The latest estimates put the market share for illegal tobacco sales between 25% and 65%, illicit tobacco and e-cigarette commissioner Amber Shuhyta told a Senate estimates hearing on Tuesday night.
Rising tobacco taxes have driven the average price of a pack of over-the-counter cigarettes towards $50 and incentivised criminal gangs to set up shop.
In stark contrast, a pack of black market cigarettes bypassing legal import channels can be easily found for about AU$15 (NZ$17.17).
The result is a steep decline in taxation revenue and sales for legitimate retailers.
The same has been happening in NZ. If you tax something too much, then illegal sales replace legal sales.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders
3 comments:
All happening under the party of law and order - yeah right! I remember a time when this country had an effective police force. National / ACT letting the gangs get away with it. We need a change of government now! Enough is enough!
It's all rather reminiscent of the Prohibition of the 1920s and early 1930s in the US. The infrastructure that evolved to run the illicit booze trade was then refashioned by organised crime (esp, the Mafia) to run the illicit drugs trade (initially esp. opiates). I wonder whether that is happening here too.
I predicted this ages ago.
Our politicians have learned nothing about history and are complete morons in my humble opinion.
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