‘Australia is barely making the grade’: Press Club trio demands tobacco policy reset

Dr Nick Coatsworth, Liberal MP Mary Aldred and former Australian Border Force investigator Rohan Pike have called for a fundamental reconsideration of tobacco excise, enforcement and nicotine harm reduction, arguing that Australia’s celebrated public-health model has ceded much of the market to organised crime.

Australia’s tobacco-control orthodoxy came under sustained assault at the National Press Club on Wednesday, as three speakers contended that punitive taxation and prohibition had produced a vast criminal market which enforcement alone could no longer suppress.

Respiratory and infectious diseases physician Dr Nick Coatsworth, Federal Liberal Member for Monash Mary Aldred MP and former Australian Border Force investigator Rohan Pike converged on a common diagnosis: Australia’s historic success in reducing smoking cannot obscure the increasingly perverse consequences of its present policy settings.

Their intervention was not an argument that smoking had become less lethal, nor an exoneration of tobacco companies. It was a contention that the machinery built to discourage smoking — excise, restrictions and prohibition — now operates largely within the shrinking legal market, while organised crime supplies cheaper cigarettes and unregulated nicotine products beyond those safeguards.

“Australia’s approach to tobacco control has lost its way,” Dr Coatsworth told the Club.

“We’ve conflated nicotine with smoke. We’ve driven people to more dangerous products through price and prohibition, and we’ve allowed a triumphal narrative to substitute for balanced policy contribution.”

The address, promoted by the National Press Club under the title Illicit tobacco — It is costing Australia heaps, placed two sharply divergent accounts of Australia’s smoking trajectory at the centre of the debate.

One market, two statistical pictures

The Australian Institute of Health and Welfare’s 2025 National Drug Strategy Household Survey found that 5.6 per cent of Australians aged 14 and over smoked daily, down from 8.3 per cent in 2022–23 and 19.5 per cent in 2001.

That is an important public-health achievement and places Australia within reach of its national target of reducing adult daily smoking to five per cent or less by 2030.

The same survey, however, found that 34 per cent of people who currently smoke had recently used illicit tobacco, more than double the 16.7 per cent recorded in 2022–23.

Dr Coatsworth welcomed the reported decline in daily smoking but disputed the certainty with which some public-health advocates had treated the national estimate. He pointed to higher results from recent state surveys and argued that differences in sample populations, age thresholds, response rates and the willingness of illicit-market consumers to disclose their behaviour required cautious interpretation.

Surveys, he said, produced estimates rather than an unimpeachable account of reality.

“It seems that last Friday, at least a few professors of public health became professors of public relations,” he said.

His criticism was directed less at the survey itself than at what he described as a “triumphal narrative” surrounding its release. In his view, declaring the 5.6 per cent figure decisive without adequately examining discordant evidence risked diminishing public trust.

The statistical tension is genuine, although it does not necessarily mean either dataset is wrong.

An experimental Australian Bureau of Statistics analysis, drawing substantially upon wastewater and import data, estimated that the quantity of nicotine consumed increased by almost 40 per cent between 2017 and 2025. It found that illicit sources accounted for 80 per cent of total nicotine consumption in 2025, compared with 12 per cent in 2017.

That 80 per cent estimate is broader than the cigarette market alone. It encompasses illicit cigarettes, e-cigarettes and other nicotine products, while the ABS methodology also considers legal nicotine-replacement products. On a scope and period comparable with the Illicit Tobacco and E-cigarette Commissioner’s earlier analysis, the ABS put the illicit share at 69 per cent.

The household survey measures how many people report using products; the ABS exercise estimates the aggregate quantity of nicotine consumed. A smaller number of consumers using more nicotine, or moving between cigarettes, vapes and pouches, could therefore contribute to apparently divergent results.

Dr Coatsworth acknowledged that wastewater could not distinguish between those products, but argued that the most plausible interpretation was that smoking and vaping consumption had increased.

From public-health instrument to criminal price signal

Ms Aldred framed the excise debate through the Laffer curve: the proposition that a tax can reach a point at which further increases diminish rather than enlarge revenue, while also distorting behaviour.

“The early increases in the tobacco excise make a strong case for behavioural economics,” she said. “The emergence of the illegal market does too.”

“There’s a point at which continued excise increases stop deterring people from smoking and start driving them to an illegal market.”

The Member for Monash said tobacco excise had increased by 282 per cent since 2012 and argued that the price disparity between legal and illicit cigarettes was now directing otherwise law-abiding consumers towards criminal suppliers.

Her involvement began after a grocery store at Longwarry in her Gippsland electorate was ram-raided. She recounted the continuing fear experienced by the owner and staff, as well as the consequences for legitimate businesses situated beside suspected illicit tobacco retailers targeted in arson attacks.

The costs, she argued, were no longer confined to foregone Commonwealth revenue or smoking-related illness. They included higher insurance premiums, security guards, bollards, damaged premises, interrupted trade and teenage retail employees confronted by armed offenders.

Ms Aldred called for the excise rate to be revisited but declined to nominate the reduction the Coalition’s Illegal Tobacco Taskforce might ultimately recommend.

She cited Oxford Economics modelling which suggested that an excise reduction accompanied by stronger enforcement could return billions of dollars to the legal market. The modelling was commissioned by Ritchies IGA, a major legal tobacco retailer. A published summary of the research forecast that restoring the 2019 excise rate could increase revenue by $3.1 billion over the forward estimates and substantially reduce illicit consumption.

