One Nation Proposes 75% Tobacco Tax Cut to Fight Crime

One Nation leader Pauline Hanson proposed reducing cigarette excise taxes by 75% and freezing price indexation for three years to combat Australia's illicit tobacco trade. The plan aims to lower the cost of a legal packet of 20 cigarettes from approximately $46.50 to $21 or $22, effectively undercutting organized crime gangs. Hanson argues that current Labor government policies have failed, citing estimates that illicit sources supplied 80% of nicotine consumed in 2025.

To complement the tax cuts, One Nation proposes stronger border enforcement, tougher penalties for traffickers, and the aggressive seizure of criminal assets. The proposal received support from One Nation MP Barnaby Joyce, Nationals leader Matt Canavan, and illicit trade expert Rohan Pike, who warned that criminals could seize the entire market within a year. The urgency of the issue is highlighted by over 200 arson attacks against tobacconists in Victoria over the last three years.

Federal Labor officials have rejected the economic approach. Treasurer Jim Chalmers stated the government's focus remains on law and order and policing, while Health Minister Mark Butler argued that governments do not typically engage in price competition with organized crime. However, some state-level leaders, including NSW Premier Chris Minns and the Tasmanian Liberal government, have expressed support for reviewing or lowering the tax. The proposal also aligns with submissions from Philip Morris Limited and British American Tobacco Australia.