One Nation has escalated its tobacco tax position, proposing a 75 percent cut to the excise and a pause on indexation. Pauline Hanson told news.com.au the policy would take a pack of cigarettes from around $46.50 to about $22, a price last seen in Australia around 2015.
It is a significant move from the position the party put forward in June, when it proposed halving the excise. The doubling of the ask reflects how far the numbers underneath the debate have shifted in two months.
The revenue argument
Hanson’s case rests on collapsing collections rather than health policy. Excise on a packet of 20 now sits at approximately $30.60 and is scheduled to rise again in September. She put excise revenue at $12.6 billion in 2022 to 2023, falling to roughly $3.6 billion this financial year, and argued that every budget forecast on tobacco has been wrong.
Australian Bureau of Statistics estimates support the direction of travel. Illicit sources supplied around 80 percent of the nicotine consumed in Australia, while total consumption rose by almost 40 percent between 2017 and 2025. The Illicit Tobacco and E-cigarette Commissioner’s office has put excise and duty evasion at up to $11.8 billion in the 2024 to 2025 financial year.
The price gap the policy targets
Evidence to the Senate inquiry into the illegal tobacco crisis put illicit packs at roughly $12 to $25. Against a legal pack near $46.50, that is the margin the black market is working with.
A cut to $22 would put legal product inside that band for the first time in a decade. That is the mechanism One Nation is arguing for: not enforcement against supply, but removing the price incentive that created the demand.
The violence attached to the trade
Hanson pointed to Victoria Police figures of 193 tobacco related arsons and six homicides linked to the trade, including deaths of people whose homes were attacked in error.
The proposed cut is packaged with enforcement measures rather than offered instead of them: stronger border enforcement, faster shop closures, tougher penalties for traffickers, action against organisers, and seizure of criminal assets and unexplained wealth.
The federal position
The Commonwealth has not moved. Treasurer Jim Chalmers has said cutting tobacco taxes will not stop illegal activity in a market that developed over a longer period, pointing instead to hundreds of millions of dollars in additional compliance funding. Assistant Minister for Customs Julian Hill has said an excise reduction does not stand up to scrutiny, and the Illicit Tobacco and E-cigarette Commissioner has said she does not believe a lower rate would shift market dynamics.
The pressure to reconsider is no longer confined to the crossbench. NSW Premier Chris Minns has called for a cut, describing customers choosing between a $17 or $20 illegal pack and a $60 legal one. Liberal MP Mary Aldred has said the price point is driving otherwise law abiding people towards organised crime.
What happens next
The Senate Legal and Constitutional Affairs References Committee inquiry into the illegal tobacco crisis carried a reporting date of 13 August. Its findings, and the scheduled September indexation rise, are the next two points where the position could move. A minor party proposal does not change the excise, but it does set the terms of an argument the government has so far declined to have.
For independent operators
Legal tobacco margin and the foot traffic that comes with it are directly exposed to where this lands. Sites carrying licensed stock are competing with product priced at less than half theirs, while facing the compliance and enforcement burden that comes with selling the legal version. Nothing changes in the short term, and the September indexation rise still applies, so pricing and stock decisions should be made on the current settings rather than on a proposal.