Latest news with #blackmarket
The Guardian
4 hours ago
- Business
- The Guardian
Tobacco excise isn't making Australians smoke less and should be frozen to curb black market, economists say
Economists say the tobacco excise rate is too high, is not lowering smoking rates and should be frozen or even 'radically' reduced as a way to address the soaring black market trade in cigarettes. It comes ahead of a meeting of state and federal health ministers on Friday and after the NSW premier, Chris Minns, last week demanded the Albanese government cut the excise rate to combat an explosion in black market tobacco and an associated rise in organised crime. In Victoria a rash of firebombings have underlined the policing challenges associated with the illegal cigarette trade, with the state's Labor government also calling for a cut to the excise rate, which has tripled over the past decade – making Australian cigarettes the most expensive in the developed world. With the Australian Taxation Office estimating that about a fifth of tobacco for sale is now illegal, the director of the ANU's tax and transfer policy institute, Bob Breunig, said 'the evidence is pretty clear that every time we raise excise at this point we are not reducing smoking at all'. 'The point is to get people to smoke less, and it's not working. I don't think we should lower it, but freezing it is a good idea, and then doing something that deals with illegal tobacco is the next obvious step,' Breunig said. Breunig acknowledged the tax, alongside other complementary measures, had contributed to the halving in smoking rates over the past two decades, from 21% of adults smoking daily in 2005 to just shy of 11% in 2022. 'Our tobacco policies have been very successful versus other countries. We've had a big success story and we've gone as far as we can go with the excise. Now it's time to pull other levers, such as more education.' Sign up for Guardian Australia's breaking news email Over the past decade, the excise rate per cigarette has tripled from 46c to $1.40. The excise now accounts for $28 of the average $40 price for a packet of 20 cigarettes. For some time a rising tax was associated with the twin benefits of falling smoking rates and rising revenue, but after peaking at $16.3bn in 2019-20, federal excise receipts have plunged. The March budget forecasts tobacco excise receipts will be just $7.4bn in this financial year – the lowest since 2012-13 – and will continue to fall to $6.7bn by the end of the decade. Rather than a sudden collapse in smoking rates, experts point to an explosion in the availability of black market tobacco in recent years. An equivalent of 605.8m cigarettes in illegal tobacco was seized at the border in 2019-20, according to government figures. By 2022-23, border seizures had reached the equivalent of 2.6bn cigarettes before easing to 2.2bn in 2023-24. Jim Chalmers and the federal health minister, Mark Butler, have both ruled out lowering the excise, arguing it will do nothing to reduce the illegal tobacco trade. Instead, they advocate stronger compliance measures. Terry Slevin, the chief executive of the Public Health Association, agreed, saying he was worried that policymakers were being 'conned' by the tobacco industry. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion 'I think it's perfectly legitimate for the current excise rate to remain at its current level to allow time for the proper enforcement to be put [in] place,' Levin said. 'Once that's in place and the immediate and substantial problem of illicit tobacco has been addressed, then we can consider that [the excise rate] along with other tobacco-control strategies to reduce what remains an enormous burden on the health of people in Australia.' Fei Gao, a business law lecturer at the University of Sydney, said neither of the two 'main goals' of the excise – as a source of revenue and to discourage smoking – 'have or will be achieved in the future, because of the existence of the black market. 'The government needs to realise they can't have it both ways,' Gao said. 'Either the tax is mainly a revenue source, which means they need to engage experts to work out the ideal [lower] rate that will capture the maximum revenue, or they need to keep a high excise rate and then reinvest the receipts into fighting the black market.' Richard Holden, an economics professor at UNSW's business school, said it was clear that the level of the excise rate had passed a tipping point and was now counterproductive. 'We went pretty hard on increasing the excise rate and it backfired. They raised it too high,' Holden said. 'Clearly the excise has gotten over a threshold and triggered an illicit market reaction. ' Holden said it would take more than a 'tweak' to the excise rate to remove the incentive to buy and sell illegal tobacco, suggesting a radical excise reduction for two years. The excise rate increases twice a year, in March and September, in line with the rise in a measure of wages called the average weekly ordinary time earnings. On top of this indexation, the tobacco excise is also climbing by an extra 5% a year for the three years to September 2026. As a share of income, cigarettes are nearly four times more expensive than they were three decades ago.
