One Nation leader Pauline Hanson has put forward a proposal to cut Australia’s tobacco excise duty by 50 percent, aiming to reduce the price of a cigarette pack to approximately $22. Announced on Tuesday, the plan also includes a three-year freeze on excise indexation and a significant crackdown on illegal tobacco operations. Hanson contends that the current tobacco excise system has been ineffective, leading to a surge in the black market and empowering criminal syndicates.
Addressing the Illicit Tobacco Trade
Senator Hanson highlighted the escalating violence and intimidation associated with the illegal tobacco trade, citing incidents such as firebombing, shootings, extortion, and killings. She stated that the public is weary of these criminal activities and the growing control organized crime has over the market. Data presented by Victoria Police indicates a disturbing trend, with 193 tobacco-related arsons and six homicides directly linked to the illicit trade. Hanson emphasized that these are not victimless crimes, pointing to instances where innocent individuals have been harmed or killed as a result of arson attacks on the wrong properties.
One Nation argues that successive increases in tobacco taxes have rendered legal cigarettes unaffordable for many consumers, consequently driving them towards cheaper, illicit alternatives. Hanson asserted that the current government’s policy is failing, referencing estimates suggesting that illicit sources accounted for 80 percent of nicotine consumption in 2025. Furthermore, the party claims that total tobacco consumption has risen by nearly 40 percent between 2017 and 2025.
Economic and Revenue Implications
According to Hanson, the current excise on a packet of 20 cigarettes is around $30.60, with further increases scheduled. She believes the government is losing billions of dollars in potential revenue as smokers increasingly turn to illegal products. One Nation’s figures indicate a dramatic drop in excise revenue, from an estimated $12.6 billion in 2022-23 to projected figures of $4.1 billion for 2025-26 and $3.6 billion for the current financial year. Hanson criticized the government’s budget predictions regarding tobacco excise as consistently inaccurate, suggesting a loss of both revenue and control over the black market.
The party estimates that their proposed 50 percent excise cut, if fully passed on to consumers, could reduce the price of a pack currently costing around $46.50 to approximately $21 or $22. This price point, they argue, would make legal tobacco more competitive with illicit packs, which evidence from a Senate inquiry suggests are sold for between $12 and $25. By making legal tobacco more affordable, One Nation aims to significantly erode the substantial profit margins enjoyed by criminal gangs involved in the illegal trade.
One Nation’s Proposed Enforcement Measures
To support the proposed excise reduction and combat the black market, One Nation plans to implement a multi-faceted enforcement strategy. This would include strengthening border controls, expediting the closure of premises found selling illicit tobacco, imposing harsher penalties on traffickers and organizers of illegal operations, and aggressively pursuing the seizure of criminal assets and unexplained wealth. Hanson stated that the excise cut would be accompanied by these robust measures to ensure the government regains control of the market.
Hanson rejected the notion that her proposal would encourage smoking. Instead, she framed the policy as a necessary step to restore government authority over the tobacco market and dismantle the illicit trade. She argued that the current government has allowed organized crime to establish a multibillion-dollar market by repeatedly increasing taxes without effectively addressing the black market. “This is not about encouraging smoking. It is about restoring the rule of law and breaking the black market. Labor handed this market to organised crime. One Nation will take it back,” Hanson declared.
Government Response
In response to Hanson’s announcement, Treasurer Jim Chalmers firmly ruled out any reduction in tobacco excise. Chalmers reiterated the government’s commitment to combating the growing illicit tobacco market through continued investment in enforcement efforts. He noted that the Albanese government has allocated an additional $350 million to support law enforcement and border authorities in their operations against illegal tobacco activities.
Chalmers acknowledged the significant challenge posed by the illicit trade but expressed confidence in the ongoing efforts of police and authorities. “We actually have seen some busts in recent times,” Chalmers commented, thanking the agencies involved. He emphasized that the government’s focus remains on compliance and enforcement measures to tackle the issue effectively.
