Illegal tobacco’s $65b budget hit
The illicit tobacco boom is draining billions from the budget, fuelling organised crime and exposing the limits of Labor’s enforcement-first approach.
Walk into almost any tobacconist in a major city and illegal cigarettes are sold openly — sometimes for $10 a pack — apparently without fear of consequences.
The health implications of Australia’s booming illegal nicotine trade are obvious. But for the federal government, a political reality is also coming into view.
A month out from a budget Prime Minister Anthony Albanese has framed as his most important yet, the government is staring at a growing black hole. As it scrambles for revenue, the illicit tobacco boom is set to suck $65 billion from the federal budget by the end of the decade.
That collapse in excise revenue amounts to roughly eight times the money set aside for Albanese’s “historic” Medicare investment, unveiled during last year’s election campaign, which aims to make nine in 10 GP visits free by 2030.
