Driving smokers into the arms of criminals - the consequences of the Australian Government's annual tobacco excise policy

[JohnS]

Below is a concise article from the Australian (yes, the newspaper that Rupert Murdoch founded in the 1960s and the only Australian daily newspaper distributed nationally) which details the consequences of the Australian Government's excessive push to drive up taxes on tobacco (especially in the last fifteen years) and how this has led to an unpalatable black market situation.

Have a read of it the next time you have the spare time to light up a cigar and reflect on perhaps what your country's government is doing in relation to this matter.

Driving smokers into the arms of criminals

By Sourced Externally - July 12, 2025

I smoked a cigar in a bar in Tunis. This simple act is illegal in my more enlightened homeland, so it felt, well, evil. Under Australia’s virtue caliphate, no sin is more original than second-hand smoke.

At home, even seeing an uncovered cigarette or cigar in public is deemed unconscionable.

The tobacco in shops is burka’d behind cases lest a passing kiddie be perverted by a glimpse of the come-hither black-and-white check of an unveiled Cohiba tube or the slut-red skirt of a Marlboro packet.

Of course, that couldn’t actually happen because the weed is already encased in a medieval fortress of government deterrents that begins with uniform baby-poo green packaging. This is stamped with a modern memento mori: Smoking Kills, paired with a spectacle of the scaffold, as the smoker is dared to cross a threshold festooned with corpses and diseased organs.

Dante would have struggled to conjure more disturbing visions than those that await the sinner on the other side of the cardboard gates of hell.

The final line of offence is now inside the keep: each individual fag is inscribed with its own warning. This feels like overkill. After all, the sad sod who already has forked out at least $1.25 in sin tax for each one – and torn their way past a photo of a tracheotomy – isn’t likely to see this last rebuke as sufficient cause to repent. But you never know.

Don’t misunderstand: people shouldn’t be allowed to smoke in most restaurants, bars, hotels or just about every other public space. They should be consigned to stand forever next to the outside dunnies where they first learned the filthy habit.

Smoking is dirty and smelly and it interferes with the lives of the vast majority, who should be allowed to enjoy a smoke-free world.

But here’s the thing: if you can have a medically supervised injecting room in Sydney, surely we can have one speak-easy in the same city where consenting adults can huddle over a whiskey and a durry inside in winter.

And, as a bonus, the bar staff don’t have to be highly trained paramedics equipped with naloxone and oxygen tanks to revive overenthusiastic customers.

Let’s just note that you can mainline heroin in Sydney’s injecting room, but you can’t smoke. Because smoking is bad for you. And injecting heroin into your jugular vein is … ? I should note that, since its inception in 2001, the injecting room has managed more than 11,500 overdoses without a single death occurring on the premises. I pledge my smoking speak-easy will have fewer than one overdose a day.

In 2004, I reported on the ACT government outlawing cigarette vending machines in Canberra. All agreed this was a good thing.

The next year, the same government set up its first syringe vending machines as part of its “harm minimisation” approach to drug use.

This policy traces its history back to the Hawke government’s 1985 drug summit and largely drives the drug programs of most jurisdictions. It accepts that people will engage in risky habits – such as drug use – and aims to reduce the negative consequences rather than eliminate the behaviour entirely. It is a logic that is hard to deny.

In 2023, the ACT decriminalised the possession of small amounts of illicit drugs as part of the territory’s harm minimisation approach. This includes that harmless party drug, methamphetamine. But I assume people still buy these drugs from criminals, since it remains illegal to sell them. This encourages a criminal trade that does enormous harm, delivers huge profits for bad people and generates zero tax revenue.

Smokers pay tax. Lots of it. The excise on cigarettes rises twice a year, every year, and will continue until the end of time because smoking is evil. From September 2023 to September 2025, politicians imposed an extra 5 per cent annual increase on top of the regular indexation, just to underline the point.

This impost has been remarkably successful on several fronts. First, as intended, it has cut the number of people who smoke. This is an unalloyed good. Second, it has raised bucketloads of cash from those who refuse to be economically coerced into good health.

To put this in perspective: this year’s federal budget shows petrol excise is expected to raise $7.2bn from the large population of people who own cars. Tobacco excise will raise $7.4bn from the much smaller population of smokers.

This is good for the Treasurer but less good for the mostly poor cohort of smokers, a disproportionate number of whom are Indigenous. So it seems a touch regressive.

Third is the deeper, unintended story the budget papers tell. In December 2024, the Treasury anticipated tobacco excise would raise $8.7bn, but that figure collapsed by 15.4 per cent – more than $1.3bn – in the three months to March. This is not because a whole lot of people stopped smoking. It is because the now draconian tax has spawned a thriving industry for organised crime.

It is estimated the Australian government is losing about $5bn a year in tax revenue because of the illicit tobacco market.

In Victoria, there have been more than 125 arson attacks linked to illicit tobacco turf wars since March 2023. Incidents include firebombings of tobacco retailers and convenience stores, often as part of extortion campaigns by rival gangs.

