses was a little pricier at $65. The only question was what flavour was preferred. With the three packs of Manchester 20s and the Ali Barbar 'Blueberry Blast' vape in hand, two police officers walking the beat are approached. They say to take it up with health authorities. Concerns are then raised with Eden-Monaro MP Kristy McBain's office staff. They promise to raise the issue with the federal minister. But for Cobargo Hotel owner Dave Allen, it's the policies of the government that have led to the exponential growth in illicit tobacco. He isn't the only one with that opinion. Former federal police and Australian Border Force officer Rohan Pike says the government's tobacco excise was directly responsible for the "billion-dollar" black market. "It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market," Mr Pike told ACM. However, federal MPs on the South Coast are not backing down from the "importance" of the tobacco excise in curbing smoking rates. ACM caught up with multiple voices on this widespread and damaging issue. It's also one on which we want to hear more from our readers. Comments are open at the bottom of the article, or email Mr Allen has been trying to get action on the widespread sale of illicit tobacco and illegal vapes across the South Coast for several years, but has been hitting brick walls at every turn. In order to dissuade smokers, tobacco prices have been driven by a federal excise topping $1.40 a cigarette, with the average pack of 20 costing about $40. Mr Allen said a further increase in the excise was coming in September to take that figure even higher. However, while the excise had increased from $16 to $28 a pack in six years, total revenue was going backward as consumers turned to the black market. And while once thought of as a potential avenue for quitting more-harmful cigarettes, vapes have been banned and only permitted to be sold under certain circumstances through pharmacies. "It's just madness," Mr Allen said. "None of this makes any sense. "As a community member, as a business owner, as a parent, I don't see any upside to any of this at all, with any of these policies." The damaging health outcomes of smoking are widely known - increased risk of cancers, heart disease, stroke, diabetes, chronic respiratory issues and reduced life expectancy among others. Tobacco use remains the leading cause of preventable death in Australia and is estimated to kill more than 24,000 Australians each year. Vapes and e-cigarettes are not much better. Their use has been linked to permanent lung damage, harm to developing adolescent brains, affected mental health, and the risk of poisoning and DNA damage from toxic chemicals contained within (other than the highly addictive nicotine). However, the growth in illicit tobacco products and illegal vapes has had a devastating effect on the small business sector as well. Venues like the Cobargo Hotel, which sell cigarettes legally, have experienced significant drops in revenue at the same time as copping an ever-increasing cost of doing business. "We regularly turned over $50,000 a week in our bottle shop - that's now down to $35-40,000 because we've lost tobacco sales," Mr Allen said. "They've gone to about 30 or 40 per cent [sales] on what they were. "And we've lost so much foot traffic because people aren't coming in to get their cigarettes, so they're not getting their six-pack of beer, or bottle of wine, or their loaf of bread or meal or whatever else they would normally get. "We worked out it's costing us in profit about $2000 a week." There have also been issues with insurance premiums and coverage for anyone selling tobacco amid alleged links to organised crime and hundreds of fire-bombings of premises in capital cities. "Anyone who sells tobacco, they're starting to just clamp down, either refusing coverage or jumping it up again," Mr Allen said. "If our sales continue to plummet, I'll just get to the point where it's [a tobacco licence] not worth having. "So then the only places people will be able to get tobacco are the illegal places. "And even if they do have this big crackdown and they start shutting some of these shops down, the crooks just change the business model. "They'll go to a garage, they'll go to houses, they'll go to street dealers, they'll go to Snapchat dealers. So it'll be just like illicit drugs." Rohan Pike is a former federal police officer who helped set up the Australian Border Force's tobacco strike team in 2015. He now runs a consulting firm with advice on illicit international trade as one of its key activities. "I was among the first to discover how big the problem really was," Mr Pike told ACM. "It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market." That market share has a significant impact on federal government excise revenue, he said. While the federal government looks to curb smoking figures by ever-increasing excises, the revenue is plummeting as consumers turn to the cheaper illicit options. "Tobacco excise revenue was around $16.5billion four or five years