Coalition plan to cut tobacco excise by 80% ‘will kill people,’ Labor says amid public health alarm

Angus Taylor and Matt Canavan claim drastic cut to price of cigarettes and moves to legalise vapes will combat illicit tobacco trade

Leading public health experts, the Australian Medical Association and Labor have rejected Angus Taylor’s plan to cut tobacco excise by 80%, labelling the move to curb soaring illegal cigarette sales as a backward step on tobacco control.

Taylor and Nationals leader Matt Canavan on Thursday announced plans for an 80% cut to excise, as well as moves to legalise and regulate vapes and nicotine pouches. The announcement comes weeks after One Nation leader Pauline Hanson proposed a 75% cut.

The opposition leader said the cut would reduce the excise on a standard packet of 20 cigarettes from about $30 to about $6, arguing it would undermine illicit tobacco dealers, who currently control more than half of all sales in Australia.

A Coalition government would spend $200 million on a law enforcement push against illicit sales, with increased funding for the Australian Border Force, federal police and other agencies.

“You don’t bring organised crime to its knees by protecting its business model,” Taylor said. “You have to destroy the business model, and that’s what the Coalition’s policy will do.”

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

Labor has resisted calls to cut the excise rate, arguing there is no clear price point which would reverse the boom in black market sales.

World Health Organisation expert Benn McGrady said WHO recommends governments around the world raise taxes on tobacco products, and prices relative to real incomes, to ensure affordability is reduced over time. Reduced affordability reduces demand, lowering the burden of disease.

“Tobacco taxes are arguably the most effective measure to reduce demand for tobacco products and have played a key role globally in reducing smoking rates,” he said.

“From a public health perspective, taxes should be set with the aim of continually reducing affordability and demand.

“The global experience shows that strong tax administration and law enforcement are important components of tobacco taxation. These require a continued commitment from government and are the most important factor in ensuring compliance.”

Australian Medical Association president Danielle McMullen said the Coalition’s plan would undermine decades of public health efforts and even drive more Australians back to smoking.

“Making cigarettes more affordable is not the answer to tackling the illicit tobacco trade and would undermine Australia’s world leading public health efforts to reduce smoking,” McMullen said.