Leading public health experts, the Australian Medical Association, and Labor have rejected the Coalition's plan to cut tobacco excise by 80%, labeling the move as a backward step in tobacco control. The announcement, made by opposition leader Angus Taylor and Nationals leader Matt Canavan, aims to curb soaring illegal cigarette sales, but critics argue it will increase smoking rates and undermine decades of public health progress.
Coalition's proposal to slash tobacco excise
Taylor and Canavan announced plans for an 80% cut to excise, alongside moves to legalize and regulate vapes and nicotine pouches. This follows a proposal by One Nation leader Pauline Hanson for a 75% cut. The opposition leader said the excise reduction would lower the cost of a standard packet of 20 cigarettes from about $30 to about $6, arguing it would undermine illicit tobacco dealers who currently control more than half of all sales in Australia.
The Coalition has also pledged $200 million for a law enforcement push against illicit sales, with increased funding for the Australian Border Force, federal police, and other agencies. Taylor stated, "You don't bring organized crime to its knees by protecting its business model. You have to destroy the business model, and that's what the Coalition's policy will do."
Parliamentary Budget Office modeling and revenue projections
Taylor cited Parliamentary Budget Office modeling, which suggests the plan would add approximately $8 billion in revenue to the budget over four years, including from excise on pouches and vapes. However, Labor has resisted calls to cut the excise rate, arguing there is no clear price point that would reverse the boom in black market sales.
World Health Organisation expert Benn McGrady emphasized that the WHO recommends governments raise taxes on tobacco products and prices relative to real incomes to reduce affordability over time. "Tobacco taxes are arguably the most effective measure to reduce demand for tobacco products and have played a key role globally in reducing smoking rates," he said. "From a public health perspective, taxes should be set with the aim of continually reducing affordability and demand."
Public health experts and AMA raise alarm
Australian Medical Association president Danielle McMullen warned that the Coalition's plan would undermine Australia's world-leading public health efforts and could drive more Australians back to smoking. "Making cigarettes more affordable is not the answer to tackling the illicit tobacco trade and would undermine Australia's world leading public health efforts to reduce smoking," she said.
McMullen cited examples such as Canada, where smoking rates increased, particularly among young people, after excise cuts. "Lower cigarette prices would likely increase smoking rates, particularly among price-sensitive groups such as young people and people experiencing socioeconomic disadvantage, widening health inequities."
Labor's strong opposition and support from some quarters
Labor frontbencher Tanya Plibersek said the Coalition's plan "will kill people." She highlighted that Australia has some of the lowest smoking rates in the world because cigarettes are expensive. "Tobacco is the only legal product that regularly kills two thirds of its regular users. If cars killed as many people as tobacco, people would be outraged about the road toll," she added.
Despite the opposition, the Coalition's plan has received support from economist Richard Holden, former deputy chief medical officer Nick Coatsworth, and former Border Force official Rohan Pike, who has advised nicotine industry-linked organizations. The trio wrote to Prime Minister Anthony Albanese on Thursday, urging him to adopt the excise cut and warning that increased accessibility of illegal cigarettes had undermined tobacco control strategies.
They argued, "The illicit market can only be driven out of the country by using overwhelming economic force, by further enhancing law enforcement, and by encouraging our smokers to the safer option of regulated vapes thereby reducing demand for tobacco."
