Raising cigarette taxes and tobacco wars have created a ‘serious’ budget problem. What can Labor do about it?

Revenue from the tobacco excise has been falling for a few years, but it has now dropped to its lowest in 14 years; budget papers show it will only keep falling. Photograph: Bloomberg/Getty Images

The tobacco wars just shot a $6.9bn hole in the federal budget. A wave of crime in otherwise quiet suburbs has now become a structural drag on the nation’s finances.

The treasurer, Jim Chalmers, admits there’s “a very serious problem” that must be addressed. But there’s disagreement about how to best solve it. And until that happens, major healthcare policies – including those that deal with the damage caused by tobacco – become harder to pay for.