TAXING THE PUFF: DETERRENT OR MONEY-MACHINE

Ah, the sweet smell of taxes — or is it tobacco? Let’s take a drag on Australia’s cigarette excise, a policy puffing its way through decades of controversy. Whether you’re a smoker, a taxpayer, or just someone wondering why a pack of smokes costs more than your 3 course dinner, this one’s for you.

Let’s rewind to 1901, the year Australia became a federation and immediately decided to charge people for their vices. Taxing cigarettes was seen as a two-for-one deal: rake in revenue while discouraging unhealthy habits. Fast forward a century, and the government’s still at it, but much harder, leaning on the humble cigarette for billions in revenue each year. The justification? It’s not just a tax; it’s a moral crusade against smoking. (Or so they say while counting the cash.)

Ah, the golden question. Most of the money goes into health programs, anti-smoking campaigns, and offsetting the enormous healthcare costs linked to smoking. But let’s not kid ourselves — it’s also a significant revenue stream for the government. Smokers are essentially footing the bill for public health while simultaneously filling the treasury’s coffers. It’s like being fined for your bad habit while funding the programs to cure it.

Here’s where things get spicy: the cigarette excise doesn’t just sit still. It’s indexed, which means it rises every year, often above inflation. Why? To make cigarettes progressively less affordable, forcing smokers to think twice before buying. Or, as some might see it, to make sure the government’s cash flow doesn’t go up in smoke. Either way, it’s a calculated strategy to keep puffing on that sweet tax revenue while claiming the moral high ground.

Here’s the rub: cigarette taxes hit low-income Australians hardest. Smoking rates are higher in poorer communities, and when the price of a pack goes up, it’s these folks who feel the pinch the most. Critics argue that this creates a vicious cycle where the poor spend disproportionately on cigarettes, keeping them trapped in financial hardship. It’s like the government is saying, “We’ll help you quit by making you broke first.”

Australia’s not alone in this tax tango. New Zealand, Canada, the UK, and other countries also crank up cigarette prices to curb smoking. Some are even stricter — New Zealand aims to be smoke-free by 2025, with eye-watering prices and strict regulations. Globally, the excise game is about balancing public health with, let’s face it, a healthy dose of revenue generation.

Does the tax work? The stats suggest it does. Smoking rates in Australia have dropped significantly over the decades. But, as always, there’s a dark side. High prices have sparked a booming black market, with illegal cigarettes flooding the streets. Add in the occasional news of a corner store going up in flames, allegedly due to tobacco trafficking disputes, and you’ve got yourself a classic unintended consequence.

Could we reduce smoking without pricing it out of reach? Perhaps. Education campaigns, free quit-smoking programs, and support systems could do the trick without making smokers feel like walking ATMs. Some argue for a harm-reduction approach, promoting alternatives like vaping (a whole other controversy) or nicotine patches. The goal is the same: fewer smokers, healthier people, and maybe fewer arson incidents.

So, there you have it — Australia’s cigarette excise, a blend of health policy, fiscal strategy, and social justice controversy. Whether it’s working or not depends on who you ask. But one thing’s for sure: in the battle between smokers and taxes, the only thing burning faster than tobacco is cash.

📈 Price Milestones

• 1990s: Cigarette packs were relatively affordable, with prices hovering around a few dollars.

• 2010: A substantial tobacco tax increase in April marked the beginning of more aggressive pricing strategies.

• 2013–2020: Annual excise increases of 12.5% were implemented, leading to a rapid escalation in prices.

• 2021: By this year, the time required to work to afford a pack of 20 cigarettes had more than tripled since 1994, reflecting decreased affordability.

• 2024: The average cost of a pack reached approximately AUD 40, making smoking an increasingly expensive habit. 

• 2025: Prices continued to climb, with a pack of JPS 20s costing around AUD 41.50, and projections indicating that prices could reach AUD 50 by 2026 due to ongoing tax increases.

Australia's approach to tobacco taxation has positioned it among the countries with the highest cigarette prices globally. This strategy aims to deter smoking and reduce associated health risks. Comparatively, other countries have also implemented similar measures, but Australia's consistent and significant tax hikes have set it apart.

Summary Table: Average Cigarette Pack Prices Over the Years

Year	Average Price (AUD)	Notable Events
1990s	~$5	Baseline pricing
2010	~$10	Major tax increase in April
2013	~$15	Start of annual 12.5% excise increases
2021	~$35	Affordability significantly decreased
2024	~$40	Continued tax-driven price hikes
2025	~$41.50	Prices projected to reach $50 by 2026