NSW reports similar patterns of violence, including shootings and arson attacks, as crime families and outlaw motorcycle gangs vie for control of the lucrative black market.

A wise government might use this knowledge to ponder whether the ever-rising tobacco excise has outlived its usefulness. But that will never happen because politicians and an industry of health advocates believe in harm minimisation for every drug except tobacco. So the federal budget has set aside $156m to crack down on the criminal trade it single-handedly created.

The loud message from the Hawke government’s drug offensive – and the premise on which harm minimisation is built – is that prohibition doesn’t work. We are now in the process of proving it again. By making tobacco prohibitively expensive we are driving addicts into the arms of criminals.

As the smoke from my mildly taxed, mid-tier cigar rose towards the ceiling fan in Tunis, I reached for my neat whiskey and contemplated all my homeland does to keep me safe from myself and ensure I live a good life. I also Googled: “How hard is it to grow tobacco and make your own cigars in a cold climate?”

Turns out it’s hard. It is also a federal offence to grow a single tobacco plant in any part of Australia without a rarely granted excise licence. But I am allowed to grow two marijuana plants in my Canberra backyard. Fair cop, because smoking tobacco can give you cancer, while smoking marijuana merely increases your chances of schizophrenia and slowly wrecks your lungs.

Somewhere in all this there’s a logic, but it vanishes as quickly as a smoke ring in the draft of a ceiling fan.

Source: https://www.theaustralian.com.au/commentary/driving-smokers-into-the-arms-of-criminals/news-story/738dc3124bee7365db8d0fa87b28ac33

[amberleaf]

Similar things happening in the UK as successive governments squeeze smokers ever harder but at least some in Australia are realising the futility of such policies. A recent BBC article explored the world of the illicit tobacco trade but totally ignored the root cause.. that taxes are just too high.

[MrBirdman]

The article seconds as a subtle endorsement of Australia’s safe injection site programs - sounds pretty successful.

To me it’s not actually the best counter for tobacco taxes, because the government isn’t actually encouraging people to use IV drugs. But gambling? Governments love gambling, love it enough that they’re basically the only non-dedicated public place you can still smoke indoors here in Pennsylvania! And admittedly it’s partly a reflection of public sentiment. I know parents (even family) who’ve helped their teen set up a sports betting account. Nobody cares. But buy them cigars to celebrate winning a ball game and you’ll have CPS knocking on your door. 

Total government hypocrisy - and the motive is the same: money. Tobacco companies (and smokers) are just far easier targets, although some of that is on cigarette manufacturers for perpetrating the most notorious corporate crime in history during the 20th century. 

Why is Rupert Murdoch so much better at effecting horrible changes than good ones? Put some of those extra tobacco tax dollars to studying that. 

[BoliDan]

Been an issue for Aus for awhile now, yeah? I remember seeing some about the government needing to find illegal tobacco farms by the Australian mob and destroying them many years ago 

Basically the same as prohibition. Make something easily cheaper, black markets arise.

[Fuzz]

I remember around 2008 when the idea of plain packaging was being thrown around. I was working for one of our 2 largest supermarket chains doing special projects for the Liquor division, and we all thought this was a terrible idea. Yeah, sales were going to go down, but more than that this would lead to a huge black market trade. Everyone saw it, but as usual, the Govt of the time ignored it stating that it would only be marginal.

The Vic Cancer Council claim:

Myth

Plain packaging will make cigarettes easier to counterfeit and will increase the trade in illicit tobacco products such as “chop chop”

Fact

There is no evidence that plain packaging will lead to an increase in illicit trade in tobacco products. Tobacco industry claims about the amount of illicit tobacco purchased in Australia have been found to be exaggerated and misleading. The plain packaging legislation will allow tobacco companies to continue to use anti-counterfeit markings on their products.

And yet the Australia Border Force (ABF) report in 2023/24 that there were over 50k detections of illicit tobacco, approx. 1.8 billion cigarettes and over 400 tonnes of loose leaf tobacco, equating to AUD3 billion in lost duty. The ABF raided a rural Victorian property that was growing 16tonnes of illegal tobacco, worth approx AUD35 million in duty. 

And this barely scratches the surface.

[LordAnubis]

Yep. I don’t know anyone buying cigars from legit sources in Aus anymore. Everyone’s buying from secondary market. 

[ha_banos]

2 hours ago, LordAnubis said:

Yep. I don’t know anyone buying cigars from legit sources in Aus anymore. Everyone’s buying from secondary market. 

So you've fixed all your tobacco problems then! What's next!?

[Puros Y Vino]

21 hours ago, BoliDan said:

Been an issue for Aus for awhile now, yeah? I remember seeing some about the government needing to find illegal tobacco farms by the Australian mob and destroying them many years ago 

Basically the same as prohibition. Make something easily cheaper, black markets arise.

What legal tobacco farms that exist here (Ontario, Canada) are subject to frequent fly overs to scan if the farmer is going beyond what was licensed to grow.