Essays on Australian Housing Market - Cigarette Tax Assignment

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The paper "Australian Housing Market - Cigarette Tax " is a perfect example of a micro and macroeconomic assignment.   In the article written by Ashley Hall, the main issue presented is the taxation hike in the cigarette prices that caused a widespread uproar from tobacconists and smokers. The taxation was confirmed by Prime Minister Kevin Rudd who stated an additional 25 per cent resulting in increased prices by $2.16 per pack of 30 cigarettes. He also added that the government has implemented an anti-smoking campaign that had issued a crackdown on internet advertisements on smoking.

The reason behind this government decision was to reduce the number of smokers which would result in a drop in tobacco purchases by the public. Another reason for the increment on tobacco was to enable smokers to utilize their finances on the basic necessities rather than funding their smoking habits. The government aimed at reducing the overall tobacco consumption by approximated 6% resulting in a drop of 87,000 smokers. These drastic changes solicited a negative response from the tobacconists who criticized the government to move by reiterating that it was nearly impossible to alter the changes within the limited allocated time.

The sales and operations manager at the Freechoice franchise opinionated it was physically impossible to get ready by midnight. They critiqued the move by stating that it was a futile attempt as the changes were irrational and too drastic considering the time to implement the changes. The action also created retailers and customer scramble where the customers made more purchases of tobacco packets as compared to the prior times. The retailers as said to be willing to buy out the stocks of tobacco supply shops which would results in great profit margins after the implementation of the taxes Question 2 The major stakeholders affected by the tax increase were the Charity societies and the tobacco franchises.

The franchises were negatively impacted as the move was drastic and nearly impossible to set up measures that would counteract the tax increase. The move which was aimed at smashing the tobacco business also disorganized and was met by dismay from different tobacco franchises who wanted more time to develop and organize new pricing strategies to counteract the increased taxes.  

Bibliography

Joye, Christopher (2014).Property prices headed for the record high. Financial Review.28 March 2014, n.p

Hall, Ashley (April 30, 2010). “Cigarette tax hike sparks panic buying”, ABC news.

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