I gave oral evidence on the illicit tobacco and vapes trade to the Australian Senate Committee on Legal and Constitutional Affairs at a Public Hearing on 18 May 2026. Video here (opens in the session in which I appear).
Here are my prepared opening remarks. See here (PDF) and below.
The hearing was running behind schedule, and we agreed to give impromptu shortened versions, so this is not the same as the transcript or video.
Inquiry: Illegal tobacco crisis in Australia
Committee Hearing: 18 May 2026
Witness: Clive Bates
Introductory remarks
I am a former environmental activist, Director of Action on Smoking and Health, and senior civil servant. I currently run a sustainability and public health consultancy. I am a long-standing advocate for rational nicotine policy. I have no competing interests.
The current situation is a chaotic, lawless mess. I wish to make five points that I hope will help the Committee steer a course back to law-abiding normality
- The demand for nicotine is real, and, like alcohol and caffeine, people use it for its psychoactive effects. For nicotine, these effects are moderate: pleasure, mood modulation, and some cognitive benefits. If we accept that nicotine demand is likely to persist, then the challenge is to make its use acceptably safe – a migration of the market from high-risk combustible products to low-risk smoke-free products.
- Risk-proportionate taxation has a critical role to play in that migration. But take it too far and the public defects, believing it to be unfair. It now costs A$15,000 per year to be a pack-a-day smoker, and the cost of cigarettes is 70-80% higher than in the UK, which is a high-tax jurisdiction. There are three problems with such high taxes: they are brutally punitive and regressive; they drive illicit trade; and they penalise law-abiding behaviour, normalising law-breaking. These taxes lose their public health impact and legitimacy if most people avoid them, as is the case now.
- Illicit trade brings violence, corruption and extortion, and potentially comprises law enforcement and border organisations. Illicit markets trade in unregulated products using uncontrolled commerce, exposing people to other illegal goods and services, and drawing young people into the supply chain. Also, illicit supply is highly competitive, adaptable and innovative – more so in the digital economy.
- Enforcement action is essential, but it is more likely to be effective in arresting and convicting bad actors than in stopping illicit supply overall. Every arrested dealer, every seized container, every closed shop, every blocked platform has an alternative ready to pick up the illegal revenue. The supply is endlessly flexible and adaptive. We know from the war on drugs that enforcement action has little effect on availability and price, even if it does produce spectacular busts.
- There are several humane reasons to reduce tobacco taxes. Changing taxes back to the 2018 levels is unlikely to restore compliance, the illicit share, and revenue to 2018 levels. The necessary strategic move is to migrate people who smoke from high-risk, illegal smoking products to low-risk, legal smoke-free products. That requires a policy mix: restructuring excise, maintaining enforcement, and a more liberal regulatory system for vapes, pouches and heated tobacco that meets legitimate adult needs.