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Cut taxes to end illegal tobacco? How it all adds up

11 0
30.08.2025

Australian smoking rates have never been lower. But how can the government “get real” on making duty-paid cigarettes competitive with illicits, asks Simon Chapman.

Last week respected academic and author Ross Fitzgerald wrote a piece titled Time to get real on taxing cigarettes and restricting vapes.

I scoured the piece for the key information that any Treasury official would need on how to “get real” and advise the government what sort of tax cut would do the trick and make duty-paid cigarettes competitive with illicits.

These can be bought today for as little as $8 a pack.

But all I found was Fitzgerald advising that Australia needed to “start reducing” tobacco excise. It’s that simple, apparently.

Here’s a reality check for those who think it’s just that simple, and for those who’ve been bold enough to name a reduction level.

Australian smoking rates have never been lower in adults, school kids, low socio-economic groups, and First Nations people. That’s a good thing, right?

These outcomes represent the results of decades of policy reform and government campaigns. But these bottom lines mean little to fringe critics of Australia’s approach to tobacco control, who are licking their wounds after failing badly to stop the government from regulating vapes to allow them to be sold in as many retail situations as possible.

Then there those who passionately believe that expensive, highly-taxed cigarettes are a cruel impost on low-income earners.

For years, in pitch-perfect unison with Big Tobacco – which has lobbied for decades to keep tobacco tax low to sell more cigarettes – they argue that the government should lower tobacco tax to make it easier for them to afford to smoke.

Could there be any more truly perverse way to help the poor?

Illicit tobacco has been widely available in Australia for more than 25 years, long before the significant rises in tobacco tax began in 2012.

These critics also never mention the inconvenient truth that large black markets for tobacco exist........

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