The Australian Bureau of Statistics released its first estimates in 2025 showing that 80% of tobacco consumed in Australia came from illicit sources, up from 12% in 2017. The agency also reported that nicotine consumption rose by 40% between 2017 and 2025, a trend it attributed to illegal tobacco, e-cigarettes, and other products.
According to the bureau, the cost of legal cigarettes in Australia tripled between 2016 and 2025, while the price of illegal tobacco products remained relatively constant over the same period. Household spending on cigarettes fell to levels similar to those seen in 2016, even as overall consumption increased. Australia's population grew by 14% between 2017 and 2025. The bureau noted that its estimates on illegal tobacco consumption are experimental and that the method and data sources could change.
The ABS used nicotine metabolite concentrations detected in wastewater samples to assist in estimating illegal tobacco consumption. Government revenue from tobacco excise taxes dropped to the lowest level in 14 years in 2024, creating a $6.9 billion shortfall in the federal budget that year.
New South Wales Health Minister Ryan Park criticized the federal government’s tobacco excise policy, saying, “The data was unsurprising and pointed to a growing disparity between the cost in legal and illicit tobacco, created by the federal government’s tobacco excise.” He added, “This public health failure has seen states and territories have to dedicate further resources in licensing, enforcement and in dealing with the healthcare challenges that result from it.” NSW Premier Chris Minns echoed the concern, saying, “The tobacco excise was no longer working as a matter of tax or health policy.”