Many Australians might consider Angus Taylor uninspiring, but it would be unfair to accuse the Liberal leader of lacking courage today over his promise to reduce the cost of legal cigarette packets from around $50 to $26.

After he proposed legalising recreational vaping and cutting tobacco excise by 80 per cent, the criticism lit up. His objective is to try to stamp out cheap cigarettes on the the black market that drove up nicotine consumption about 40 per cent between 2017 and 2025 and have generated an estimated $4 billion to $7 billion in profits for crime gangs.

Social Services Minister Tanya Plibersek declared the plan would “kill people”. The Australian Medical Association and the Cancer Council blamed the Coalition for undermining decades of work to reduce smoking. One frequently quoted expert accused him of caving to the tobacco industry.

The Coalition’s policy is a response to what is clearly a significant failure of health and Budget policy. By jacking up taxes to $1.55 per cigarette, the government inadvertently created a profit opportunity for criminals. They now control as much as 80 per cent of the market, according to an estimate by the statistics bureau.

The black marketeers have exposed the paradox of tobacco excise. The higher the tax is set, beyond a certain point, the less money it raises.

Revenue from tobacco excise peaked at around $16 billion in 2019-20. The figure fell to around $8 billion last financial year and is forecast to halve again this year as the 8 per cent of Australians who still smoke daily buy from the dodgy tobacco shops that seem to have opened on every retail strip — and are mysteriously prone to catch fire themselves.

Eliminating smoking?

The opposition to the Opposition’s plan is being driven by government-funded organisations that appear to be co-ordinating with Health Minister Mark Butler’s office, according to Nick Coatsworth, a doctor who supports the policy and achieved fame during the COVID pandemic as the deputy chief medical officer.

Dr Coatsworth, who works in a public hospital, argues the big cancer charities and lobby groups — he calls them the Praetorian Guard — oppose Mr Taylor’s plan because their long-term goal is to stamp out smoking altogether. The Coalition, a supporter of free choice, wants smokers operating within the legal economy. If smokers choose to risk their health, that is their choice, he argues.

“Their public health objective is different,” he told The Nightly. “They don’t want cigarettes sold in this country.

“Then you have people like myself. We accept people are going to smoke. Therefore we have to have a legal market. It has got to be regulated but people will smoke. Versus the other side of the debate, which is ‘we don’t want cigarettes in this country’. They need to be honest with Australians.”

Presented with Dr Coatsworth’s comments, Australian Medical Association president Danielle McMullen said the Coalition’s policy would backfire and increase smoking. “It would be a huge policy failure and makes no sense,” she said.

A Cancer Council official said it was not the time to abandon policies that have cut smoking to the lowest recorded levels.

Dr Coatsworth, economist Richard Holden and former AFP officer Rohan Pike on Thursday wrote to Anthony Albanese urging him to implement the Coalition’s plan. The Government has previously ruled out cutting tobacco excise, choosing instead to provide an extra $350 million for law enforcement.

An explosion

For a mostly peaceful country, violence caused by the tobacco trade has shocked many Australians. In Victoria there have been 193 firebombings and other forms of arson linked to the trade, according to the police. Six people have died.

On Thursday morning, around 3am, a ute reversed into a tobacco shop in Melton, a suburb west of Melbourne, and smashed a large vertical hole in shutters protecting the shopfront. Two men got out and used an accelerant to set the shop on fire, according to video footage from an adjacent shop shared by the police.

They weren’t skilled arsonists. An explosion set both of them alight. They drove off in the ute, although one fell out of the car and was left behind for an ambulance and the police. He is in a critical condition in hospital, according to authorities.

Even though they were effectively banned in 2024, many tobacco shops sell vapes, which are particularly popular with teenagers and are only meant to be sold by pharmacies to holders of doctors’ prescriptions. Also known as e-cigarettes, 96 per cent are illegal. The market is worth about $1.6 billion.

The Coalition plans to tax nicotine vapes at 50 cents per millilitre of liquid and subject them to the GST. Nicotine oral pouches, which were banned from import in July, would be legalised and taxed at 2.5¢ per milligram of nicotine. The pouches are promoted as less harmful than chewing tobacco or Swedish snus.

One Nation first mover

Since newspaper cigarette ads were banned in 1990, the politics of smoking has gone one way: to greater restrictions and higher prices.

Until now. Mr Taylor has shown he is prepared to open himself to criticism from the government to propose what he considers good policy.

But he can’t take all the credit. Two-and-a-half weeks ago One Nation said it would cut tobacco excise by 75 per cent. “This is not about encouraging smoking,” One Nation leader Pauline Hanson said at the time. “It is about restoring the rule of law and breaking the black market.”

One Nation’s decision risked the Coalition being aligned with the Albanese Government, reinforcing one of forces behind One Nation’s rise over the past year: the perception the two establishment parties broadly agree on policy. One Nation refers to this as the “uniparty”.

By moving to One Nation’s position, Mr Taylor has demonstrated he is trying to win votes from the right, rather than the left.