Tobacco laws a 'Christmas present' for crime networks

Increases to taxes on cigarettes and tobacco products should be immediately paused and ultimately reduced to throttle the illicit trade, a coalition-led senate inquiry urges.

The final report into illegal tobacco in Australia has called for stronger efforts to prevent the sale and distribution of illicit cigarettes and the slashing of the tobacco excise after further consultation.

It also recommended laws similar to New Zealand to establish the legalised sale of regulated nicotine vapes and other products.

Tobacco taxes were a key focus of the inquiry with some witnesses advocating for a return to 2019 levels or a cut of about 40 per cent.

The excise adds about $1.50 to the cost of every cigarette and nearly $2500 per kilogram of tobacco content, according to the Australian Tax Office, with another indexation increase in a matter of days.

Inquiry chair and Liberal senator Leah Blyth said the once successful national tobacco control strategy is facing a breaking point.

"In this new context, Australia's suite of tobacco control measures must be urgently re-evaluated to make them fit for purpose," Senator Blyth said in the report.

But Labor has dismissed the report and the inquiry as a "stunt" by the Liberals.

"This was not a serious attempt by the coalition to engage with the issue," Labor senators Jana Stewart and Dorinda Cox said.

They said the illicit tobacco trade was a serious issue "already exploding" when the Liberals lost office in 2022, and noted donations the opposition had received from the tobacco industry.

"The coalition's goal is to benefit Big Tobacco and those with a vested interest in flogging more nicotine to Australians."

An estimated 80 per cent of all tobacco consumed in 2025 was illicit, up from 12 per cent in 2017, according to the Australian Bureau of Statistics.

The Labor senators referred to disputed data from the Australian Institute of Health and Welfare which shows smoking rates are falling.

But they did not mention ABS data that shows that the quantity of nicotine consumed in Australia increased by almost 40 per cent in eight years.