Editor’s Note: The following is an excerpt from Select Committee on Red Tape’s report on the harmful effects of government regulations on small and medium tobacco retailers. The complete Interim Report is available here.
Committee view
2.56 Throughout the tobacco inquiry, the committee received substantial evidence of high levels of regulation that adversely affect small businesses which retail legal products. It is the committee’s view that a market operates most efficiently when there is limited regulation which has clearly identified policy objectives—such as those connected to public health. The committee recommends that all governments review their tobacco control measures and identify opportunities to refocus it and reduce the red tape burden on small retailers.
2.57 The committee heard that some tobacco control measures are not achieving, and are not likely to achieve, evidence-based public health outcomes. On the contrary, the committee heard that the regulation of tobacco retailing is preventing Australians from accessing less harmful alternatives to smoking, having the undesirable and unintended effect of encouraging criminal activity, while disproportionately affecting employees, employers and businesses that contribute to the national economy. The committee recommends that, in any review of tobacco retail regulation, non-evidence based regulation is identified and eliminated.
2.58 The committee is concerned that tobacco control measures have provided some Australians without the choice to legally purchase products that minimise personal harm. In this regard, the committee notes that the Australian Government appears to have done very little to ‘identify the most appropriate policy approach’ to alternative nicotine delivery systems (Action 6.7.5 of the NTS). Certainly, no such evidence was provided to the tobacco inquiry.
2.59 In a climate of deregulation and red tape reduction, the committee is reluctant to recommend the creation of a further regulatory framework. However, the committee accepts that there are a significant number of consumers who wish to purchase alternative nicotine delivery systems. Further, this is likely already occurring without the imprimatur of the law. The committee considers that lawful retail of such systems in a regulated environment is preferable to black market or loophole acquisition. The committee is persuaded that all governments should develop and implement an appropriate framework for alternative nicotine delivery systems.
2.60 On the periphery of retail regulation, the committee notes concerns about the drawback process for customs duty on tobacco. On the evidence received, it is not clear what the rationale is for the re-exportation requirement that Imperial Tobacco Australia indicated was expensive and unnecessary red tape. The committee recommends that the Department of Immigration and Border Protection should provide an explanation that justifies this requirement, failing which the red tape should be eliminated in a timely fashion.
2.61 The Parliamentary Joint Committee on Law Enforcement is currently inquiring into illicit tobacco.[73] The committee looks forward with interest to substantive recommendations that enable government departments and agencies to combat this trade. In the interim, the committee suggests that the Department of Health specifically note comments in this report regarding responsibility for, and enforcement of, illegal retail activity. As lead agency, the committee expects the Department of Health, assisted by the National Measurement Institute, to take a visibly more active role in enforcement activities.
2.62 With these comments in mind the committee makes the following recommendations:
Recommendation 1
2.63 The committee recommends that Commonwealth, state and territory governments review their tobacco control measures, with a view to:
- identifying opportunities to reduce the red tape burden on small retailers; and
- identifying and eliminating regulatory measures that are not evidence‑based.
Recommendation 2
2.64 The committee recommends that Commonwealth, state and territory governments develop and implement an appropriate framework for alternative nicotine delivery systems.
Recommendation 3
2.65 The committee recommends that the Department of Immigration and Border Protection provide an explanation to justify the requirement for re‑exportation of tobacco products on which drawback is claimed, failing which the requirement should be eliminated in a timely fashion.
Senator David Leyonhjelm
Chair