ago," Mr Pike said. "It's $7.4billion now and could go significantly lower than that. "It's just fallen off a cliff - the government's approach is failing at every level." Submissions to a parliamentary inquiry into the illegal tobacco trade close this week (August 15), with Mr Allen and Mr Pike among those making written submissions. "We're not going to be able to arrest our way out of this," Mr Pike said. "The government is looking for policy 'wins' without any care for the consequences. "You could bring in a licensing regime and store closures. But, for example, if all petrol stations in one town were found to be selling illicit cigarettes and get closed down, what's going to happen then?" The focus on supply was also a bone of contention for Mr Allen. "This whole problem would be solved relatively quickly if we took the approach of treating smoking as a health issue and implemented policies that promote harm minimisation and reducing demand, rather than trying to crush supply, an approach which has failed on all levels," he said. "We want to get smoking rates down, absolutely. But you've got to do it in a sensible way. "Treat smoking as a health problem, like we should be doing with drugs, not as a compliance issue "We can't control the supply. You've just seen that. "It's like trying to put the genie back in the bottle." Margaret (not her real name) is a Far South Coast smoker who now sources her fix through illicit sellers. She told ACM she used to spend around $300-400 a week on cigarettes. Now she can get a carton of 10 20-packs for $60. "I kind of wish I'd never started, of course. But I've been smoking for over 60 years and I'm not going to stop now. "This is the only way I can continue. "I don't enjoy supporting criminal gangs, but I think the government's been so greedy, they force people into it," Margaret said. "It's got nothing to do with health now, or trying to dissuade people because of its health hazard - which I know it is - it's just revenue raising. "And it's forcing people like me, who are law-abiding people, to go and break the law." Margaret said the government's "greed" was hurting the people least able to afford it. "It's mainly socially disadvantaged people that smoke, sadly, and they're the ones that are being forced into this situation. "I don't really feel guilty about it. I'm sort of angry at the government for being so greedy and making the price so ridiculous." She had a message for businesses struggling with the loss of legitimate sales and ever-increasing costs. "I think that the people retailing [tobacco products] at the correct price, they just should stop stocking them actually." Margaret said. "I mean, cigarettes have never been a big big profit maker. And they're expensive to have, like, you've got to pay a special premium on tobacco in your insurance policy. "So I guess they should just stop selling them." ACM asked federal MPs on the South Coast what the government was doing to halt the trade in illicit tobacco products and whether it agreed with calls that the excise increases were having detrimental effects. A spokesperson for Eden-Monaro MP Kristy McBain said the tobacco excise was "an important public health measure to encourage people to give up smoking". The spokesperson argued that part of the reason the excise revenue was down was because more people had given up smoking. However, they also acknowledged "the significant problem of illegal tobacco" was another part of the reason. While Member for Gilmore Fiona Phillips was silent on the excise issue, she said the government had a "comprehensive approach to tobacco control under the National Tobacco Strategy". "I understand the impact illegal tobacco and vaping can have on local families, especially young people, so I'm really pleased that our government is committed to stemming the illicit trade of tobacco in Australia," Ms Phillips told ACM. "We're boosting capacity at our borders and have invested $350million to tackle the black market in the last two years alone." Ms McBain's office spokesperson said the federal government was working with the states and territories when it came to enforcement, "resourcing states to undertake more prosecutions". "The Albanese government is taking on Big Tobacco on the one hand, and organised crime on the other, which continues to use vapes and illicit tobacco as a ready source of revenue to fund all their other criminal activities," they said. "We are committed to stemming the illicit trade of tobacco in Australia and continue to invest into boosting capacity to combat illicit trade at the border and deliver a coordinated, multi-agency, multi-jurisdictional response. "And the government recently appointed the interim Illicit Tobacco and E-cigarette Commissioner (ITEC) within the Australian Border Force to support the development and implementation of national strategies for the enforcement of illicit tobacco." As NSW Parliament resumed last week, among the first orders of business was the introduction of legislation to "disrupt" the illicit tobacco