A tripling in the licence fee charged to tobacco sellers is a “ridiculously high” impost on businesses selling cigarettes, a Launceston service station owner says.
Owner of Charles St Caltex Mal Philpot said his business would reconsider selling cigarettes ahead of the fee hike.
In a bid to tackle high smoking rates, the state government is increasing tobacco selling licence fees from $366 this year to $731 in 2017 and $1100 the following year.
The measure is estimated to raise $1.8 million over four years, funding a social media quit campaign and more education and compliance officers.
Mr Philpot said he was shocked at the amount.
“I’ll have to have a big think about what we’re making with cigarettes, which is not much to start with, and whether we’ll renew our licence next year,” he said.
The business made a couple of hundred dollars each month in cigarette sales profit.
“It’s hard enough to make money now, and they’re trying to make it harder.”
He said both supermarkets and smaller operators would pay the same fee.
Health Minister Michael Ferguson said the fee was based on a partial cost recovery model, as the government subsidised a portion of costs of administering the licensing system.
“It is generally accepted that businesses in a regulated industry should pay for the cost of that regulation.
“The proposed licence fee increases will allow an increase in compliance activities and introduction of an online licensing system to make the process of applying for a licence more efficient.”
The fee hike would be difficult for small tobacco sellers such as lunch bars, corner stores and independent service stations, tobacconist Free Choice owner Kevin Wade said.
“If you want to sell tobacco, your first six months’ sales is probably wiped out in your costs,” he said.
However larger tobacconists like Free Choice and TSG, and supermarkets would be able to absorb the hike cost, Mr Wade said.
Smaller operators could either pass costs onto customers or stop selling cigarettes, he said.
Charles St Newsagency co-owner John Collier said his business would have to find an extra $800 a year to cover the licence fee.
However the business would still be able to keep selling cigarettes.
“It comes out of our bottom line.”
Extracted from The Australian.