Carrington Clarke

Now, economic modelling is notoriously difficult.

We will see how this plays out.

We can't control for all variables, particularly at a time like now when there is so much uncertainty about the global economy.

But that is the argument the government is putting forward about why these changes are going to be positive.

And speaking of how hard it is to model economically, one of the kind of side stories I thought was interesting in this budget paper was the collapse of the tobacco excise.

So we know that they had a fuel excise cut that was on purpose because prices were going up.

But we are seeing the excise take, the tax take from tobacco, from cigarettes,

collapsing.

And that is primarily because we've seen such a huge rise in the purchasing of illegal cigarettes, black market cigarettes, which don't have the tax being added to them.

And not only has there been a massive hit to revenue in this particular financial year collapsing, but actually it is going to continue to fall in future.

Now, obviously there's

part of the reason the excise was as high as it was, was to try to incentivise people to stop smoking.

But that is not the reason why we're seeing the collapse in the way we are, or it isn't the big reason.

So they're now expecting by 2029, the tobacco excise will only generate about $2.1 billion.

That's about 75% less than the $7.8 billion it collected in 24-25.

This is actually creating a major black hole for the government.

Fascinating.

Steph, always a pleasure.

Hopefully next time we'll be in the same room for the next episode of ABC Business Daily.

And we will be back with another episode of ABC Business Daily tomorrow.