and illegal vape business model. Described as "the toughest in the country", the new laws include forced shop closures, and maximum penalties of $1.5million and seven years' imprisonment for the sale of illegal tobacco and vapes. NSW Health Minister Ryan Park also said the government would be looking into the option of making it an offence for landlords to knowingly lease to illegal tobacco and vape suppliers. "We understand the community's frustration at the growth of the illicit tobacco market," he said. "These will be among the toughest penalties in the country and will send a clear message to bad actors that selling illegal tobacco and vaping goods will not be tolerated in NSW. "We are disrupting the business model of the large-scale criminals who profit from addiction, tax evasion, and putting young people at risk. "This isn't just a serious health issue, it's about fairness, because these illegal operators are undercutting small businesses that are doing the right thing," Mr Park said. Premier Chris Minns was on record calling for the federal government to reduce the tobacco excise. He argued the significant increase in the cost of legal cigarettes had pushed consumers to the black market. Mr Park said he wanted to take action regardless. "I don't have the time, nor do I have the patience, to wait around to see if there's going to be any more movement on a federal excise," he said. If you think a tobacco or e-cigarette retailing law has been broken by a retailer in NSW, you can report this to your local Public Health Unit by calling 1300 066 055. Three separate tobacconists. Three packs of black market cigarettes. $15 each. Cash only. No questions asked. An illegal vape at one of those NSW south coast businesses was a little pricier at $65. The only question was what flavour was preferred. With the three packs of Manchester 20s and the Ali Barbar 'Blueberry Blast' vape in hand, two police officers walking the beat are approached. They say to take it up with health authorities. Concerns are then raised with Eden-Monaro MP Kristy McBain's office staff. They promise to raise the issue with the federal minister. But for Cobargo Hotel owner Dave Allen, it's the policies of the government that have led to the exponential growth in illicit tobacco. He isn't the only one with that opinion. Former federal police and Australian Border Force officer Rohan Pike says the government's tobacco excise was directly responsible for the "billion-dollar" black market. "It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market," Mr Pike told ACM. However, federal MPs on the South Coast are not backing down from the "importance" of the tobacco excise in curbing smoking rates. ACM caught up with multiple voices on this widespread and damaging issue. It's also one on which we want to hear more from our readers. Comments are open at the bottom of the article, or email Mr Allen has been trying to get action on the widespread sale of illicit tobacco and illegal vapes across the South Coast for several years, but has been hitting brick walls at every turn. In order to dissuade smokers, tobacco prices have been driven by a federal excise topping $1.40 a cigarette, with the average pack of 20 costing about $40. Mr Allen said a further increase in the excise was coming in September to take that figure even higher. However, while the excise had increased from $16 to $28 a pack in six years, total revenue was going backward as consumers turned to the black market. And while once thought of as a potential avenue for quitting more-harmful cigarettes, vapes have been banned and only permitted to be sold under certain circumstances through pharmacies. "It's just madness," Mr Allen said. "None of this makes any sense. "As a community member, as a business owner, as a parent, I don't see any upside to any of this at all, with any of these policies." The damaging health outcomes of smoking are widely known - increased risk of cancers, heart disease, stroke, diabetes, chronic respiratory issues and reduced life expectancy among others. Tobacco use remains the leading cause of preventable death in Australia and is estimated to kill more than 24,000 Australians each year. Vapes and e-cigarettes are not much better. Their use has been linked to permanent lung damage, harm to developing adolescent brains, affected mental health, and the risk of poisoning and DNA damage from toxic chemicals contained within (other than the highly addictive nicotine). However, the growth in illicit tobacco products and illegal vapes has had a devastating effect on the small business sector as well. Venues like the Cobargo Hotel, which sell cigarettes legally, have experienced significant drops in revenue at the same time as copping an ever-increasing cost of doing business. "We regularly turned over $50,000 a week in our bottle shop - that's now down to $35-40,000 because we've lost tobacco sales," Mr Allen said. "They've gone to about 30 or 40 per cent [sales] on what they were. "And we've lost so much foot traffic because people