Coalition plan to cut tobacco excise by 80% ‘will kill people,’ Labor says amid public health alarm
Coalition Plan to Cut Tobacco Tax by 80%
Wanderstayfinder.com – The Coalition plan to cut tobacco excise by 80% has triggered an immediate public health crisis in Australian politics. On Thursday, Coalition leader Angus Taylor and Nationals leader Matt Canavan unveiled a package that would slash the cigarette excise levy, legalise and regulate electronic vaping devices and nicotine pouches, and direct $200 million toward a federal crackdown on illicit tobacco trade. Labor, the Australian Medical Association, and leading public health researchers responded with sharp condemnation, calling the move a reversal of decades of tobacco-control policy.
What the Package Actually Changes
Under existing rules, a standard 20-cigarette pack carries roughly $30 in excise. The proposal would compress that figure to approximately $6 per pack. Taylor's stated rationale centres on the scale of the black market: illicit dealers now account for more than half of all cigarette sales in Australia. His argument is that collapsing the price differential removes the economic incentive for smuggling. A Coalition government would pair the tax reduction with expanded funding for the Australian Border Force, federal police, and allied agencies to pursue remaining illegal operators.
Taylor cited Parliamentary Budget Office modelling projecting around $8 billion in additional revenue over four years once excise duties on newly regulated pouches and vapes are included. The announcement also follows by only a few weeks a proposal from One Nation leader Pauline Hanson calling for a 75% excise reduction, underscoring that pressure to lower tobacco taxes has been building across the right of politics.
"You don't bring organised 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."
The Public Health and Opposition Response
Benn McGrady, a World Health Organization expert on tobacco taxation, reminded the debate that WHO global guidance urges governments to raise tobacco taxes and keep prices high relative to real incomes. His explanation is direct: reduced affordability suppresses demand, which in turn lowers the disease burden.
"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. From a public health perspective, taxes should be set with the aim of continually reducing affordability and demand."
Danielle McMullen, president of the Australian Medical Association, warned that cheaper cigarettes could reverse hard-won gains in smoking reduction. She pointed to Canada, where excise cuts have coincided with rising smoking rates, particularly among younger cohorts.
"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. 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."
Within the opposition, Tanya Plibersek delivered what became the defining line of the day's coverage:
"This will kill people. We have 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. This is a dangerous product and giving in to the bikies and the organised criminal gangs from overseas is not a solution to the illegal sale of these dangerous products."
Plibersek's framing reflects a long-standing Labor position: the excise rate functions as a de facto public-health instrument, not merely a revenue line item. Cutting it, in her view, surrenders leverage over a product whose mortality profile dwarfs every other legal consumer good.
Frequently Asked Questions
How much would the excise cut reduce the price of a cigarette pack? The Coalition plan to cut tobacco excise would lower the levy component from roughly $30 to approximately $6 per 20-cigarette pack, a reduction of about 80%.
What does the package do beyond cutting the tax? It would legalise and regulate electronic vaping devices and nicotine pouches, and allocate $200 million to federal law-enforcement agencies targeting the illicit tobacco trade.
What revenue impact does the government project? Parliamentary Budget Office modelling cited by Taylor suggests the package would generate around $8 billion in additional revenue over four years once duties on newly regulated products are factored in.
What is the main public health objection? WHO guidance and Australian medical bodies argue that lower tobacco prices increase demand, particularly among young and economically disadvantaged smokers, potentially reversing decades of progress in reducing smoking rates.