Housing Minister Clare O’Neil has claimed Australia’s illegal tobacco issue is “not a tax problem” despite growing calls for a federal review of the tobacco excise.
New South Wales Health Minister Ryan Park has called for the Albanese government to review the excise amid a booming black market and alarming tobacco consumption rates.
A senior police officer has also said storage space for seized tobacco products in NSW is becoming scarce, according to The Daily Telegraph.
Appearing alongside Tasmanian Senator Claire Chandler on Channel Seven’s Sunrise, the minister was asked if the Albanese government would review the excise.
Ms O’Neil claimed the country had had “amazing success” in reducing smoking rates.
“I wouldn’t deny though that illegal tobacco is a major threat to the success that we’ve had,” she said on Wednesday morning.
Referring to the excise debate, Ms O’Neil then claimed: “This is not a tax problem, it is an enforcement problem.”
“What we need to do is lift the protections on the border to try to stop illegal tobacco coming into Australia and then work with the states to stop it being sold in corner shops around the country,” she said.
“That work is underway, we’re having a lot of success.”
Ms O’Neil said NSW Police’s reported lack of storage for tobacco products was “speaking to that success”, before reiterating she thought excise changes were “not the answer”.
“When we talk to organisations like the Cancer Council, the Australian Medical Association, they tell us that reducing tax rates on tobacco would have two big effects: It would make more Australians start smoking more often and it would give billions of dollars back to big tobacco companies around Australia,” she said.
“It’s not the answer. Better enforcement of our laws is the answer and our government’s working really hard with the states to get that moving.”
Ms Chandler agreed law enforcement had a role to play in tackling the illegal tobacco trade but said “every option needs to be on the table” for governments to look at.
“There is no question that one of the reasons it is so out of control at the moment is because that excise is too high,” she said.
“So I think governments of all levels, state and federal, need to be looking at all of the possible levers that they can potentially pull to try and get this under control.”
It comes after Australian Bureau of Statistics data released last month found national nicotine consumption increased by almost 40 per cent between 2017 and 2025.
Illicit products accounted for 80 per cent of total tobacco consumption in 2025, marking a major increase from 2017 when that figure was just 12 per cent.
The data sparked a fierce debate over the excise, with Victorian Liberal MP Mary Aldred at the time saying the current policy on tobacco had reached a “breaking point”.
“This is the financial year Australia crossed the line where tobacco excise no longer even covers the healthcare costs of smoking,” Ms Aldred said in a statement.
“That should be setting off alarm bells right across government because it shows the current model is breaking down.”
Former Australian Federal Police detective Rohan Pike labelled the ABS data “outrageous”.
“Australia had gone from ‘world leading’ to the global laughing stock of tobacco control,” he told SkyNews.com.au last month.
“We must remember who caused this total failure of policy. It is the same public health advocates that the government go to to seek the solution.
“It’s like asking the arsonist how to put out the fire. They need to apologise and move aside so we can blow up our policy and start again.”