New tobacco tax will push a packet of cigarettes to $35

Australian smokers will face another price hike on Friday, with one packet of 25 pre-rolled cigarettes to exceed $35.

Tax on other tobacco products will increase by 17 per cent, bringing the cost of a kilo of tobacco from $771.60 to $901.39.

Liberal Democrats leader David Leyonhjelm has slammed the increase as a ‘price hike that will make poor, addicted smokers worse off’.

GST is also imposed on the cigarettes and tobacco, in addition to the soon-to-be 69 per cent excise, which Mr Leyonhjelm has labelled ‘a tax on a tax’.

Smokers are now paying 69 per cent in tax for a packet of cigarettes, with a kilo of tobacco now costing more than $900

The NSW Senator on Friday said smokers are now repaying at least 17 times the additional cost burden they place on the government-funded health system.

The Deutsche Bank’s 2017 Mapping the World’s prices report showed Australia now has the highest prices in the world for cigarettes, closely followed by New Zealand. 

Mr Leyonhjelm claimed the continually rising cost of cigarettes was creating a ‘booming black market’. 

‘The extortionate taxation of tobacco, combined with the ban on e‑cigarettes and plain packaging rules, have generated a booming black market in untaxed, unregulated tobacco run by organised crime,’ he said. 

 The NSW Senator claims smokers are now repaying at least 17 times the additional financial burden they put on the health system

Mr Leyonhjelm says the steady increase in pricing is creating a ‘booming black market’

Last month, police seized 14million illegally imported cigarettes from a Melbourne factory. The bust uncovered a tobacco stash with a street value of $9million.

At the time, the Superintendent of Investigations in Victoria, Craig Palmer, said the Australian Border Force has seized more than 400 tonnes of tobacco since its establishment.

He said tobacco smuggling was being monitored because of its link to organised crime and its cost to taxpayers.