Tobacco taxes have created a massive violent black market complete with fire bombings, shootings, and now with added Iranian terrorism.

In exactly the same way that the prohibition of alcohol in the United States in the early 1900s created Al Capone and the rise of gangsters, so too has the punitive taxation of tobacco in Australia today given rise to a new generation of hyperviolent organized crime and now yes, even connections to terrorism.

So, given that that’s the reality, what is the government doing about this rampant illegal tobacco trade which is already worth over $10 billion with enormous profit margins? By the way, profit margins that are only made possible by the fact that we have a $2,158 per kilogram tobacco tax on legal tobacco in this country. Well, what are they doing? Ah, they’re going to increase tobacco taxes by another 5% on the 1st of September, ensuring that organized criminal smuggling operations have greater incentives than ever before and will continue to take almost any risks necessary and engage in whatever violence necessary to keep their untaxed tobacco flowing into Australia and then to protect their turf against criminal competitors.

But more than that, the government has introduced a new very expensive and very cumbersome licensing system for legal tobacco retailers. You know, the ones who are dealing in the legal taxed tobacco because adding more paperwork to the already registered and licensed legal tobacco retailers is going to fix the illegal tobacco problem, right?

The government says that they like to fight against organized crime.

But in practice, the government are the reason why these organized crime gangs exist in the first place. And if you just look at the economics of it at a practical level, the government is the one that creates the protection racket for the cartels to operate in by destroying the legal competition and artificially manufacturing extraordinary profit margins for anyone willing to go around the taxes.

My name’s Topher Field. This is the Topher Project and I help busy people like you to make sense of the nonsense and to see the world as it really is. I am 100% viewer supported. So, if you appreciate this kind of no-nonsense reporting in Australia, then please consider buying me a coffee via the button at topherfield.net and check out my books, DVDs, and merch at goodpeoplebreakbadlaws.com.

Now, it’s not often that I give credit to the mainstream media, much less the ABC, but credit where it is due. The ABC published this blunt and honest assessment of the unfolding tobacco tax disaster, which was written by Alan Kohler. Australia’s illegal tobacco problem has made the proverbial transition from tragedy to farce. Illicit excise-evading cigarettes now comprise half of the cancer-inducing products sold to Australia’s 2.7 million smokers. A study produced by FTI Consulting put it at 39.4% in 2024, up from 14% six years ago, but an update for the month of June puts the figure at 50%. And according to studies of wastewater, nicotine consumption in Australia, including vaping, is at an all-time high.

We can now conclude that the strategy of taxing and banning nicotine addiction out of existence is a complete failure. This is actually a really good article and well worth reading. He goes into a lot more detail. I’ll put the link to this article in the description of this video. Allan goes on to talk about the hundreds of fire bombings and robberies and lootings that have taken place and that according to wastewater studies, tobacco consumption in Australia is up and not down and that tobacco excise revenue has collapsed by more than half from its peak of more than $16 billion in tax revenue in 2019 to less than $8 billion projected for next year  despite, as I said, the fact that tobacco consumption has actually increased.

If you were looking for a policy that perfectly embodied government failure, this tobacco excise policy is it. But in classic government style, they’re not learning from their failure. They’re doubling down on it. The tobacco tax is about to increase yet again in just a few days’ time, which will inevitably push even more people towards the untaxed products on the black market, but also legal tobacco retailers are suddenly being required to apply for one-year licenses at a cost of $1,100 per license.

Now, keep in mind that each individual storefront requires its own license, and every website needs its own separate license as well.

So, if you sell tobacco online and in a physical store, you’ll need to get two licenses, and that’s $2,200. Thank you very much. Oh, and you’ll need to reapply and pay every year. Worse, they brought this scheme in with very little notice. They forced retailers to apply for these new licenses immediately just to get permission to keep trading under their old licenses while their application for the new license was considered. And they’ve been very clear that there’s no guarantee that just because you already have an old license, you’ll be granted one of these new ones.

The whole thing’s a mess. But forget the mismanagement and the stupidity of how they’re implementing these new licenses. Let’s just take a step back and ask ourselves: why? Why do we need new licenses for the legal tobacco shops? How does yet another license and fee for these already licensed legal retailers help to stop the fire bombings, the street killings, and the $10 billion-a-year illegal imports?

This is about the government looking like they’re doing something. There is simply no logical connection between the problem of illegal tobacco smuggling and this supposed solution of another license for legal retailers. Now, maybe you don’t care. You’re not a smoker and you couldn’t give a rats about people who are fine. But you should care that the government is now the number one cause of tobacco-related violence and organized crime in this country. And that’s not according to me. Even the New South Wales Premier Chris Minns said that this is a government failure just a few months ago.

