Opposition Leader Angus Taylor has accused the Albanese government of driving everyday Australians into the black market following a sharp decline in federal tobacco tax revenues. The critique came after Treasurer Jim Chalmers released the Final Budget Outcome for 2025–26, which revealed that tobacco excise revenue fell $200 million short of budget forecasts, totaling $3.93 billion.
Speaking to reporters, Taylor stated that the current fiscal policy has backfired by making legal tobacco unaffordable for average citizens while fueling organized criminal enterprises.
“Australians want to stay with the law, but when you’ve got a price of cigarettes at $50 a pack for legal and $15 or less for illegal, you’re pushing law-abiding Australians into the illegal market,” Taylor said. “If you bring the legal price down close to the illegal price, people want to stay within the law.”
Escalating Excise Rates vs. Collapsing State Revenue
Following the latest tax increase on September 1, Australia’s tobacco excise reached $1.55 per cigarette. The excise alone adds approximately $31.05 to a standard pack of 20, pushing retail prices to between $40 and $60 per pack.
| Financial Year | Tobacco Excise Revenue | Status / Projection |
|---|---|---|
| 2019–20 | $16.3 billion | Historical peak |
| 2024–25 | ~$8.0 billion | Sharp drop |
| 2025–26 | $3.93 billion | Missed target ($4.13B forecast) |
| 2030 (Forecast) | ~$2.0 billion | Projected baseline |
Shifting Consumption Patterns Across Australia
Data from the Australian Institute of Health and Welfare (AIHW) and the Australian Bureau of Statistics (ABS) show daily smoking fell from 8.3% in 2022–23 to 5.6% in 2025. Total nicotine consumption increased across alternative formats:
- Vaping: Daily e-cigarette use rose to 3.6% in 2025.
- Oral Nicotine Pouches: Adoption climbed to 1.8% of the adult population.
- Snus: Usage doubled to 0.8% over the same period.
With criminal syndicates controlling an estimated 80% of illicit distribution, Taylor called for tax adjustments to restore price parity and curb the reach of unregulated operators.
- High Tobacco Taxes Drive Australians to Illicit Market, Coalition Warns - September 29, 2026
- Trump Urged to Ban Chinese Vapes and Reform FDA Rules - September 27, 2026
- US FDA Prepares Faster Approvals for Vapes and Nicotine Pouches - September 24, 2026