Key facts
- The Coalition proposed an 80% cut to tobacco excise, reducing the price of a standard packet of 20 cigarettes from approximately $30 to $6.
- The plan also includes legalising and regulating vapes and nicotine pouches.
- Labor and leading public health experts, including the Australian Medical Association, have strongly opposed the proposal.
- The Coalition argues the excise cut would undermine illicit tobacco dealers, who currently control over half of the Australian market.
- Parliamentary Budget Office modelling suggests the plan could add approximately $8 billion in revenue over four years.
- Public health advocates cite WHO recommendations to increase tobacco taxes to reduce demand and improve health outcomes.
The Coalition, led by Angus Taylor and Matt Canavan, has proposed an 80% cut to tobacco excise, aiming to reduce soaring illegal cigarette sales and legalise vapes and nicotine pouches. This move has been met with strong opposition from Labor, public health experts, and the Australian Medical Association, who argue it would undermine decades of public health efforts and potentially increase smoking rates.
Taylor stated that the policy would destroy the business model of organised crime involved in illicit tobacco sales and that Parliamentary Budget Office modelling projects an additional $8 billion in government revenue over four years from excise on tobacco, pouches, and vapes. He emphasized that combating organised crime requires destroying its business model, not protecting it.
However, public health advocates, including Benn McGrady from the World Health Organisation, advocate for increasing tobacco taxes to reduce affordability and demand, citing this as the most effective measure to lower smoking rates and the burden of disease. Danielle McMullen, President of the Australian Medical Association, warned that making cigarettes more affordable would reverse progress and cited Canada's experience of increased smoking rates after excise cuts, particularly among young and socioeconomically disadvantaged individuals.
Labor frontbencher Tanya Plibersek echoed these concerns, stating the plan "will kill people" and that yielding to criminal gangs is not a solution. She highlighted Australia's low smoking rates, attributed to high prices, and compared the danger of tobacco to cars. The Coalition's proposal received support from economist Richard Holden, former deputy chief medical officer Nick Coatsworth, and former Border Force official Rohan Pike, who urged the Prime Minister to adopt the excise cut and enhance law enforcement, alongside promoting regulated vapes as a safer alternative.