aren't coming in to get their cigarettes, so they're not getting their six-pack of beer, or bottle of wine, or their loaf of bread or meal or whatever else they would normally get. "We worked out it's costing us in profit about $2000 a week." There have also been issues with insurance premiums and coverage for anyone selling tobacco amid alleged links to organised crime and hundreds of fire-bombings of premises in capital cities. "Anyone who sells tobacco, they're starting to just clamp down, either refusing coverage or jumping it up again," Mr Allen said. "If our sales continue to plummet, I'll just get to the point where it's [a tobacco licence] not worth having. "So then the only places people will be able to get tobacco are the illegal places. "And even if they do have this big crackdown and they start shutting some of these shops down, the crooks just change the business model. "They'll go to a garage, they'll go to houses, they'll go to street dealers, they'll go to Snapchat dealers. So it'll be just like illicit drugs." Rohan Pike is a former federal police officer who helped set up the Australian Border Force's tobacco strike team in 2015. He now runs a consulting firm with advice on illicit international trade as one of its key activities. "I was among the first to discover how big the problem really was," Mr Pike told ACM. "It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market." That market share has a significant impact on federal government excise revenue, he said. While the federal government looks to curb smoking figures by ever-increasing excises, the revenue is plummeting as consumers turn to the cheaper illicit options. "Tobacco excise revenue was around $16.5billion four or five years ago," Mr Pike said. "It's $7.4billion now and could go significantly lower than that. "It's just fallen off a cliff - the government's approach is failing at every level." Submissions to a parliamentary inquiry into the illegal tobacco trade close this week (August 15), with Mr Allen and Mr Pike among those making written submissions. "We're not going to be able to arrest our way out of this," Mr Pike said. "The government is looking for policy 'wins' without any care for the consequences. "You could bring in a licensing regime and store closures. But, for example, if all petrol stations in one town were found to be selling illicit cigarettes and get closed down, what's going to happen then?" The focus on supply was also a bone of contention for Mr Allen. "This whole problem would be solved relatively quickly if we took the approach of treating smoking as a health issue and implemented policies that promote harm minimisation and reducing demand, rather than trying to crush supply, an approach which has failed on all levels," he said. "We want to get smoking rates down, absolutely. But you've got to do it in a sensible way. "Treat smoking as a health problem, like we should be doing with drugs, not as a compliance issue "We can't control the supply. You've just seen that. "It's like trying to put the genie back in the bottle." Margaret (not her real name) is a Far South Coast smoker who now sources her fix through illicit sellers. She told ACM she used to spend around $300-400 a week on cigarettes. Now she can get a carton of 10 20-packs for $60. "I kind of wish I'd never started, of course. But I've been smoking for over 60 years and I'm not going to stop now. "This is the only way I can continue. "I don't enjoy supporting criminal gangs, but I think the government's been so greedy, they force people into it," Margaret said. "It's got nothing to do with health now, or trying to dissuade people because of its health hazard - which I know it is - it's just revenue raising. "And it's forcing people like me, who are law-abiding people, to go and break the law." Margaret said the government's "greed" was hurting the people least able to afford it. "It's mainly socially disadvantaged people that smoke, sadly, and they're the ones that are being forced into this situation. "I don't really feel guilty about it. I'm sort of angry at the government for being so greedy and making the price so ridiculous." She had a message for businesses struggling with the loss of legitimate sales and ever-increasing costs. "I think that the people retailing [tobacco products] at the correct price, they just should stop stocking them actually." Margaret said. "I mean, cigarettes have never been a big big profit maker. And they're expensive to have, like, you've got to pay a special premium on tobacco in your insurance policy. "So I guess they should just stop selling them." ACM asked federal MPs on the South Coast what the government was doing to halt the trade in illicit tobacco products and whether it agreed with calls that the excise increases were having detrimental effects. A spokesperson for Eden-Monaro MP Kristy McBain said the tobacco excise was "an important public health measure to encourage people to give up smoking". The spokesperson argued that part of the reason the excise revenue