How Australia's War on Smokers Has Backfired Spectacularly
Illegal tobacco is draining approximately $4 billion from Australia’s economy, with soaring tobacco taxes widely blamed for pushing the trade underground and fuelling related violence. Recent findings from the Australian Criminal Intelligence Commission and the Australian Institute of Criminology reveal the growing scale and financial toll of organised crime nationwide.
Escalating Costs of Organised Crime
The overall cost of organised crime to Australia climbed to $82.3 billion in the 2023–24 financial year, rising from $68.7 billion just a year earlier. Within this figure, illicit tobacco alone accounted for an estimated $4 billion, marking a fourfold surge in only three years.
Financial and Social Impact
Of the total $4 billion loss, roughly $3.3 billion stems from missing tobacco excise revenue. The remainder comes from healthcare expenses and reduced national productivity caused by the black market trade.
Organised Crime and Violence
Criminal networks competing for control over the illegal tobacco and vaping markets have been linked to more than 200 fire bombings, at least three homicides, and numerous acts of intimidation and extortion.
"Legitimate businesses have been forced to close their doors," said Heather Cook, Chief Executive of the Australian Criminal Intelligence Commission, during an address at Canberra’s National Security College. "Billions of dollars in lost tax revenue means less money for hospitals, schools and essential services."
Summary
Australia’s steep tobacco taxes have driven an underground market that now fuels organised crime, drains billions from public revenue, and endangers legitimate businesses.