Treasury considering changes to Australia’s contentious tobacco excise, as calls grow for a freeze

The Australian Treasury is considering changes to the country's tobacco excise due to concerns about its impact on the black market. Calls are growing for a freeze on the excise, which has increased by 60% since 2020 and now represents three-quarters of the cost of legal cigarettes. The Treasury is currently modelling the relationship between cigarette prices and demand, a process experts say is necessary to evaluate potential reforms. This examination of "price elasticity" aims to inform decisions about the excise, given the rise of illicit tobacco trade. The e61 Institute suggests this analysis is a crucial step before implementing any changes to the current excise regime.