New South Wales Premier Chris Minns has continued to break ranks with federal Labor in calling for a “common sense” cut to the tobacco excise.
Mr Minns doubled down on Sunday to insist the tobacco excise was to blame for organised crime’s involvement in the explosion of illegal cigarettes.
Earlier this month Mr Minns joined One Nation leader Pauline Hanson’s call to cut the federal tobacco excise and agued the levy was “actually creating a black market for cigarettes”.
Australian Bureau of Statistics data released this month found that nicotine consumption increased by almost 40 per cent between 2017 and 2025, despite population growth of only 14 per cent over the same period.
Premier Minns told Sky News Sunday Agenda that he could walk down the street in “any suburb in Sydney” and see discarded packets of illegal cigarettes.
“I can walk down the street in any suburb in Sydney and see packets, discarded packets of cigarettes – I won’t go through the names of the brands – but they’re not part of the legal tobacco marketplace,” he said.
“Mainly because organised crime’s involvement in illicit tobacco has exploded at the same time as the price of the legal product has massively grown.
“I think it’s common sense to put the two things together and realise that these people have entered a black market to supply a good that’s otherwise legal for a far cheaper price.”
Despite the abundance in illicit tobacco products, Mr Minns remained optimistic that lawmakers and law enforcement were “doing a good job” in shutting down illegal tobacconists.
“We’ve closed down 200 in the last couple of weeks. We closed 200 more down in a few weeks before that and we’ll probably closed down another 200 in the next month or so,” he said.
“But it won’t stop, and the reason it won’t stop is because legal tobacco is so expensive that the illegal product is too tempting for these crooks.
“Now we could throw enormous amounts of resources at tackling organised crime, or we could put that money to better use somewhere else in the budget and have a common sense approach to this excise.
“In my view, it’s just too high.”
Mr Minns said the excise was originally introduced to reduce tobacco consumption in the community, but the “exact opposite thing is happening”.
“It’s cheaper than ever and more people are using it than ever,” he said.
“Despite everybody’s best intentions, there’s got to be an understanding that this isn’t working.
“This is a federal government responsibility, but from my point-of-view, understandably, people in New South Wales are saying, ‘what are you doing about high streets? What are you about deploying resources to combat illegal tobacco?’
“We’re putting money into it. My question is, could we be putting that money somewhere else?”
In 2017, illicit products accounted for just 12 per cent of total tobacco consumption, but by 2025 that figure had risen dramatically to 80 per cent.
Labor’s own budget has forecast tobacco excise revenue collapsing from $7.78 billion in 2024-25 to just $4.13 billion this financial year, well below the estimated $6.8 billion annual healthcare cost of smoking.
In March, the excise rate increased, as it does each year in March and September, to $1.53 per stick.