One Nation leader Pauline Hanson announced a proposal Tuesday to reduce the tobacco excise by 50%, which would bring the price of a cigarette pack to approximately $22. The plan also includes a three-year freeze on excise indexation and a significant crackdown on illegal tobacco operations.
Hanson stated that the current tobacco excise system has been ineffective, contributing to a surge in the black market and allowing criminal gangs to profit. She cited violence, including firebombing and shootings, as consequences of the illicit trade, particularly in Victoria, where authorities are reportedly confronting organized syndicates involved in illegal cigarette sales. According to Victoria Police, there have been 193 tobacco-related arsons and six homicides linked to the trade, with some victims killed in attacks on the wrong homes.
According to One Nation, repeated increases in tobacco taxes have made legal cigarettes unaffordable for many consumers, driving them toward cheaper black-market alternatives. Hanson claimed that illicit sources accounted for 80% of nicotine consumed in 2025, and total consumption rose by nearly 40% between 2017 and 2025. She noted that the excise on a packet of 20 cigarettes is currently about $30.60 and is scheduled for further increase. The party estimates that the proposed excise cut could reduce the price of a pack from about $46.50 to $21 or $22, making legal tobacco competitive with illicit packs, which are estimated to cost between $12 and $25.
Hanson asserted that the government has lost billions in revenue due to the shift to illicit products, with excise revenue dropping from an estimated $12.6 billion in 2022-23 to $4.1 billion in 2025-26 and a projected $3.6 billion this financial year. She criticized the government for losing both revenue and control over the black market.
One Nation's plan would be supported by enhanced border controls, expedited closure of shops selling illicit tobacco, stricter penalties for traffickers and organizers, and a more aggressive approach to seizing unexplained wealth. "The cut will be matched with stronger border enforcement, faster shop closures, tougher penalties for traffickers and attack organisers, and aggressive seizure of criminal assets and unexplained wealth," Hanson said.
Hanson dismissed concerns that the policy would encourage smoking, stating that the objective is to re-establish government control over the market and dismantle the black market. "This is not about encouraging smoking. It is about restoring the rule of law and breaking the black market. Labor handed this market to organised crime. One Nation will take it back," she said.
However, Treasurer Jim Chalmers rejected any reduction in tobacco excise. He stated that the government would continue to invest in enforcement efforts and has committed an additional $350 million to assist law enforcement and border authorities in targeting illegal tobacco operations. "We actually have seen some busts in recent times," Chalmers said, acknowledging the ongoing challenge. The government's focus will remain on compliance and enforcement measures.