NSW Premier Chris Minns has backed a proposal to significantly reduce the tobacco excise tax to combat the illicit cigarette trade.
The move marks a rare alignment between the state leader and One Nation, suggesting that current federal tax levels may be counterproductive to public safety. By lowering the cost of legal cigarettes, proponents argue the government can dismantle the financial incentives driving organized crime.
Minns said the current excise level is ineffective and fuels a black-market industry. He said "the excise isn’t working" as a tool for regulation [2]. The proposal he supports originates from Pauline Hanson of One Nation, who called for a 75% [1] cut to the tobacco tax and a freeze on any price indexation for three years [1].
Critics of the current tax structure argue that high prices have created a lucrative environment for smugglers. Chris Kenny of Sky News Australia said the current excise level is "ridiculous" and highlighted how it has fostered a black-market industry [4].
While One Nation pushes for a 75% reduction, other political factions are considering even deeper cuts. The Coalition is reportedly eyeing an 80% [3] tobacco tax cut, appearing to move beyond the One Nation proposal [3].
The debate centers on whether the health benefits of high taxes, intended to discourage smoking, are outweighed by the rise of criminal enterprises. Minns said that the priority should shift toward curbing the crime wave associated with the illicit trade of tobacco products [2].
“"The excise isn’t working."”
This policy shift represents a pivot from using taxation as a primary public health tool to using it as a law-enforcement tool. By prioritizing the disruption of the illicit market over the goal of reducing smoking rates through price hikes, the NSW government is signaling that the social cost of organized crime has surpassed the perceived benefit of high tobacco excise.
