The cutting of pleasures, the trimming of delights and telling people how they can enjoy life, is the sort of thing that will be tolerated, up to a point. Otherwise liberal countries do suffer moral convulsions, be it about sex, drug taking, smoking and boozing. Regulations and laws are inevitably passed, much of it tolerated. But instead of addressing the vice in question, invigilating rule makers and bureaucratic needlers often end up creating something worse. That’s when questions start being asked.
The demon tobacco is particularly relevant here. While tobacco companies deserve their satanic reputations for ruining health, knowingly denying medical science and encouraging addiction, governments and state authorities have also capitalised. The smoker, in effect, has become a unique exploited species, derided by the moralists for taking to the puff and polluting sacred air, seduced into addiction, and having the wallet raided by the severe excises levied upon the product.
The relentless battle against tobacco consumption has had a curious turn of late in a country which counts itself one of the most successful in restricting it. Over five decades ago, the Marlboro Man vanished from Australian billboards and was nowhere to be seen on television. An aggressive health campaign, accompanied by images of graphic savagery and brutal steep rises in the tobacco excise, accounted for a decline in consumption. (From 2013, the Commonwealth legislated 12.5% annual increases, followed by further rises in the excise.)
In recent years, however, a few problems have emerged. In 2025, the revenue model that the Commonwealth had relied upon was no longer providing expected returns. Legal cigarette and tobacco sales had fallen by 29% in the year through to September. The Australian Tax Office, in calculations made for 2023-24, estimated a net loss of A$3 billion.
Economist John Quiggin explains this decline with admirable clarity: “The short answer is that, over the past decade or so, the tobacco excise has been steadily increased to the point where there are big profits to be made from dodging the tax.” The Australian Financial Review, with a dash of cynicism, also noted that the unquestionable harm caused by smoking had “given successive governments social license to ratchet up taxes on tobacco products for decades while enjoying the accompanying budget bonanza.”
A paper by the conservative Centre for Independent Studies published in November last year argues that a misalignment of priorities has emerged in the policy of taxing tobacco consumption. The Commonwealth, in the main, had been “rewarded for over-taxing while states and local communities bear the health, policing, and insurance costs of the disorder that results.”
Punishing excises have, effectively, encouraged smokers to shop elsewhere. The number of tobacconists and innocuous convenience stores have proliferated, profiting from under-the-counter sales of untaxed tobacco with plain packaging and illegal vapes. The variation of price between a legal pack of 20 cigarettes (about A$50) and one available at such stores (say A$16), should make policy makers blush. The onus has fallen to the States to try to punish infringements, something they have been doing with a certain degree of leniency. To this can be added a throbbing surge in violent crime, thriving criminal syndicates and, if any concession to abject failure was needed, an increase in smoking rates.
In the face of such a collapse in policy, government wiseacres and health advocates remain stubborn to any change on taxing tobacco. Terry Selvin, chief executive of the Public Health Association, sees no reason why the tobacco lobby should be placated, placing the stress, as all fundamentalists on controlling behaviour do, on stiffer regulations. “I think it’s perfectly legitimate for the current excise rate to remain at its current level to allow time for proper enforcement to be put [in] place.” The Australian treasurer Jim Chalmers and the federal health minister, Mark Butler, have both refused to lower the excise. This is despite Butler’s admission in September last year about instances of “violence and arson taking place as rival gangs try to take control of what is a very high-revenue market for them.”
The prohibitive nature of the tobacco excise in Australia has created a state of affairs uncannily similar to the banning of liquor for sale and distribution between 1920 and 1933 in the United States. Initiated by the passage of the Eighteenth Amendment and the Volstead Act, Prohibition was the fruit of frightful earnestness and fanaticism, progressive hope and aspirational absurdity. “The American people have said that they do not want any liquor sold, and they have said it emphatically by passing almost unanimously the constitutional amendment,” declared House of Representatives Judiciary Chairman Andrew Volstead. Instead of discouraging the consumption of liquor, it created an industry of illicit, often dangerous consumption, producing such criminally enterprising types as Al Capone, encouraging the bootlegging antics of Joseph Kennedy Sr, father of the 35th President of the United States, and gave birth to The Great Gatsby, Scott Fitzgerald’s near perfect, sublime novel of debauched sensibilities and ruined dreams. From then on, America became a nation of habitual lawbreakers.
The effect of Prohibition was inimitably captured by the Republic’s most acerbic critic on the subject. “None of the great boons and usufructs that were to follow the passage of the Eighteenth Amendment has come to pass,” thundered H. L. Mencken in 1925. “There is not less drunkenness in the Republic, but more. There is not less crime, but more. There is not less insanity, but more. The cost of government is not smaller, but vastly greater. Respect for law has not increased, but diminished.”
The Australian model of prohibitive sale of tobacco, accompanied by a zealous public health campaign, initially diminished consumption. The tide has turned. Government greed and monomania set in. The continuing increase of the tobacco excise has encouraged a tobacco black market run by savvy syndicates waging turf wars over distribution. In response, both the bureaucracy of ineffective law enforcement and the number of smokers has increased. Even the generally dull New South Wales Premier Chris Minns had to grimly muse that “this would be the only tax in the world where it’s doubled but the rate of revenue collection has halved. Something is obviously happening here.” The obvious trend, however, is often the least observed in Canberra.
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This content originally appeared on Dissident Voice and was authored by Binoy Kampmark.