Australia has a multi-billion-dollar illegal tobacco crisis. It is no longer just a public health issue—it is an organized crime epidemic spilling onto our suburban streets.
Walk through Western Sydney, the Hunter, or regional town centres across New South Wales, and the evidence of this crisis is impossible to ignore. Firebombing’s of tobacconists, brazen daylight extortions, and drive-by shootings have become terrifyingly common. In suburban shopping strips from Parramatta to Dubbo, illicit “black-market” smoke shops operate in plain sight, selling untaxed chop-chop and unregulated vapes to anyone with cash, including school children in uniform.
Criminal gangs are making an estimated $4.1 billion to $6.9 billion in illicit tobacco profits every year. These vast sums do not vanish into thin air. They directly fund drug trafficking, scams, violence and money laundering.
In Victoria alone there have been almost 200 tobacco-related arson attacks and six murders linked to the trade. Shops have been firebombed. Businesses have been threatened. Communities have been terrorised.
We must be clear about how this happened: reckless tax hikes have created an absurd price gap between legal and illegal products. When a legitimate packet of 20 cigarettes costs $40 or more due to sky-high government excise, while a black-market packet costs just $15 at a local corner shop, government policy actively creates the profit margin that enriches organised crime.
If we want to smash these syndicates, we must destroy their business model by attacking their source of power: their profits.
That is why the Coalition will cut tobacco excise by 80 per cent, dropping the tax on a standard packet of 20 cigarettes from around $30 to $6. By drastically narrowing the price advantage enjoyed by illegal syndicates, we remove the financial incentive for smokers to buy from black-market operators and drive customers back to legitimate tax-paying retailers.
To back this up, we will invest $200 million in a nationwide law-enforcement surge. This funding will put real teeth into policing, funding operations to defeat these organised crime networks.
And this will be paid for by the extra revenue from tobacco excise collected — around $8 billion over 4 years from bringing sales out of the black market and back into the legal economy. You do not defeat organised crime by leaving its business model intact. You take away its cash flow, strip its customer base, and hunt down the ringleaders with the full force of Australian law.
Under our plan, we will also legalise, strictly regulate, and tax vapes and nicotine pouches for adults. This brings these products out of the hands of violent gangland bosses and into a tightly controlled Australian framework with severe penalties for sales to minors.
This is not about encouraging smoking. Labor’s current policy has already failed on health, with tobacco consumption in Australia is up about 30% since the end of 2021.
The Labor government’s current approach has failed on both public health and community safety.
The Coalition’s plan will crush the gangs, destroy their black-market business model, and restore safety to NSW communities