BBC News
14 hours ago
- BBC News
Ketamine swapped for salt as smugglers exploit Europe loophole in booming market
The customs officers at Brussels Airport were stunned. They had opened crates in the back of a lorry expecting to find a tonne of medical ketamine. But somewhere on its journey, the white powder had been switched for zigzagging hundreds of miles across Europe, the contents of the consignment had been verified five days earlier by customs officers at Schipol Airport in the Netherlands, ready for its road trip to somewhere between Amsterdam and Brussels the ketamine had vanished - the authorities believe most likely into the black market - replaced by the salt and freshly forged it is not known where the drug ended up, and no-one responsible has been caught, this case shows the increasingly elaborate methods crime gangs are using to traffic ketamine across Europe and into the exploit its classification in some countries as a legal medicine by transporting it across multiple borders to confuse the authorities. Consignments then disappear and are illegally sold as a hallucinogenic drug."It's clear that criminal organisations are misusing all these long routes," says Marc Vancoillie, head of Belgium's central directorate of investigators have uncovered at least 28 similar consignment switches - involving an estimated 28 tonnes of ketamine - since this case in 2023. Some criminal gangs are now making more money from selling ketamine than other illegal drugs such as cocaine, Mr Vancoille told us, describing the situation as an the UK, ketamine consumption has risen 85% between 2023 and 2024, wastewater analysis - sampling human waste from sewage plants to measure the scale of illicit drug use - figures show there were 53 deaths involving ketamine in 2023. It has been linked to high-profile deaths including those of Friends actor Matthew Perry and drag star The Vivienne. Abuse of the drug can also lead to cognitive problems and permanent bladder organised crime groups "are clearly stepping into this new market", says Adam Thompson from the National Crime Agency (NCA).The challenge for European law enforcement agencies is compounded by the fact that ketamine is used as a vital legitimate anaesthetic in hospitals and veterinary clinics, as well as being a popular illegal recreational on 4 Investigates has examined how organised crime groups are exploiting this dual classification. In countries such as the UK and Belgium, ketamine is classified as a in countries including Austria, Germany and the Netherlands, it is regulated as a medicine, meaning it faces less scrutiny during its import and transit."It starts off being produced for those markets and exported from countries like India," said Mr Thompson. "But then it's diverted by organised crime groups into illicit supply." Armed with this knowledge, the smugglers have developed a preferred route - shipping the drug from India, where it is legitimately produced as a medicine, into Germany, through the Netherlands and Belgium, then on to the the case of the disappearing consignment at Brussels Airport, the drug was originally flown from India to Austria. It was then driven to Germany before being flown to the Netherlands where it was unloaded again and readied for the road trip to Belgium. During all of these connections it was being moved somewhere during this last leg, it was swapped with salt - and it is thought the ketamine entered the black market for illegal another case, a container arriving at the Belgian port of Antwerp which had been verified as containing ketamine, was found to hold groups are also exploiting legal supply chains by setting up front companies to import ketamine under the guise of legitimate use, only to divert it into illicit markets once it arrives in more countries and jurisdictions it goes through, the more difficult it is to investigate, requiring liaison between law enforcement agencies, Belgian and Dutch Police told the BBC. It also helps disguise where the front company - an import company which obtains a legitimate licence - is based."They [the criminals] will put all kinds of steps - companies in different countries - in between. So it's hard for us to backtrack if we find any large quantities of ketamine," said Ch Insp Peter Jansen, a drug expert from the Dutch police. Listen: The Ketamine Trail - Paul Kenyon investigates how tonnes of the drug are getting into the UK Germany, Europe's biggest importer of ketamine, has a huge pharmaceutical industry, so large consignments are less likely to raise 2023 alone,100 tonnes of ketamine were imported from India, Mr Vancoillie says - far more than would be expected for legitimate medical and veterinary use."Between 20 to 25% will be necessary for legal purposes and not more," he told us. "It's tonnes and tonnes and tonnes that disappeared in criminal routes."European police forces say they are planning to liaise with the Indian authorities to try to tackle the problem, with Germany's Federal Criminal Police Office telling us it carries out intensive monitoring of new psychoactive substances like added it was "in close contact with national and international authorities, organisations and institutions in order to be able to anticipate and react to further developments and new trends". 