Coalition unveils plan to slash tobacco tax, legalise and regulate vapes

Opposition Leader Angus Taylor on Thursday pledged to reduce the excise on a standard packet of 20 cigarettes from about $30 to just $6 if elected, declaring the dramatic price reduction would smash the thriving black market.

More than half of the tobacco consumed in Australia last year was bought illegally, with the illicit market share jumping to 80 per cent when vapes and nicotine pouches are included. A 20 pack of cigarettes typically costs between $40 and $50. With the Coalition’s proposed cut the price would drop to about $16-$26, assuming the tobacco retailers passed on the full tax reduction.

The Coalition has also vowed to legalise, regulate and tax vapes and nicotine pouches for adults. Australians aged over 18 can purchase legal vapes through pharmacies, while pouches are banned.

Modelling of the Coalition’s policy package by the Parliamentary Budget Office (PBO) found it would increase tax revenue by about $8 billion over the first four years, which is about double current forecasts. University of Sydney public health professor Becky Freeman described the policy as a “terrible idea”, because lowering the price of regulated products means the criminals can just lower their prices as well.