New South Wales Premier Chris Minns has broken ranks with the federal Labor government, criticizing its tax policy on tobacco and calling for a significant rethink of the excise.
Minns stated that the "massive" excise on legal cigarettes is inadvertently fueling a burgeoning black market, making enforcement efforts feel like an uphill battle. "It feels sometimes like we're standing on a beach trying to stop the tide from coming in," Minns told ABC Radio. He believes the current excise, which adds approximately $30 to a standard 20-pack of cigarettes, is simply too high and has led to a policy that is "not working."
The Australian Bureau of Statistics reported that in 2025, an estimated 80 percent of all tobacco consumed in Australia was illicit, a stark increase from 12 percent in 2017. This proliferation of the black market has raised concerns beyond lost tax revenue and public health.
Federal Assistant Minister for Customs Julian Hill has maintained that the government's approach focuses on law enforcement, citing increased seizures of cigarettes and vapes at the border and domestically. However, Rohan Pike, a former officer with the Australian Federal Police and Australian Border Force, argued that these seizure numbers are a distraction and represent only a fraction of the illicit product in circulation.
"There is no shortage of illicit product on the ground. Seizure numbers are a distraction from the core problem, which is the policy," Pike stated at the National Press Club in Canberra. He pointed to Sweden, which has the world's lowest smoking rate, with an excise rate of approximately $6 per pack compared to Australia's $30, as evidence that lower excise is effective.
Liberal MP Mary Aldred, chair of the coalition's Anti-Illicit Tobacco Taskforce, echoed these concerns, noting that communities in her regional Victorian electorate of Monash have experienced an increase in firebombings and organized crime linked to the illicit trade. She described the situation as potentially "the greatest public policy failing in a generation" and called for an "honest national conversation."
Public health expert Nick Coatsworth suggested a harm minimization approach, comparing it to the implementation of safe injecting rooms for opioid users. He proposed allowing access to less harmful alternatives like regulated vapes and nicotine pouches for individuals addicted to nicotine. "No one seriously sits there and says that safe injecting rooms are safe," Coatsworth said, "They are safer than injecting with a dirty needle in the back of a squat, where no one's going to find you if you OD and resuscitate you."
Despite Minns' public stance, his federal counterparts have consistently refused to lower the tobacco excise, maintaining their focus on enforcement measures.