Australia’s image of the carefree larrikin down at the pub having a smoke after work is now a falsehood simply because it’s the world’s most expensive place to have a good time without resorting to the black market.
An easygoing Paul Hogan with a 20-pack of Winfield cigarettes, from those late 1970s colour TV ads, is certainly a relic from the distant past with Melbourne the most expensive place to have a puff and a pint, a German Deutsche Bank Research Institute study of 69 global cities by research analysts Jim Reid and Galina Pozdnyakova found.
The $US111.20 cost — working out at $159 in Australian dollars — makes a pub visit a luxury, courtesy of prohibitive excise taxes, which have seen the cost of a smoke and beers soar by 89 per cent during the past decade.
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Sydney was regarded as the world’s second most expensive place to enjoy some unhealthy habits, followed by Auckland and Wellington in New Zealand, with the Australian Government levying a $1.53 excise for every tobacco stick and $63.75 for every litre of pure alcohol, working out at $1.74 for a typical full-strength pint of beer.
A smoke and a beer in a big Australian city costs almost three-quarters more than the equivalent of $US63.90 ($A91.55) in London, itself the fifth most expensive city in the world for a fag and an ale.
Australia was no longer such a larrikin nation, AMP chief economist Shane Oliver said.
“That’s what we were in the 60s and 70s, but in the subsequent decades, a bit more of a nanny state, if you like, and that’s led to excessive regulation and excessive taxes on things that we don’t like,” he told The Nightly.
Most expensive cities for groceries, renting and movies. Credit: The Nightly
“There’s no doubt there are health issues associated with tobacco and there’s an argument to tax it to cover those costs that otherwise non-smokers would have to bear but in some cases we go beyond.”
Australia’s exorbitantly high taxes on cigarettes are also fuelling a black-market trade in illicit tobacco, with Treasury expecting just $3.6 billion in tobacco excise revenue in 2026-27, down from a peak of $17.2 billion in 2019-20, following downward revisions to revenue in the past three Budgets despite higher excise.
Independent economist Saul Eslake highlighted the Laffer Curve effect of a higher tax leading to a diminished tax collection.
“A growing proportion of the very small proportion of Australians who do smoke are choosing to purchase illicit tobacco products,” he said.
“Retailers of illicit tobacco are doing it in plain sight.”
Former economics lecturer and NSW mid-north coast Libertarian Party councillor Mark Hornshaw challenged the idea that Australia was ever an easygoing nation.
“I think the larrikin nation was always a myth. We are a nation of compliant serfs. Our stories and songs are about failed and futile resistance to authority,” he said.
Getting to a pub on public transport is also a costlier exercise in Australia with Sydney the world’s second most expensive city after London for monthly fares, with Melbourne in fourth place.
Somewhere to live
But when it comes to having shelter, Melbourne is a lot more affordable than Sydney by global standards, with Mr Eslake blaming stricter zoning and planning rules in NSW, making real estate even more expensive in its capital city hemmed in by national parks and waterways.
“Development is both harder to do, because the planning and zoning laws are tougher, and the charges on developers are higher is it’s harder to make building an apartment commercially viable,” he said.
“If you have policies which restrict supply, or make it more expensive to supply, then you’re going to get less housing relative to the demand for it.”
Most expensive cities for cigarettes, beer, public transport and eating out. Credit: The Nightly
Renting a three-bedroom apartment in the city centre, near all the entertainment, is a particularly elite choice in Sydney, the world’s ninth most expensive place, while Melbourne was in the 23rd spot.
When it came to salaries after tax, Australia did relatively well with Melbourne in 11th place and Sydney in 14th position.
But after rent was factored in for average-income earners, Sydney did badly, falling to 29th place for the salary buying power of a working couple with a lease on a three-bedroom apartment, while Melbourne did better in ninth place.
Buying a unit in the city is another financial challenge with Sydney the 16th most expensive place in the world per square metre, where $1.1 million is the mid-point price for an apartment.
Melbourne was in 40th spot, in a city where units typically cost less than $500,000, following a post-COVID investor tax.
Grocery shopping is also unpleasant in Australia with Melbourne the 11th most expensive city for essentials, followed by Sydney at No. 12, putting them both ahead of Luxembourg, Copenhagen and Paris.
Living in Australia comes at a premium for those wanting to go out, with Sydney and Melbourne both ranked 12th when it came to seeing a movie.
Staying home to be entertained is also relatively costly with Melbourne and Sydney and in 14th and 15th places for monthly internet of at least 60 megabits per second.
