Budget 2017: Cheap cigarettes up in smoke

Sophie Elsworth. Herald Sun, Melbourne

SMOKERS using roll-your own tobacco are to be hit by higher costs. The government is adjusting the tax on RYO tobacco so the cost falls in line with manufactured cigarettes. The changes will affect the per-kilogram excise and excise-equivalent Customs duty rates of RYO tobacco, pushing up the cost of each rollie.

RYO tobacco has been regarded as a cheaper option for smokers but now the tax on all tobacco will be similar. The average cost of a 50g pack of loose-leaf tobacco is about $62.

The increases will be phased in from this year until 2020 to coincide with the already implemented 12.5 per
cent tobacco annual tax increases, which the Turnbull Government announced last year over a four-year period
beginning this year. The rises will take effect on September 1 each year. The new measure is tipped to generate $360 million over four years, which will include a $35 million component paid to the states and territories.