Coalition plan to hit 'gangs where it hurts' would slash tobacco tax and legalise vapes

Tobacco tax would be cut by as much as 80 per cent under a new Coalition plan unveiled on Wednesday.

Opposition leader Angus Taylor has outlined his plan to reduce the tax paid on purchases of cigarettes and tobacco products in an effort to reduce the lucrative nature of the illicit market.

The plan would also legalise the sale of nicotine vaping devices and nicotine pouches, which are currently restricted.

Opposition treasury spokesperson Tim Wilson said the plan will increase federal revenue while reducing cash flow to organised crime.

"It'll increase government revenue by about $2 billion a year because it will stop people buying products from the black market and will lead to them buying it in the real market," Wilson told ABC Radio National.

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He argued that Labor was too focused on law enforcement while One Nation — who announced their policy of a 75 per cent reduction in tobacco duty — was too focused on cutting tax alone.

"We actually get the outcome Australians want, which is to break illegal tobacco trade, stop fuelling the fire bombings of stores ... and make sure we raise revenue to deliver a better health outcome," he said.

The Coalition has said its 80 per cent reduction plan will be backed by a $200 million nationwide crackdown on the illegal tobacco trade, which it says earns criminal gangs between $4.1 billion and $6.9 billion in profit each year.

A $60 million, three-year "public awareness and education campaign" would also be conducted to warn Australians of the dangers of smoking.

Labor Assistant Treasurer Daniel Mulino has previously rejected such a plan, arguing there is no evidence to show cutting taxes would eliminate the illegal trade.

Public health authorities have long advocated for raising tobacco duty in an effort to price consumers out of the market. They have consistently warned that cutting taxes will reverse decades of decline in national smoking rates.

Laura Hunter, CEO of the Australian Council on Smoking and Health, previously told SBS News making cigarettes cheaper would have "huge ramifications for the health of Australians".

"Australia now has the lowest smoking rates that we've ever recorded, and that's the result of decades of policies that are designed to make cigarettes less affordable, less available in the community, and less normalised," she said.