'Needle in a haystack' The smuggling network sees plenty of reward in England and Wales, where an estimated 269,000 people aged 16-59 reported using ketamine in the year ending March 2024, government figures show. Among young people aged 16-24, usage has soared by 231% since 2013."Ketamine is a very cheap drug compared to some other illicit drugs," the NCA's Adam Thompson explained. "It's sold for about £20 a gram at street level, compared to £60 to £100 for cocaine."The drug is being smuggled into the UK through two main routes - concealed in small parcels sent by post, or hidden in lorries and vans arriving via ferries and the Channel Tunnel, the NCA hundreds of thousands of parcels arriving in the UK only a small percentage are spotted. It's "very easy to hide that needle in the haystack," Mr Thompson Belgium, some criminal groups are using AirBnBs to store ketamine before sending it through France to the UK, by cars, lorries or trucks, according to Mr one case, somebody reported as suspicious a group of men who were moving IKEA boxes into a van. The vehicle had been hired, which meant the authorities were able to track its prior movements back to an AirBnB in Staden, they found 480kg (1,058lbs) of ketamine, along with 117kg of cocaine, and 63kg of heroin, stored in a British nationals were eventually linked to the case and ketamine use continues to rise and trafficking methods grow more inventive, authorities across Europe are calling for greater international co-operation."It's a responsibility of agencies and countries across the globe," Mr Thompson warned, "to think about this."
News.com.au
4 days ago
- Business
- News.com.au
Experts back NSW Premier Chris Minns' plea for cigarette tax cut despite opposition
NSW Premier Chris Minns says law-abiding citizens are being 'dragged into the black market' by the federal government's tobacco tax – and he wants that to change. Mr Minns threw down the gauntlet this week when he called for a re-evaluation of the tobacco excise, kicking-off political rows in both Sydney and Canberra. Twice yearly, the federal government sets the excise for tobacco products but in this year's budget recorded a $5.2bn decline in revenue since 2022-23. The NSW Premier has pointed the finger at illicit sales at tobacconists, some 5000 of which have opened up across NSW over the past few years. 'There's a whole bunch of law-abiding people who wouldn't break the law in a million years,' Mr Minns said. 'But, they're being dragged into a black market where they go to the store and they can either buy a $17 packet of illegal cigarettes or a $60 packet of cigarettes. 'It's a no-brainer.' Despite pushback, Mr Minns said every tax change started with 'an idea from someone who calls out a policy that's no longer fit for purpose'. 'So, let's get the ball rolling here because these illegal tobacco stores are pushing out hot bread shops, small businesses and restaurants. 'Because the sales from illegal tobacco are so lucrative, they can just pay the rent at a higher price. 'Something's gone amiss here and we need to have a crack at fixing it alongside our federal colleagues.' Mr Minns earlier signalled that police resources may have to be moved from domestic violence and organised crime to combat illicit tobacco. Mr Minns said the situation was 'intolerable', with 'every to-let shop in every high street in Sydney taken over by a tobacconist'. 'The biggest supporters of a massive excise on tobacco sales in NSW are probably organised criminals,' he said. 'It's a giant black market and major display on every street in every suburb in NSW.' No easy answers On Wednesday, federal Treasurer Jim Chalmers ruled out any change to the excise, saying making cigarettes cheaper wouldn't solve the issue of the booming illegal tobacco trade. In NSW, there are about 19,500 tobacco stores across the state – up from 14,500 a few years earlier – that are overseen by only about 30 health inspectors. A parliamentary inquiry into illicit tobacco sales, pushed for by the NSW opposition, will later this year examine which agency is best suited to the task. Until now, Liberal leader Mark Speakman has remained mum on whether NSW Police should takeover illicit tobacco enforcement from NSW Health. On Thursday, Mr Speakman said illicit tobacco had exploded under Mr Minns and organised criminal gangs were 'raking in big money'. 