[From video]

Here’s something you probably thought the Premier would never say: Cigarettes should be cheaper. He’s not encouraging smoking, but he is fed up battling the boom in illegal tobacco. Chris Minns says as it stands, police are being taken off major investigations to crack down on tobacco crime. On the state’s shopping strips, it’s a boom industry. Tobacco retailers rapidly multiplying. The current situation is intolerable. A number of high street premises being taken over by tobacco firms as police are forced to crack down on the illegal tobacco trade. Criminal networks bringing into Australia cheap tobacco products.

I mean, we are where we are because we have the most expensive cigarettes in the world. The Premier blaming a 385% rise in the federal tobacco excise. The massive increase has exploded the illicit tobacco marketplace. A legal pack of 20 cigarettes can cost up to $55. Illegal as low as 10. Health New South Wales inspectors conduct raids to combat illicit sales. 20 compliance officers across New South Wales for 20,000 stores. It is like shooting a water pistol at a tidal wave. Without an excise rethink, the Premier warns police attention could be diverted from other crimes like domestic violence. Has he raised it with CRA? Doing it right now.

The federal treasurer says the excise is there to encourage people to give up smoking. Ahead of the state budget, the Premier says illegal tobacco is a strain on police and on health resources. He says they should go to running hospitals, not criminal investigation. A parliamentary inquiry will consider which government agency should lead the fight. [End video]

Did you get that? The federal treasurer says this is about getting people to give up smoking. Well, then it’s not working because the numbers say that people are increasing their smoking whilst government excise revenue is falling. And according to the New South Wales government, there’s all kinds of enforcement costs as state police are taken away from, frankly, much more important work.

None of this is a secret or a surprise. Everyone knows that report that you just watched is nearly 3 months old now. New South Wales Premier Chris Minns said what he said nearly 3 months ago. And yet it is his New South Wales state government which is leading the charge on these useless new licenses for legal tobacco retailers. And the federal government are still proceeding with their tobacco tax increases regardless of knowing that it’s not working.

Australia has become a gangster’s paradise. Exactly as I predicted would happen back in 2016 in this video about the then-future of the tobacco excise. That video now talks about the past. And yes, we are exactly where I said we were going to be. Let’s take stock. Smoking levels are rising again. Tax revenue is dropping, not increasing. And violent organized crime is off the charts. Why would politicians allow such a state of affairs to continue? There is not a single upside here. Why would they do that?

Well, because there is an upside. Politicians don’t benefit from fixing problems. They benefit from promising to fix problems.

And that means that they need there to be problems for them to promise to fix. Australian politics makes much more sense once you realize that their goal is rarely to make things better. It’s to make things bigger. And the best excuse for making things bigger is to be able to say that what we’re already doing, well, it’s not enough. Notice they never say we did the wrong thing and we’re going to stop doing the wrong thing now. And they never say we’re going to try something different. No, no. They say we’re doing the right thing. We just need to do it more.

The wave of violent crime that has been created by our government and the insane tobacco taxes isn’t a problem with the tobacco taxes as far as the government is concerned. It’s a feature of the tobacco taxes. And although New South Wales Premier Chris Minns did tell the truth a few months ago, nothing has changed. Not in New South Wales and not federally either. If you are a politician, failure is your friend. That is the perverse incentive of politics at work.

And the only way to change that perverse incentive is for us, the voting public, to stop believing politicians when they make their promises that they are going to fix something. And anytime anyone ever says to you that the government should fix anything, send them this video. Send them the link and ask them this question: If the government can so clearly see that everything about this situation is wrong, they’re losing tax revenue, more people are smoking more often, and they’ve created a multi-billion-dollar organized crime global smuggling empire. And the government knows how to fix this problem by either eliminating or dramatically reducing tobacco taxes but chooses not to fix this on purpose. Then why would anyone ever believe that the government actually wants to fix or will fix anything else?

My name’s Topher Field. This is the Topher Project, and I help busy people like you to make sense of the nonsense that surrounds us in our media and from our politicians. I am 100% viewer supported. So please, if you appreciate what I do, buy me a coffee via the button at topherfield.net. And if you like my videos, then you’re going to love my books: Good People Break Bad Laws, all about the role of civil disobedience in the modern age. Good Christians Break Bad Laws, all about obeying God in a fallen world. Then there’s my DVD and my merch. And all of it is available at goodpeoplebreakbadlaws.com. And everything you buy will be helping me to keep doing what I do here at the Topher Project.

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