‘Wake-up call’: Australian Border Force says tobacco tax could incentivise ‘criminal actors’ by inflating illicit tobacco profit margins

Border Force officials have linked Australia’s sprawling tobacco trade to the cigarette excise, which has driven prices up around $200 per kg since it was introduced in 2018. In a submission to the Australian Parliamentary Inquiry into Illicit Tobacco, the Australian Border Force (ABF) said excise increases “may impact the size of the illicit tobacco market”. “The rising cost of licit tobacco may drive increased demand for cheaper alternatives, including illicit tobacco,” the submission reads. “Increasing excise rates may also increase potential profit margins for criminal actors that seek to avoid paying legitimate tax obligations.” The ABF’s submission also drew attention towards a need for “greater consistency” in state and territory health legislation across all jurisdictions. “Current state and territory legislation with regard to tobacco varies, in some cases considerably, between jurisdictions,” the submission reads. “This variance has an adverse impact on the ability of agencies to manage the flow of illicit tobacco and to communicate policy messaging on the risks posed by illicit tobacco and the penalties that apply.” Mary Aldred, the federal MP for Monash and the chair of the Coalition’s illegal tobacco task force, said she was taking the “extraordinary admission from inside government ranks” incredibly personally. The first-term Liberal MP represents an electorate which was directly affected by the ongoing “tobacco wars” in September 2025, when a local grocer was “ramraided” by men acting on behalf of The Commission – a brutal criminal network which has been working to seize control of Australia’s illegal tobacco trade. “They didn’t make the payment and a couple of days later they were ramraided. Since then, I’ve also had other parts of my electorate either targeted or had an illegal smoke and vape shop set up,” Ms Aldred said. “The excise is driving people to the black market, and that’s funding bikies, organised crime, and in the case of (Commission kingpin) Kazem Hamad, the AFP have him as their number one national security target,” she said. “When the agency on the front line says enforcement alone won’t fix this, the Prime Minister has run out of excuses. “ABF officers are working tirelessly but they are being set up to fail by a broken system.” Ms Aldred said the government wasn’t going to be able to “police their way out of a policy failure” and that Border Force was “fighting a losing battle”. Instead, Ms Aldred says the government needs to take a “Swiss Army knife approach” and cut down the fuel excise to the level it was at when it was introduced in 2018. “Dropping the excise alone won’t address this issue, but it will take the sugar off the table and drop a large part of the incentive,” she said. “This submission is a wake-up call … Ignoring it would be a failure of leadership on community safety, public health and government revenue. Continuing with the same approach is not leadership, it is negligence.” “The Prime Minister needs to step in over his ministers, reset this failed strategy and tackle both supply and demand – before the damage becomes irreversible.”