'They know NSW has minimal enforcement and some of the weakest penalties in the country,' Mr Speakman said. 'While other states have acted to drastically increase penalties and improve enforcement, Chris Minns has been missing in action. 'Now that the federal Treasurer has ruled out changes to the federal excise, Chris Minns needs to tell people how he is going to tackle this issue.' Under law, an individual found to be selling a prohibited tobacco product faces a maximum fine of $55,000 for a first offence. Those laws will change on July 1 when a new tobacco licensing scheme is introduced, requiring businesses to obtain a tobacco retailing licence. Businesses found to be selling tobacco products without a licence will face fines of up to $220,000 and $44,000 for an individual. Nonetheless, the issue sparked a fierce debate in NSW parliament on Wednesday between Mr Speakman and Police Minister Yasmin Catley. Asked about whether anti-gang Taskforce Falcon will expand its remit to illicit tobacco, Ms Catley struck out. 'The leader of the opposition knows that it is Health that enforce illicit tobacco. He knows that,' she said. 'And, he has come in here and has the audacity to come in here and say the police are not doing their job. Well, shame on you. Shame on you. 'NSW Police are doing absolutely everything they can and I am disgusted that the leader of the opposition could come to the NSW parliament and suggest otherwise.' For his part, NSW Health Minister Ryan Park has pointed the finger at the former Coalition government for not earlier introducing a licensing scheme. What do the experts say? Over the past six years, the duty price put on a 20-pack of cigarettes has gone up by about 75 per cent – from $16 to $28. As a result, the price of a packet at the counter sits about $40-50, with the cheapest little more than $30. Illicit cigarettes, meanwhile, cost about $13-15 per 20-pack and up to $20 for premium brands. University of Sydney School of Public Health researcher Edward Jegasothy supported Mr Minns' comments on the tobacco excise. He said there was no solution to the prevalence of illicit tobacco without a re-examination of the 'punitive' policy. 'There's really no ethical basis for the policy because it's essentially just a punitive policy attack on the poor,' he said. Mr Jegasothy said the policy had failed to demonstrate any 'meaningful health benefits and certainly no equitable health benefits'. 'I can't see a solution that doesn't have involve bringing down the tax,' he said. 'It has to be part of the solution … because it is essentially putting more holes in the bottom of the boat.' Mr Jegasothy said the belief that the excise, in increasing the cost of cigarettes, would reduce rates of smoking 'didn't hold water'. With rates of smoking higher among poor and marginalised groups, he instead encouraged solutions that addressed the root causes, 'which is largely poverty'. He urged for a review of the excise as a public health policy, including up until the explosion of black market sales in the early 2020s. That explosion, Mr Jegasothy suggested, came as a result of a combination of factors, including the cumulative impact of the excise and a tightening on loose leaf tobacco. The Australian Association of Convenience Stores has also backed Mr Minns' call for a rethink of the tobacco excise. Chief executive Theo Foukkare said it was 'extraordinary that it's gotten to this point'. 'Tobacco is a price-sensitive consumer product,' he said. 'If you put a price on it that is manifestly higher than what people can afford, they'll find a cheaper alternative and that's where this incredibly dangerous black market is cashing in – and even worse, they're using that money to fund the most atrocious crimes.' What about other states? NSW is far from the only state or territory in Australia where the issue of illicit tobacco has become a hot-button topic in recent years. In Victoria, police have continuingly battled the so-called tobacco wars, conflict between organised crime groups during which stores have been burned. According to Victoria Police, there were about 1300 stand-alone tobacco stores in the state – of these, 1000 sell some kind of illicit tobacco. From July 1, business caught possessing or selling an illicit tobacco product in Victoria face fines of up to $1.7m. For an individual, that penalty is about $830,000 or 15 years in prison. Further north, Queensland Health seized more than 15.2 million illicit cigarettes worth $12.2m across the state between July 1, 2024 and February 28, 2025. Mr Jegasothy said outside of NSW and Victoria, there was little publicly available information about the prevalence of illicit tobacco.