was down was because more people had given up smoking. However, they also acknowledged "the significant problem of illegal tobacco" was another part of the reason. While Member for Gilmore Fiona Phillips was silent on the excise issue, she said the government had a "comprehensive approach to tobacco control under the National Tobacco Strategy". "I understand the impact illegal tobacco and vaping can have on local families, especially young people, so I'm really pleased that our government is committed to stemming the illicit trade of tobacco in Australia," Ms Phillips told ACM. "We're boosting capacity at our borders and have invested $350million to tackle the black market in the last two years alone." Ms McBain's office spokesperson said the federal government was working with the states and territories when it came to enforcement, "resourcing states to undertake more prosecutions". "The Albanese government is taking on Big Tobacco on the one hand, and organised crime on the other, which continues to use vapes and illicit tobacco as a ready source of revenue to fund all their other criminal activities," they said. "We are committed to stemming the illicit trade of tobacco in Australia and continue to invest into boosting capacity to combat illicit trade at the border and deliver a coordinated, multi-agency, multi-jurisdictional response. "And the government recently appointed the interim Illicit Tobacco and E-cigarette Commissioner (ITEC) within the Australian Border Force to support the development and implementation of national strategies for the enforcement of illicit tobacco." As NSW Parliament resumed last week, among the first orders of business was the introduction of legislation to "disrupt" the illicit tobacco and illegal vape business model. Described as "the toughest in the country", the new laws include forced shop closures, and maximum penalties of $1.5million and seven years' imprisonment for the sale of illegal tobacco and vapes. NSW Health Minister Ryan Park also said the government would be looking into the option of making it an offence for landlords to knowingly lease to illegal tobacco and vape suppliers. "We understand the community's frustration at the growth of the illicit tobacco market," he said. "These will be among the toughest penalties in the country and will send a clear message to bad actors that selling illegal tobacco and vaping goods will not be tolerated in NSW. "We are disrupting the business model of the large-scale criminals who profit from addiction, tax evasion, and putting young people at risk. "This isn't just a serious health issue, it's about fairness, because these illegal operators are undercutting small businesses that are doing the right thing," Mr Park said. Premier Chris Minns was on record calling for the federal government to reduce the tobacco excise. He argued the significant increase in the cost of legal cigarettes had pushed consumers to the black market. Mr Park said he wanted to take action regardless. "I don't have the time, nor do I have the patience, to wait around to see if there's going to be any more movement on a federal excise," he said. If you think a tobacco or e-cigarette retailing law has been broken by a retailer in NSW, you can report this to your local Public Health Unit by calling 1300 066 055. Three separate tobacconists. Three packs of black market cigarettes. $15 each. Cash only. No questions asked. An illegal vape at one of those NSW south coast businesses was a little pricier at $65. The only question was what flavour was preferred. With the three packs of Manchester 20s and the Ali Barbar 'Blueberry Blast' vape in hand, two police officers walking the beat are approached. They say to take it up with health authorities. Concerns are then raised with Eden-Monaro MP Kristy McBain's office staff. They promise to raise the issue with the federal minister. But for Cobargo Hotel owner Dave Allen, it's the policies of the government that have led to the exponential growth in illicit tobacco. He isn't the only one with that opinion. Former federal police and Australian Border Force officer Rohan Pike says the government's tobacco excise was directly responsible for the "billion-dollar" black market. "It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market," Mr Pike told ACM. However, federal MPs on the South Coast are not backing down from the "importance" of the tobacco excise in curbing smoking rates. ACM caught up with multiple voices on this widespread and damaging issue. It's also one on which we want to hear more from our readers. Comments are open at the bottom of the article, or email Mr Allen has been trying to get action on the widespread sale of illicit tobacco and illegal vapes across the South Coast for several years, but has been hitting brick walls at every turn. In order to dissuade smokers, tobacco prices have been driven by a federal excise topping $1.40 a cigarette, with the average pack of 20 costing about $40. Mr Allen said a further increase in the excise was coming in September to