Coalition pledges 80% tobacco tax cut and legalised vapes

Angus Taylor has promised an 80 per cent cut in Australia’s tobacco excise, arguing that cheaper legal cigarettes would undermine the illicit market. Under the Coalition’s proposal, the tax on a standard pack of 20 cigarettes would fall from about A$30 to A$6.

The plan would also legalise, regulate and tax vapes and nicotine pouches for adults. Vapes would carry a low excise rate of 50 cents per millilitre of e-liquid, while nicotine pouches would be taxed at 2.5 cents per milligram of nicotine. Australians over 18 can currently buy legal vapes through pharmacies, but pouches are banned.

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Organised crime is waging a campaign of economic terrorism on Australians.

The Coalition says illegal tobacco accounted for more than half of tobacco consumed in Australia last year. Including vapes and nicotine pouches, it puts the illicit market’s share at 80 per cent. Its package includes a A$60 million, three-year public awareness campaign and A$200 million for a nationwide law enforcement surge, including raids, arrests, border seizures and the closure of illegal tobacco shops.

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Labor has allowed a criminal industry to thrive on our streets. We will shut it down.

Taylor said the policy would remove the profits that organised crime makes from illicit tobacco and vapes. “Organised crime is waging a campaign of economic terrorism on Australians,” he said. “Labor has allowed a criminal industry to thrive on our streets. We will shut it down.”

Public health authorities have warned that a sharp tax cut could reverse efforts to reduce smoking. Labor says there is no evidence that such a reduction would end the illicit trade. Modelling by the Parliamentary Budget Office estimated that the Coalition’s package would increase tax revenue by about A$8 billion over its first four years, roughly twice current forecasts.

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worst of all worlds