Daily Mail
4 days ago
- Health
- Daily Mail
EXCLUSIVE Exposed: 'DIY Ozempic' sellers putting lives at risk by peddling super cheap but super dangerous self-mixing weight loss drugs in booming black market
Cheap 'Do It Yourself Ozempic' is being sold across Britain in a booming black market that puts lives at risk, a Daily Mail investigation has found. Scores of dealers based in the UK and China are using social media to openly advertise their cut-price illegal fat jabs to vulnerable people.
Daily Mail
4 days ago
- Business
- Daily Mail
Major call on cigarettes amid black market fears
The Labor government will not review a tax on Australia's cigarettes despite fears surging prices are contributing to the black market trade. Treasurer Jim Chalmers ruled out changing the tobacco excise this week after NSW Premier Chris Minns suggested a lower tax might reduce criminal trading. 'More people are giving up the darts, but more people are also doing the wrong thing (and) I'm not convinced that cutting the excise on cigarettes would mean that that would be the end of illegal activity,' Chalmers said. 'I respectfully disagree with Chris... I don't think the answer here is to make cigarettes cheaper for people, the answer here is to get better at compliance.' Earlier in the week, Minns floated the idea that the excise might be contributing to the black market trade while also failing to secure increased government revenues. 'We need to have a look at how big this excise is, how it's driving illegal tobacco sales in our community,' Minns said. 'And is it the best use of NSW Police time to be devoted to tobacco sales, when in the end the federal government's not getting the excise that they thought — they're not getting that tax that they would get from that massive increase.' He said the excise had nearly doubled in six years from $16 to $28 per pack while revenue had decreased in line with lower consumer demand. The tobacco excise reached a high of $1.40 per cigarette in March, the same month $7billion was wiped from the budget's excise projections to 2029. Many believed the high price of cigarettes in Australia - among the world's highest - would continue to push consumers towards e-cigarettes or the black market. Smoking continues to be a leading cause of death, killing more than 24,000 Australians each year according to the Australian National University. Meanwhile, the ATO estimated the value of illicit tobacco entering Australia increased from $980million to more than $6billion in the six years to 2022-23. Economist Chris Richardson said increasing the excise without appropriate enforcements amounted to an 'epic budget fail'. Following the budget figures, Health Minister Mark Butler announced a $156million investment to assist state and federal agencies in cracking down on illicit tobacco. In a statement, Chalmers acknowledged the 'significant problem of illegal tobacco' but endorsed enforcement over price measures. 'Tobacco excise is an important public health measure to encourage people to give up smoking,' Chalmers said. 'We are working with NSW and the other states and territories when it comes to the enforcement challenge with illegal tobacco.' NSW Treasurer Daniel Mookhey was undaunted by Chalmers' disapproval, saying he intended to raise the issue with his federal counterpart. 'We can't ignore the fact there's an interaction between the federal exercise and the emergence of illegal tobacco,' he said. 'The first response needs to be through Health Ministers but I'm certainly of the point that I will make the argument to the Commonwealth, to Mr Chalmers and to others as well.'