take that figure even higher. However, while the excise had increased from $16 to $28 a pack in six years, total revenue was going backward as consumers turned to the black market. And while once thought of as a potential avenue for quitting more-harmful cigarettes, vapes have been banned and only permitted to be sold under certain circumstances through pharmacies. "It's just madness," Mr Allen said. "None of this makes any sense. "As a community member, as a business owner, as a parent, I don't see any upside to any of this at all, with any of these policies." The damaging health outcomes of smoking are widely known - increased risk of cancers, heart disease, stroke, diabetes, chronic respiratory issues and reduced life expectancy among others. Tobacco use remains the leading cause of preventable death in Australia and is estimated to kill more than 24,000 Australians each year. Vapes and e-cigarettes are not much better. Their use has been linked to permanent lung damage, harm to developing adolescent brains, affected mental health, and the risk of poisoning and DNA damage from toxic chemicals contained within (other than the highly addictive nicotine). However, the growth in illicit tobacco products and illegal vapes has had a devastating effect on the small business sector as well. Venues like the Cobargo Hotel, which sell cigarettes legally, have experienced significant drops in revenue at the same time as copping an ever-increasing cost of doing business. "We regularly turned over $50,000 a week in our bottle shop - that's now down to $35-40,000 because we've lost tobacco sales," Mr Allen said. "They've gone to about 30 or 40 per cent [sales] on what they were. "And we've lost so much foot traffic because people aren't coming in to get their cigarettes, so they're not getting their six-pack of beer, or bottle of wine, or their loaf of bread or meal or whatever else they would normally get. "We worked out it's costing us in profit about $2000 a week." There have also been issues with insurance premiums and coverage for anyone selling tobacco amid alleged links to organised crime and hundreds of fire-bombings of premises in capital cities. "Anyone who sells tobacco, they're starting to just clamp down, either refusing coverage or jumping it up again," Mr Allen said. "If our sales continue to plummet, I'll just get to the point where it's [a tobacco licence] not worth having. "So then the only places people will be able to get tobacco are the illegal places. "And even if they do have this big crackdown and they start shutting some of these shops down, the crooks just change the business model. "They'll go to a garage, they'll go to houses, they'll go to street dealers, they'll go to Snapchat dealers. So it'll be just like illicit drugs." Rohan Pike is a former federal police officer who helped set up the Australian Border Force's tobacco strike team in 2015. He now runs a consulting firm with advice on illicit international trade as one of its key activities. "I was among the first to discover how big the problem really was," Mr Pike told ACM. "It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market." That market share has a significant impact on federal government excise revenue, he said. While the federal government looks to curb smoking figures by ever-increasing excises, the revenue is plummeting as consumers turn to the cheaper illicit options. "Tobacco excise revenue was around $16.5billion four or five years ago," Mr Pike said. "It's $7.4billion now and could go significantly lower than that. "It's just fallen off a cliff - the government's approach is failing at every level." Submissions to a parliamentary inquiry into the illegal tobacco trade close this week (August 15), with Mr Allen and Mr Pike among those making written submissions. "We're not going to be able to arrest our way out of this," Mr Pike said. "The government is looking for policy 'wins' without any care for the consequences. "You could bring in a licensing regime and store closures. But, for example, if all petrol stations in one town were found to be selling illicit cigarettes and get closed down, what's going to happen then?" The focus on supply was also a bone of contention for Mr Allen. "This whole problem would be solved relatively quickly if we took the approach of treating smoking as a health issue and implemented policies that promote harm minimisation and reducing demand, rather than trying to crush supply, an approach which has failed on all levels," he said. "We want to get smoking rates down, absolutely. But you've got to do it in a sensible way. "Treat smoking as a health problem, like we should be doing with drugs, not as a compliance issue "We can't control the supply. You've just seen that. "It's like trying to put the genie back in the bottle." Margaret (not her real name) is a Far South Coast smoker who now sources her fix through illicit sellers. She told ACM she used to spend around $300-400 a week on cigarettes. Now she can get a carton of 10 20-packs for $60. "I kind of