Australia’s tobacco wars have become a national organised crime crisis.
Senator Matthew Canavan said The LNP had launched a major law and order policy to crush the organised crime gangs that are making billions from illegal cigarettes and vapes. The LNP’s plan will stop the firebombings, extortion, and violence within Capricornia which is helping to fund drug trafficking, scams, and money laundering.
At the centre of the LNP’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 LNP will attack the source of the problem Capricornia by taking away the extraordinary profits that organised crime are making by selling illegal tobacco and vapes.
Michelle Landry MP said this is a national law and order crisis that needs to be confronted head-on.
“Organised crime is waging a campaign on Capricornia,” Michelle Landry said.
“Gangs in Capricornia, from Rockhampton to Mackay, are profiting from illegal tobacco and vapes, while expanding their criminal empires into drug trafficking, scams and money laundering.
“Our strong plan will attack the gangs where it hurts by taking away their massive price advantage, taking away their customers, and taking away their profits.
“You don’t bring organised crime to its knees by protecting its business model. You have to destroy the business model, and that’s what the LNP’s policy will do in Capricornia.”
Senator Canavan said 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.
“The illicit market is now at eighty per cent of the tobacco market, meaning that there are hundreds of thousands of Australian smokers, those that are addicted to nicotine, who have been pushed an forced into participating in an illegal market.” Senator Canavan said.
“I don’t believe that hundreds of thousands of Australians want to do that, but in a cost of living crisis they cannot afford the legal prices for cigarettes we’re seeing and so that’s fuelling this trade.”
“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.
