Australian opposition proposes 80% cut to tobacco excise, health experts warn of consequences

Opposition leader Angus Taylor and Nationals leader Matt Canavan announced on Thursday a plan to cut tobacco excise by 80%, alongside moves to legalise and regulate vapes and nicotine pouches. The proposal follows a similar suggestion from One Nation leader Pauline Hanson weeks earlier, who called for a 75% cut.

Under Taylor's plan, the excise on a standard packet of 20 cigarettes would fall from about $30 to about $6. He argued the cut would undermine illicit tobacco dealers, who currently control more than half of all cigarette sales in Australia. A Coalition government would also spend $200 million on stronger law enforcement, including increased funding for the Australian Border Force and federal police.

Taylor said Parliamentary Budget Office modelling found the plan would add about $8 billion in revenue over four years, including from excise on pouches and vapes.

Criticism from health bodies and Labor

Labor has rejected the excise cut, arguing there is no clear price point that would reverse the growth of black market sales. World Health Organisation expert Benn McGrady noted that the WHO recommends governments raise tobacco taxes to reduce affordability and demand over time.

Australian Medical Association president Danielle McMullen warned the plan could undermine decades of public health work and even drive people back to smoking, pointing to Canada, where smoking rates rose, including among young people, after an excise cut there.

Labor frontbencher Tanya Plibersek said the plan "will kill people," noting that Australia's low smoking rates are largely due to high cigarette prices.

The plan is backed by economist Richard Holden, former deputy chief medical officer Nick Coatsworth and former Border Force official Rohan Pike, who wrote to Prime Minister Anthony Albanese urging him to adopt the excise cut.