Violent Tobacco Black Market Wipes $6b from Federal Budget

FINANCIAL REVIEW: The booming illicit tobacco market has wiped $6 billion from the federal budget bottom line in just five months and revenue from tobacco excise is now forecast to plummet to just over $2 billion a year by 2030.

The government raked in more than $16 billion from tobacco taxes in 2020, but the continued raising of the excise sparked a violent black market trade run by criminal gangs that has decimated the legitimate market and resulted in a massive fall in revenue.

The government is now spending hundreds of millions of dollars on dealing with the fallout, including $14 million in the budget to boost the ability of states to disrupt the illicit tobacco and e-cigarette markets.

In the mid-year budget update, the government expected to raise $5.5 billion in tobacco excise in 2025-26. Five months later, that figure is now $4.1 billion, or 24 per cent lower than expected, and will fall to $2.1 billion by June 2030.

Legal cigarettes cost about $50, of which $34 is tax and excise, while the readily available illicit product is priced at about $15. NSW Premier Chris Minns in 2025 called on Chalmers to consider lowering the excise, saying it was contributing to the illegal tobacco industry, while economist Chris Richardson has labelled the continued raising of the excise one of the worst policies this century.

“We’ve cratered the tax take, stalled the fall in smoking rates, and invited organised crime into the everyday lives of more than a million Australians,” Richardson wrote in The Australian Financial Review in April.

The budget expert said the failure by successive governments to do anything about the issue meant it would now be much harder to fix.

“Organised crime will fight tooth and nail,” he said. “They’ve been a huge success at that already: after all, they fought the law, and the law lost. Given we’re now handing them a tasty $5 billion a year in risk-free revenue, they’ll be cashed up and cranky if serious efforts are made to reverse course.” » | Ronald Mizen | Political correspondent | Wednesday, May 13, 2026

And so it will be here in the UK with Starmer's stupid, undemocratic, illiberal, and ridiculous generational smoking ban! Mark my words! That law will have to be REVERSED, REPEALED! Free up the people! You will enchain them at society's PERIL. — © Mark Alexander

Smokers Turn to Black Market because Quitting Products Too Expensive | The Business | ABC NEWS

Jul 21, 2025 | The consumption of illicit tobacco is growing, as more tobacconists pop up across the country, and revenue is lost from the legal excise. It's causing debate between politicians as experts warn Australia needs to crack down on the trade. In 2023, it was estimated that illegal tobacco consumption may account for close to 30 per cent of the total tobacco market in Australia, although these estimates by the legal tobacco industry are disputed. And despite sectors of government agreeing Australia has a problem with the illegal trade, there's mixed messaging about how to tackle the problem. Treasurer Jim Chalmers has ruled out lowering the tax excise on cigarettes, which will rise again in September, while NSW Premier Chris Minns has a different view and thinks the tax should be reduced. University of Sydney public health professor Becky Freeman says if the government was to lower the tobacco excise, it would send the wrong message. Instead, she thinks the number of outlets that sell tobacco products should be reduced.

As of July 1, NSW and Victoria introduced tobacco licensing laws, giving businesses until October and February respectively to apply for a licence to sell cigarettes. Experts say more needs to done to tackle the growing trade.


Australian politicians are as short-sighted and clueless as European politicians! Can’t they see the damage they are doing to people’s health by encouraging them to smoke black market cigarettes and tobacco because of cost? The quality of the tobacco on the black market is unregulated and the long-term health consequences of smoking it is likely to be be far worse than if they were able to afford to smoke government-regulated, quality-controlled tobacco and cigarettes manufactured at home. Moreover, the more expensive governments make tobacco products, the more likely people are to find alternative sources of enjoyment and pleasure. And that is precisely what is happening nowadays here in the West.

The best way to bring down smoking rates without causing resentment and distortions in the market is through information of the health dangers associated with smoking tobacco, not through extortionate taxation and government coercion. In any case, people do far worse things than enjoy the smoking of a cigarette.

We don’t live in utopia; rather, we live in the real world. And in the real world, people do all sorts of things, and consume all sorts of products, which are not conducive to perfect health. As Margaret Thatcher said: “The desire to achieve grand utopian plans often poses a grave threat to freedom.” – © Mark Alexander

Black Market Tobacco Floods Australian Market (2016)

As cigarette prices have risen, illegal tobacco or chop-chop is being imported into the country in increasing amounts. The Feed went undercover with Customs to see how hard it was to buy.

Price Rankings by Country of Cigarettes 20 Pack (Marlboro) (Markets) »

Black Market Tobacco Floods Australian Market – The Feed

As cigarette prices have risen, illegal tobacco or chop-chop is being imported into the country in increasing amounts. The Feed went undercover with Customs to see how hard it was to buy.

The Big Prize on N. Korea’s Black Market

A marshmallow pie is so popular in North Korea that people are buying it for up to a day's pay on the black market.