A $24 billion hole will be blown in the federal budget in the coming years, and a decent chunk of that is linked to the ongoing tobacco wars in Victoria.
The ongoing production and importation of black market tobacco into Australia has taken a huge bite out of the excise collected by the government.
Tonight’s budget revealed tobacco excise receipts have been downgraded by $6.9 billion in the five years from 2024-25 to 2028-29.
The tax receipt estimates for 2024-2025 compared to the last major economic outlook (MYEFO) shows a drop by about $1.3 billion – a staggering change in just three months.
It’s a 15.4 per cent drop – compared to a $30 million (1.1 per cent) increase for beer – and a huge chunk of that $1.3 billion is linked to the booming black market for tobacco.
As a result, the government has also allocated in tonight’s budget $156.7 million across two years from 2025-26 to crack down on the illicit tobacco trade.
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The budget also forecast a $1.9 billion decrease in company tax from 2024-25 to 2028-29, due to weaker expected profits for non-mining entities.
The new personal income tax cuts as well as other measures unveiled in tonight’s budget will see a $259.1 million decrease in receipts this year, and $15.1 billion from 2024-25 to 2028-29.
