Q: I want to ask about tobacco excise. Over the past five years, Treasury forecast that you’d raise something like $77 billion and it’s now under $50 million. Somewhat of somewhat of a public policy disaster given smoking hasn’t really shifted in rates in recent years. And you’ve got a bit of a triple disaster in a bottom line falling out of tobacco, which was once the fourth biggest revenue source. Health outcomes not shifting and the creation of a multibillion-dollar industry for organised crime. So my question is what consideration has been given to reducing tobacco excise to attack the financial incentive that is so attractive for crime gangs?

Jim Chalmers:

Look, we’d rather give tax relief to every Australian taxpayer than to provide tax relief for smoking. We don’t think that’s the best way to go about this problem that we acknowledge. There is a substantial problem in the Budget when it comes to tobacco excise. There are two ways it comes down. One is a good way and one is a bad way. The good way is more people give up the darts. We want that. The bad way is that more people avoid the tax and we’re seeing in organised crime and other ways there’s been an increase in that kind of often violent tax evasion. And so what we’ve done in the Budget, recognising and acknowledging that problem, there is a serious problem when it comes to that revenue line is to invest another $157 million in enforcement and compliance. We think that’s a better way to collect more revenue in recognition and acknowledgement of that problem.

There was $188 million in resourcing for compliance and enforcement in January of 2024. We know we’ve got a problem there. We know we’ve got to do something about it. We’re not convinced that by cutting taxes for smoking we’ll get the objective we want. We think the better way is to invest in enforcement and that’s what we’re doing.