The assumptions behind such modelling will inevitably be contested, particularly whether consumers who have become accustomed to substantially cheaper contraband would return to legal products following a tax reduction.

Ms Aldred nevertheless rejected the Government’s contention that the criminal market had become too entrenched for excise changes to make a material difference.

“The Federal Government says they don’t want to outsource the tobacco market to crime gangs,” she said. “Newsflash — they already have.”

She urged the Prime Minister to convene an emergency meeting of National Cabinet, arguing that inconsistent state and Commonwealth laws, licensing arrangements and enforcement capabilities had produced an incoherent response.

A ‘war on nicotine’

Dr Coatsworth’s contribution extended beyond excise to the more fundamental distinction between combustible tobacco and non-combustible nicotine.

Australia, he argued, had replaced a war on tobacco with a war on nicotine, refusing to acknowledge sufficiently that vaping products and nicotine pouches, while neither harmless nor desirable for non-smokers, were less dangerous than combustible cigarettes.

“We have made cigarettes easy and cheap to buy illegally, and we have made the less harmful alternative difficult to buy legally,” he said.

Under Australia’s current vaping laws, all vapes may be sold only by participating pharmacies for smoking cessation or the management of nicotine dependence. Adults can obtain therapeutic vapes containing no more than 20 milligrams of nicotine per millilitre without a prescription, subject to consultation with a pharmacist and applicable state law. Higher-strength products and supply to minors require a prescription.

Dr Coatsworth argued that the legal pathway remained poorly used because many doctors did not recommend therapeutic vaping and many pharmacies did not stock the products.

He acknowledged concerns about youth nicotine addiction, potential carcinogenic substances in e-cigarette vapour and the tobacco industry’s history of obscuring evidence and engineering addiction. Harm reduction, he insisted, did not require the industry to be trusted.

Rather, it required policymakers to distinguish between the relative risks of different products and decide whether established smokers were more likely to reduce their harm within a regulated legal market or an uncontrolled criminal one.

“The test for this Government is not whether it can sound tough on tobacco and vapes,” he said.

“The test is to restore balance in tobacco-control policy — to reclaim the legal market from organised crime, to embrace evidence-based harm reduction, to continue to drive down smoking and nicotine use in Australia.”

“In this epidemiology exam, Australia is barely making the grade.”

Enforcement ‘futile’ without policy change

Mr Pike, who founded the Australian Border Force’s Tobacco Strike Team, delivered the most uncompromising criticism of the existing settlement.

He accused health authorities of suppressing the scale of the illicit market and argued that successive governments had persisted with excise increases long after organised crime had demonstrated its capacity to undercut legal prices.

“Police did not create this market,” he said. “Even the criminal gangs did not create the market; government policy did.”

Mr Pike described record seizures as an inadequate measure of success when illicit cigarettes remained readily available. Enforcement agencies, he argued, would require many times their present resources to dismantle a criminal industry whose enormous margins allowed syndicates to absorb intercepted shipments as a cost of doing business.

He called for a substantial excise reduction and more permissive access to regulated alternatives, including vapes and nicotine pouches.

During questions, Mr Pike was pressed about his listing as a “focal point” for the Global Institute for Novel Nicotine, an international association representing manufacturers and distributors of alternative nicotine products.

He initially characterised his involvement as participation in a group chat, before saying he had agreed several years ago to act as a nominal adviser on illicit trade when the organisation was formed. Mr Pike said he had provided no advice, held no contract and had never accepted payment from tobacco or nicotine companies.

Government insists enforcement is beginning to bite

The Albanese Government rejects the proposition that its tobacco policy has failed or that reducing excise would reclaim the market.

Following the release of the household survey, Minister for Health and Ageing the Hon Mark Butler MP described the AIHW figures as the authoritative measure of smoking prevalence and evidence that Australians were continuing to quit in record numbers.

Assistant Minister for Citizenship, Customs and Multicultural Affairs Julian Hill MP said the Commonwealth had committed more than $365 million to combat illicit tobacco since early 2024, including funding for state and territory enforcement.

The Government says authorities have closed more than 1,000 suspected illegal retailers, seized or restrained almost $50 million in assets and disrupted hundreds of financial accounts and service points associated with the trade. It argues that stronger pre-border intelligence, seizures, shop closures and financial disruption are beginning to raise illicit prices in some jurisdictions.

Mr Hill has acknowledged that high excise helped create the price differential exploited by criminal groups. He nevertheless maintains that cigarettes can be produced overseas so cheaply that no politically or medically realistic tax reduction would eliminate the black market’s price advantage.

That is now the central policy contest.

The Government believes Australia can preserve its high-excise public-health model while progressively constricting criminal supply. Wednesday’s Press Club panel argued that the scale of the illicit market has already invalidated that premise — and that enforcement is being asked to rescue a policy architecture whose incentives are working against it.

The Coalition taskforce’s eventual recommendations will reveal how far the Opposition is prepared to carry that critique into formal policy. Ms Aldred would not commit to an excise figure or pre-empt its position on nicotine pouches.

Yet the political direction was unmistakable. A substantial part of the Coalition is moving beyond demands for a tougher crackdown and towards a challenge to the intellectual foundations of Australia’s tobacco settlement.

The argument is no longer simply about how vigorously the law should be enforced. It is about whether the law, the tax system and the public-health establishment have together created a market that only criminals can efficiently serve.