Tobacco taxes fuel underworld crime wave
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The thought of lighting a dart makes me nauseous. My mother was a heavy smoker, and the continual smell of smoke is one of my most unpleasant childhood recollections.
She quit smoking 12 years ago, but the ensuing emphysema has significantly reduced her standard of living.
Despite that, I was never in favour of taxing cigarettes as hard as Australia does because I understood it would result in three enormous negative consequences:
- It would generate a massive black market for cigarettes. Tobacco smuggling will expand, providing a source of cash for criminal groups and potentially endangering national security.
- New health risks will emerge as vaping’s popularity expands.
- It would reduce the government’s tax take as the black market trade expanded and individuals turned to untaxed alternatives.
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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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