The Coalition Says The Current System Is Feeding The Black Market
Federal opposition leader Angus Taylor has outlined a sweeping overhaul of Australia’s tobacco policy, proposing an 80% reduction in excise duties if the Coalition wins the next election. The central premise of this strategy is that current tax levels have created a dangerous disparity between legal and illegal products, effectively subsidising organised crime.
Taylor argues that excessively high prices are no longer merely acting as a deterrent to smoking; instead, they are driving consumers toward illicit supply networks. This shift has resulted in a surge of black-market cigarettes, known locally as ‘chop-chop’ tobacco, which fuels violent disputes among criminal gangs operating outside the law.
Excise Would Fall From About $30 To $6 A Pack
The financial mechanics of the proposal involve a drastic cut to the tax component on a standard 20-pack of cigarettes.
This represents a reduction of about $24 in the tax burden for every pack purchased.
Vapes And Nicotine Pouches Would Also Be Regulated
The policy extends beyond traditional cigarettes to include a regulatory framework for vaping products and nicotine pouches intended for adult consumers. Proponents of this approach suggest that strict prohibitions have inadvertently fostered another underground market where unregulated goods are widely available.
By legalising and taxing these items, the Coalition aims to bring sales back into the formal economy while granting governments greater oversight. This dual strategy seeks to close loopholes that currently allow criminal networks to profit from restricted nicotine products.
A $200 Million Enforcement Crackdown Is Also Proposed
The tax reduction is not being presented as a standalone measure but as part of a broader enforcement package. The Coalition has allocated around $200 million specifically for a national crackdown targeting organised criminal networks involved in the illicit tobacco trade.
This combination is designed to attack the black market from two angles: making legal tobacco more competitive while simultaneously increasing pressure on illegal suppliers through increased policing and awareness.
Coalition Claims The Plan Could Increase Revenue
Whether this behavioural change occurs on the scale required remains one of the central debates surrounding the policy’s viability.
Labor And Public Health Groups Are Likely To Push Back
Australia has historically relied on high tobacco taxes, plain packaging, and advertising restrictions to reduce smoking rates, with recent data showing daily smoking rates continuing to decline.
The Coalition counters that falling legal sales figures do not tell the whole story if a growing proportion of smokers are simply purchasing untaxed tobacco instead. Public health advocates, however, warn that reversing current tax structures risks undoing significant progress made in reducing smoking prevalence across the nation.
One Nation Has Already Pushed A Similar Argument
The Coalition’s move introduces a new political dimension to the national tobacco debate, echoing arguments previously made by One Nation. That party has long advocated for a large reduction in tobacco excise, contending that the government’s current approach has directly contributed to the growth of the illegal market.
With the Coalition now proposing an 80% reduction, tobacco taxation is poised to become a much larger issue in federal politics.
The Real Test Will Be Whether The Black Market Shrinks
This scenario makes the proposal more than a simple tax-cut debate; it serves as a critical test of whether Australia’s high-price tobacco strategy has reached its limit or if lowering taxes risks reversing decades of public health progress.