The Coalition, led by Liberal leader Angus Taylor, is pushing to cut Australia's tobacco excise by 80 per cent, which would slash roughly $30 off the price of a pack of cigarettes to levels last seen in 2013. Taylor argues that making legal cigarettes more competitively priced would undercut the booming illicit tobacco trade, which he says has fuelled organised crime, falling tax revenue and a wave of firebombings targeting tobacconists. The policy follows a similar proposal from Pauline Hanson's One Nation, whose rising popularity has coincided with a slump in Coalition support, though deputy leader Jane Hume denied the plan was copied from the minor party.

The current excise adds about $1.55 to each cigarette, pushing the average price of a 25-pack above $50, and the Australian Bureau of Statistics estimates 80 per cent of tobacco consumed in 2025 was illicit, up from 12 per cent in 2017. A Coalition-led parliamentary inquiry has called for the excise to be paused pending further review, but the Albanese government has resisted change, with minister Tanya Plibersek warning cheaper cigarettes "will kill people" given Australia's low smoking rates are linked to high prices; Greens senator David Shoebridge raised similar public health concerns. The announcement coincided with a suspected arson attack on a tobacco shop in Melton, Victoria, that left a man in critical condition with severe burns.