Three Australian experts wrote to the Prime Minister on Thursday urging him to implement his opponent’s tobacco policy.
The signatories are Dr Nick Coatsworth, deputy chief medical officer through the pandemic; Richard Holden, Vice-Chancellor’s Professor of economics at UNSW; and Rohan Pike, who founded the Australian Border Force’s Tobacco Strike Team in 2015. They describe a black market that is “unique internationally” and criminal violence that “is fraying our social fabric”.
“The loss of government control of the tobacco market to organized crime directly undermines the health of Australians,”
they write, arguing that losing the market has made cigarettes more accessible, not less.
They place blame on both parties: consecutive excise increases under Labor and Coalition governments. The mechanism, they say, is simple. “The illicit tobacco market exists because it’s profitable, profitability that depends on a large differential between legal and illicit product.” From which: “This differential can only be reduced by a dramatic cut in the excise.”
The policy they are endorsing was announced by Opposition Leader Angus Taylor the same morning — cut the tobacco excise by 80 per cent, taking the tax on a pack of 20 from roughly $30 to $6, legalise and tax vapes and nicotine pouches, and fund a $200 million enforcement surge. The letter concedes the scale of the cut and defends it anyway: the 80 per cent figure “is considerable, and yet it is required”.
Australian Bureau of Statistics estimates published in June found that black market sources supplied 80 per cent of all tobacco and nicotine consumed in Australia in 2025, against 12 per cent in 2017. Legal volumes fell to under a third of their 2017 level. Legal prices almost tripled; illicit prices barely moved.
Total nicotine consumption rose almost 40 per cent between 2017 and 2025, against 14 per cent population growth. Australia did not cut nicotine use. It transferred the market to organised crime, which expanded it.
The letter’s third pillar is harm reduction: driving out the illicit trade means “encouraging our smokers to the safer option of regulated vapes thereby reducing demand for tobacco”. Vapes are currently legal only through pharmacies and pouches are banned outright, which on Pike’s estimate has pushed roughly 95 per cent of Australian vaping into criminal hands. Products that displace combustion are harder to buy legally than the cigarettes they replace. The Coalition would tax e-liquid at 50 cents per millilitre and pouches at 2.5 cents per milligram of nicotine.
Hours before the letter went out, a tobacco store on High Street in Melton was firebombed; CCTV caught one man setting his own arm alight, and a second man in his twenties was left with severe burns, fighting for life. It was one of more than 150 tobacco store fires in Victoria since March 2023. Victoria Police’s Gang Crime Squad has run over 350 raids and made at least 212 arrests. Katie Tangey, 27, died in January 2025 when arsonists hit the wrong address in Truganina.
Labor says there is no evidence a cut would end the illicit trade.
