A senior Labor minister was asked a simple question about Australia’s exploding black market cigarette market. His answer left a politician speechless

The Albanese government has sparked fury by returning a firm “no” when asked if the country’s high tobacco taxes were fuelling a rampant black market.

The average price for a legal packet of 20 cigarettes is now more than $40, with each individual cigarette slapped with a $1.49 federal excise, after it was hiked a further 5 per cent in September. Meanwhile, an illegal pack of cigarettes sells $12 or less.

Internal tobacco industry figures show illicit tobacco now accounts for 50 per cent of all tobacco sales in Australia, and that figure is expected to reach 80 per cent in 2026.

But Labor senator and cabinet minister, Murray Watt, has insisted the tax is not contributing to illicit sales, claiming there’s “no evidence” for it.

At Senate estimates on Tuesday, One Nation Senator Malcolm Roberts questioned Senator Watt, who was representing Home Affairs Minister Tony Burke, about the illegal tobacco trade.

“Do you consider the government’s very high tobacco duty as the reason otherwise law-abiding citizens are prepared to buy illegal tobacco, for generally a third of the legal price?” Senator Roberts asked.

“No,” came the flat response from Senator Watt.

“Any reasons?” asked Senator Roberts.

“There’s absolutely no evidence to suggest that argument,” Senator Watt replied.

“You’re joking,” said Senator Roberts after a chuckle.

“No,” Senator Watt repeated.


The One Nation Senator appeared surprised as he pressed further, asking: “No data - just meetings, just ‘no’. Empowering organised crime, decreasing revenue that taxpayers have to make up, and you just say ‘No’?”

“Well, you asked me a question and I said, ‘No,’” Senator Watt said.

In later comments to News.com.au, Senator Roberts described the response of his Labor counterpart as a “joke”.

“Murray Watt’s argument that super high tobacco taxes don’t incentivise Australians to buy black-market smokes is beyond belief,” Senator Roberts said.

“It turns government’s public policy positions into a laughingstock if they can’t admit reality. It’s a joke.

“The government is completely out of touch with the reality in which Australians are living. People are seeing tobacco taxes as government greed. It’s not about health anymore.”

A tobacco industry insider said it was obvious that the excise was turning Aussies toward illicit cigarettes.

“It’s frightening that a senior cabinet minister can show such ignorance on basic economics,” said the employee at a major tobacco firm under condition of anonymity.

“If you tax something to the moon and criminals sell it for a third of the price, people buy the cheap version.

“That’s not controversial - that’s Economics 101.

“If Senator Watt doesn’t think price is a factor, then he should state what is driving otherwise law-abiding citizens to buy products from criminals who use the profits to fund other crimes, including human trafficking.”

https://www.news.com.au/finance/economy/australian-economy/youre-joking-wild-exc...