Tuesday night’s federal budget revealed a sharp drop in what was once a major source of revenue for the government – the tobacco excise.
This financial year, the government expects to earn revenue from the tobacco excise of A$7.4 billion. That’s down sharply from $12.6 billion in 2022–23, and an earlier peak of $16.3 billion in 2019–20.
The government expects this downward trend to continue. Australia’s heavy tobacco taxation has driven many consumers towards illicit cigarettes.
