Coalition proposes 80% tobacco tax cut; government funds racist incident register for First Nations

Coalition's tobacco tax plan

Opposition leader Angus Taylor on Thursday rolled out his plan to tackle Australia's growing tobacco black market by cutting the excise by 80 per cent. The proposal would reduce the tax on a standard pack of 20 cigarettes from approximately $30 to $6. Taylor's announcement comes as data shows more than half of the tobacco consumed in Australia last year was purchased illegally.

Public health authorities have long used high tobacco excise as a tool to reduce smoking rates by making cigarettes more expensive, and they have consistently warned against lowering the tax. The Coalition's plan represents a significant departure from that approach, emphasising the need to undercut the black market.

Funding for racist incident register

In a separate development, the federal government has provided $2 million to the Call It Out register, an online platform for reporting racism against First Nations people. Since its launch in 2022, about 2,100 racist incidents have been reported.

Minister for Indigenous Australians Malarndirri McCarthy said the funding followed the parliamentary racism inquiry, which heard evidence that 'racism is everywhere in this country'. Speaking personally, McCarthy noted her own experiences and those of family members, as well as systemic concerns raised by health workers and doctors.

Professor Lindon Coombes from the Jumbunna Institute, which runs the register jointly with the National Justice Project, said the funding would go towards staffing, web development and public awareness. He assured the public that information submitted to the register 'will be protected, it will be read, and it will be used to come up with strategies to work against racism'.

George Newhouse of the National Justice Project said they had learned from other communities recording incidents of Islamophobia and anti-Semitism. He described the lack of official records of racism against First Nations people since 1788 as an 'invisible scourge' and argued that without data, governments cannot see the problem.

Why This Matters

The tobacco tax proposal would dramatically reverse decades of public health policy, potentially reducing smoking rates through a different mechanism — but also risking increased legal consumption.
The racism register funding signals a federal commitment to systematically document discrimination, which advocates say is essential for evidence-based policy.
Both issues touch on illegal markets and systemic social problems: tobacco black market enforcement and racism as an 'invisible scourge' that governments currently lack data to address.

Background

Tobacco excise in Australia has been steadily increased by successive governments as a public health measure to discourage smoking. However, high prices have fueled an illegal tobacco trade, with organised crime groups importing contraband cigarettes. The Coalition's proposal represents a sharp reversal of this long-standing strategy. Meanwhile, the Call It Out register was established in 2022 as a partnership between the Jumbunna Institute and the National Justice Project to provide a safe reporting mechanism for First Nations people experiencing racism. The parliamentary racism inquiry concluded in August 2026, hearing testimony that racism remains widespread.

Key Perspectives

[Public Health Authorities]: Traditionally support high excise as the most effective tool for reducing smoking rates, and would likely oppose the 80% cut as undermining decades of progress. [Coalition (Angus Taylor)]: Argues that the current excise is so high it has created a lucrative black market, and that slashing the tax will make legal cigarettes cheap enough to displace illegal trade. [First Nations Advocates]: Welcome the $2 million funding as a step toward making racism visible and actionable; Professor Coombes and George Newhouse stress the need for protected, systematic data collection. [Critics/Skeptics]: Could question whether the tobacco tax cut would actually reduce black market activity or simply increase legal smoking; they may also doubt whether self-reported incident data will translate into effective anti-racism strategies.

What to Watch

Whether the Coalition provides costings and revenue projections for the 80% excise cut, and how the government responds.
The impact on reported smoking rates and black market tobacco volumes if the policy were implemented.
The first public report from the Call It Out register after the new funding; whether incident numbers rise with increased awareness and staffing.

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