One Nation proposes 75% tobacco excise cut to fight illicit trade

One Nation has proposed a 75 per cent reduction in Australia's tobacco excise and a three-year freeze on indexation to combat the illicit cigarette trade. Senator Pauline Hanson argues that current high taxes have inadvertently created a multi-billion-dollar black market, with reports suggesting 80 per cent of nicotine consumption in 2025 may stem from illegal sources. The plan aims to bring the price of legal cigarettes, potentially down to approximately $22 per pack, closer to the cost of illegal products to restore the rule of law.

The proposal has faced criticism from the Greens, with leader Larissa Waters accusing the party of attempting to boost big tobacco profits under the guise of fighting crime. Meanwhile, the Labor government has maintained that law enforcement should be the priority rather than tax reductions, noting that over $365 million has been committed to combating the illicit market since early 2024.

Public sentiment in Melbourne appears to align with the concerns raised by One Nation; a RedBridge Group survey commissioned by the Australian Association of Convenience Stores found that 76 per cent of voters believe excessive federal excise encourages the illegal market, and 66 per cent believe the illicit trade has decreased city safety.