Australia’s tobacco wars have become a national organised crime crisis.

Mr Chaffey said The Nationals had launched a major law and order policy to crush the organised crime gangs that are making billions from illegal cigarettes and vapes.

Mr Chaffey and The Nationals’ plan will stop the firebombings, extortion, and violence which is helping to fund drug trafficking, scams, and money laundering.

At the centre of the Coalition’s plan will be an 80 per cent cut to tobacco excise, and the legalisation, regulation, and taxation of vapes and nicotine pouches for adults, backed by a $200 million nationwide law enforcement surge to shut illegal shops, intercept illegal tobacco, and dismantle the criminal networks behind the trade.

The Coalition will attack the source of the problem by taking away the extraordinary profits that organised crime are making by selling illegal tobacco and vapes.

Mr Chaffey said this is a national law and order crisis that needs to be confronted head-on.

“You don’t bring organised crime to its knees by protecting its business model,” Mr Chaffey said. “You have to destroy the business model, and that’s what the Coalition’s policy will do in the Parkes electorate.

“Tobacco consumption has gone up around 30 per cent since the end of 2021 while taxes have kept rising, clearly showing that the Government’s current approach has failed.

“Australians are getting the worst of all worlds: tobacco consumption is up, criminals are controlling most of the market, and taxpayers are losing billions in revenue.

“Labor has allowed a criminal industry to thrive on our streets. We will take back control. We will shut it down.”

The Government estimates organised crime groups are making between $4.1 billion and $6.9 billion in profit from illicit tobacco, money that is simply ploughed back into trafficking, scams and money laundering.

Under the Coalition’s plan:

• Tobacco excise will be cut by 80 per cent, slashing the excise on a standard packet of 20 cigarettes from around $30 to around $6, dramatically reducing the price advantage enjoyed by the black market. The rate will be reviewed after two years with a view to ensuring the illegal market cannot rebuild.
• A $200 million nationwide law enforcement surge will back more raids, arrests, seizures, and investigations to shut illegal shops, intercept illegal tobacco at the border and dismantle the criminal networks behind the trade. Border Force, the AFP, the Australian Criminal Intelligence Commission and AUSTRAC will be given stronger marching orders to target the gangs, their supply chains and their money.
• Vapes and nicotine pouches will be legalised, regulated, and taxed for adults, replacing Labor’s failed pharmacy-only vape model and total ban on nicotine pouches with a regulated legal market while maintaining strong protections for children. Vapes will attract a low rate of excise of 50c per mL of e-liquid, while nicotine pouches will attract equivalent excise of 2.5 cents per milligram of nicotine.
• A $60 million, three-year national public awareness and education campaign will expose the organised crime behind illegal tobacco and vapes and warn Australians where the money from illegal products ends up and the dangers of smoking.

 

Background:

Destroy the Gangs’ Profit Margin:

Currently, a legal packet of cigarettes costs around $50, with more than $30 of that coming from tobacco excise, while illegal packets can sell for just $15 to $20.

Our excise reduction plan will be reviewed after two years, with the excise maintained at a level that keeps the black market from rebuilding, whilst maintaining a viable legal and taxed tobacco market.

The immediate objective is to remove the huge price gap that has made Australia one of the most lucrative markets in the world for illegal tobacco.

That will make it much harder for criminals to undercut legal retailers and start bringing billions of dollars in tobacco sales back from the shadows.

The Australian Bureau of Statistics (ABS) found prices for legal tobacco products have almost tripled since 2016, largely because of excise increases, while estimated prices for illegal tobacco have remained relatively stable.

The result has been a massive shift from legal shops into the black market.

In 2017, illicit tobacco accounted for around 10 per cent of consumption. By 2025, ABS estimates put the illicit share at around 80 per cent.

An 80 per cent excise cut will reduce the excise in a standard 20-pack from around $30 to just over $6.

Bring Vapes and Nicotine Pouches Out of the Black Market:

Labor’s approach to vapes has failed just as badly.

Vapes may technically be restricted, but they are readily available illegally in shops across Australia.

The Government has said 95.7 per cent of e-cigarettes sold in Australia are illegal, with the illegal vape market worth around $1.6 billion.

The ABS estimates that since the government effectively banned vapes in 2024, vape consumption has risen by around 140 per cent.

The Coalition will replace Labor’s failed pharmacy-only vape model and ban on nicotine pouches with a legal and regulated market for adults, including sales through non-pharmacy retailers.

Nicotine vapes will be taxed at 50 cents per mL of e-liquid and subject to GST, while nicotine oral pouches will also be legalised and taxed at 2.5 cents per milligram of nicotine.