In a straight-up pitch to take back Australian streets from organised crime, One Nation Leader Senator Pauline Hanson has put forward a plan to slash Australia’s tobacco excise by 75 percent and freeze indexation for three years.
The logic is simple. Make the legal product affordable again, pull customers back to the legitimate market, and cut off the cash flow that is fuelling firebombings, standover tactics and gang wars.
Targeting the Business Model
Right now a standard packet of legal cigarettes is sitting at around $46.50. Under Hanson’s proposal, that would drop to about $21 to $22 at the till.
For years, governments have kept hiking the tax. The result, Hanson argues, is that legal prices have been pushed so high they now compete directly with chop-chop and smuggled product. When crooks can sell for $15 to $20 a packet and still make a killing, every tax rise becomes a pay rise for the black market.
“People are sick of the firebombing, shootings, extortion and killings… They are sick of watching tobacco shops burn, while organised crime takes control of the market,” Senator Hanson said at the launch.
“This is not about encouraging smoking. It is about restoring the rule of law and breaking the black market.”
The Four Pillars
Hanson’s plan pairs the price reset with a law-and-order crackdown:
1. Massive Tax Reduction: Cut the current excise duty rate by 75 percent, taking it back to roughly 2015 levels. The aim is to make the corner store competitive again.
2. Three-Year Indexation Freeze: Pause the automatic twice-yearly CPI-linked tax hikes that keep pushing legal prices up, to give retailers and enforcement agencies stability.
3. Harder Enforcement: More resourcing for border interceptions, faster forced closures of illegal tobacconists and vape shops, and tougher sentences for trafficking and for the organisers behind it.
4. Follow The Money: Greater powers for police and the AFP to seize proceeds of crime, unexplained wealth, cash, cars and properties linked to illicit tobacco.
Why Now – The Numbers Behind It
The illicit trade has exploded. Industry and enforcement estimates put the black market at more than $6.4 billion, with illegal tobacco now accounting for as much as 80 percent of nicotine consumed in Australia in recent years.
At the same time, legal excise revenue has collapsed. Federal tobacco excise brought in $12.6 billion in 2022-23, but is now projected to fall to around $3.6 billion as smokers move to unregulated sellers.
For local shopkeepers doing the right thing, it has been brutal. Legitimate family-run milk bars and convenience stores are being squeezed out, while in Melbourne, Sydney and Brisbane we have seen rolling firebombings as syndicates fight over turf.
Hanson’s argument is that endless tax hikes created an artificial gold rush for organised crime. By cutting the price incentive and hitting the gangs hard at the border and in the courts, the plan aims to give small business a fair go, stop shops going up in smoke, and take back control of suburban high streets.
The proposal will now go to the floor for debate, with One Nation saying it is a common-sense reset to protect communities and bankrupt the black market.