Former national medical adviser Nick Coatsworth proposed cutting tobacco taxes during a Senate inquiry in Canberra on Sunday [1].

The proposal seeks to balance public health goals with the unintended consequences of high pricing, specifically the growth of organized crime and illegal markets.

Coatsworth said the government should return tobacco excise rates to 2019 levels [2]. Under the current tax structure, a packet of cigarettes costs more than $50 [2]. The proposed rollback would lower that price to about $30 [2].

During the hearing, Coatsworth said that high tobacco taxes have contributed to increased criminal activity linked to illicit tobacco sales [1]. The argument suggests that when legal prices reach a certain threshold, consumers shift toward black markets, which in turn fuels criminal enterprises [1].

The proposal comes as lawmakers examine the effectiveness of excise taxes in reducing smoking rates versus their role in creating economic incentives for smuggling. By reducing the price gap between legal and illegal cigarettes, the proposal aims to diminish the profit margins for illicit traders [2].

This move represents a significant departure from traditional public health strategies that rely on steep price increases to discourage smoking. The Senate inquiry will evaluate whether the reduction in illicit trade outweighs the potential risk of increased smoking rates among the general population [1].

“return tobacco excise rates to 2019 levels”

This proposal highlights a growing tension between health policy and law enforcement. While high taxes are a proven tool for reducing smoking rates, they can create a 'price ceiling' that triggers a surge in the black market. If the Senate adopts this approach, it would signal a shift toward prioritizing the disruption of criminal networks over the maximum possible price-driven deterrent for tobacco use.