wish I'd never started, of course. But I've been smoking for over 60 years and I'm not going to stop now. "This is the only way I can continue. "I don't enjoy supporting criminal gangs, but I think the government's been so greedy, they force people into it," Margaret said. "It's got nothing to do with health now, or trying to dissuade people because of its health hazard - which I know it is - it's just revenue raising. "And it's forcing people like me, who are law-abiding people, to go and break the law." Margaret said the government's "greed" was hurting the people least able to afford it. "It's mainly socially disadvantaged people that smoke, sadly, and they're the ones that are being forced into this situation. "I don't really feel guilty about it. I'm sort of angry at the government for being so greedy and making the price so ridiculous." She had a message for businesses struggling with the loss of legitimate sales and ever-increasing costs. "I think that the people retailing [tobacco products] at the correct price, they just should stop stocking them actually." Margaret said. "I mean, cigarettes have never been a big big profit maker. And they're expensive to have, like, you've got to pay a special premium on tobacco in your insurance policy. "So I guess they should just stop selling them." ACM asked federal MPs on the South Coast what the government was doing to halt the trade in illicit tobacco products and whether it agreed with calls that the excise increases were having detrimental effects. A spokesperson for Eden-Monaro MP Kristy McBain said the tobacco excise was "an important public health measure to encourage people to give up smoking". The spokesperson argued that part of the reason the excise revenue was down was because more people had given up smoking. However, they also acknowledged "the significant problem of illegal tobacco" was another part of the reason. While Member for Gilmore Fiona Phillips was silent on the excise issue, she said the government had a "comprehensive approach to tobacco control under the National Tobacco Strategy". "I understand the impact illegal tobacco and vaping can have on local families, especially young people, so I'm really pleased that our government is committed to stemming the illicit trade of tobacco in Australia," Ms Phillips told ACM. "We're boosting capacity at our borders and have invested $350million to tackle the black market in the last two years alone." Ms McBain's office spokesperson said the federal government was working with the states and territories when it came to enforcement, "resourcing states to undertake more prosecutions". "The Albanese government is taking on Big Tobacco on the one hand, and organised crime on the other, which continues to use vapes and illicit tobacco as a ready source of revenue to fund all their other criminal activities," they said. "We are committed to stemming the illicit trade of tobacco in Australia and continue to invest into boosting capacity to combat illicit trade at the border and deliver a coordinated, multi-agency, multi-jurisdictional response. "And the government recently appointed the interim Illicit Tobacco and E-cigarette Commissioner (ITEC) within the Australian Border Force to support the development and implementation of national strategies for the enforcement of illicit tobacco." As NSW Parliament resumed last week, among the first orders of business was the introduction of legislation to "disrupt" the illicit tobacco and illegal vape business model. Described as "the toughest in the country", the new laws include forced shop closures, and maximum penalties of $1.5million and seven years' imprisonment for the sale of illegal tobacco and vapes. NSW Health Minister Ryan Park also said the government would be looking into the option of making it an offence for landlords to knowingly lease to illegal tobacco and vape suppliers. "We understand the community's frustration at the growth of the illicit tobacco market," he said. "These will be among the toughest penalties in the country and will send a clear message to bad actors that selling illegal tobacco and vaping goods will not be tolerated in NSW. "We are disrupting the business model of the large-scale criminals who profit from addiction, tax evasion, and putting young people at risk. "This isn't just a serious health issue, it's about fairness, because these illegal operators are undercutting small businesses that are doing the right thing," Mr Park said. Premier Chris Minns was on record calling for the federal government to reduce the tobacco excise. He argued the significant increase in the cost of legal cigarettes had pushed consumers to the black market. Mr Park said he wanted to take action regardless. "I don't have the time, nor do I have the patience, to wait around to see if there's going to be any more movement on a federal excise," he said. If you think a tobacco or e-cigarette retailing law has been broken by a retailer in NSW, you can report this to your local Public Health Unit by calling 1300 066 055.
