Tobacco industry gains political access as Coalition pledges major excise cuts

Anti-smoking campaigners had been on the lookout for weeks.

While in Canberra for hearings about the booming illicit trade in Australia in May, longtime observers of the tobacco industry suspected its lobbyists were working in the background to influence events.

Then, on the same day public health groups were lined up to give evidence to a parliamentary inquiry, they watched as executives from Philip Morris were ushered into a private hearing at Parliament House.

The move, orchestrated by a committee led by the Liberal Leah Blyth, was a break with decades of bipartisan practice by Australian policymakers, who have followed international practice to only deal with cigarette manufacturers in a transparent way.

The tobacco industry’s influence campaign burst back into the headlines this week, as the politics of smoking emerged as a key fight in the next election.

On Thursday, a couple of weeks after Pauline Hanson pledged a 75% cut to tobacco excise, the opposition leader, Angus Taylor, one-upped her with a promised 80% cut. The Coalition has also pledged $200m for tougher law enforcement against organised crime.

Big tobacco companies have been pushing for major cuts to excise, the federal tax and policy tool used to push down smoking rates, for decades. Those calls have grown louder in response to the explosion in illegal cigarette sales around the country. This illicit trade now accounts for 80% of tobacco consumption.

In short, the manufacturers, long shut out of policy debates in Canberra and subject to increasingly tough plain packaging standards, were given a window of opportunity for the first time in years.

Becky Freeman, a leading public health expert at the University of Sydney, tells Guardian Australia the industry took its shot.

“If you were a tobacco industry executive this morning, I’m sure you’d be thinking ‘fantastic, I hope the Coalition wins government as it will prop up our business and help our bottom line,” she says.

‘You scratch my back, I’ll scratch yours’

Freeman is a long-term observer of the tobacco industry and one of its fiercest critics. For years, she has warned the industry is using a combination of political donations, well-connected lobbyists and third-party groups in an effort to influence government policy.

Two of the world’s biggest tobacco giants continue to donate to the Nationals, which is the only major party to still accept their money. The Liberals stopped accepting tobacco donations in 2013, when Tony Abbott was opposition leader. Labor stopped in 2004.

In 2024-25, the Nationals received $225,500 from two large manufacturers. British American Tobacco donated $55,000 to the Nationals in 2022-23 for the first time in more than a decade. A year later, it sent the party $88,000.

The Nationals deny this money has influenced their policy positions and the party’s long-held advocacy on vapes. Leader Matt Canavan tells Guardian Australia tobacco companies are legal businesses and are free to donate to the political parties of their choice.

“I am proud of the role the Nationals have played in developing a more reasonable approach to cigarette excise and vaping regulation,” he says. “The lack of engagement with the legal tobacco industry is one of the reasons why we have one of the greatest public policy failures in history.”

He has called on Labor to drop its opposition to an excise cut, telling the government to “get its head out of the sand”.

But Freeman is unconvinced.

“I know how political quid pro quo works,” she says. “You scratch my back, I’ll scratch yours.”

Simon Chapman, who has researched the tactics employed by tobacco lobbyists for more than 50 years, says he recognises the same talking points he heard early in his career.

“I cannot remember a time in my career where they have not been calling for a reduction in tax.

“The tobacco industry is just a pathetic shadow of what it used to be and yet here we are, two major political parties are effectively doing their bidding,” Chapman says.

Lobbying ‘front and centre’

Tobacco executives appearing in closed door hearings of a parliamentary inquiry, without cameras, was unusual because it signalled a change in how the industry has been operating over the past decade.

Much of this lobbying has been done indirectly. The World Health Organization has for years accused tobacco companies of funding scientists and third-party groups to produce biased research and to lobby for outcomes to benefit their bottom line.

Five years ago, the Australian Retailers Association cancelled a contract with the public relations firm Burson Cohn and Wolfe to lobby for vapes to be legalised. According to media reports, the money from the firm was actually sourced from Philip Morris International.

Two other lobby groups, the Australasian Association of Convenience Stores and Master Grocers Australia, have long supported the tobacco industry’s campaign against plain packaging reforms. Their corporate members include tobacco companies.

In 2023, both groups declined to tell a Senate inquiry how much money they received in tobacco and vaping industry funding, saying the information was “commercial in confidence”.

That same year, an academic study found almost half of internal tobacco company lobbyists held positions in state, territory or federal government before or after working in the tobacco industry.

Freeman says that traditionally, the tobacco industry would much rather operate behind the scenes and “avoid being questioned and examined”.

“Once the plain packaging debate quietened down, after Australia won, I saw the industry go quiet and back under cover,” Freeman says. “But in the last couple of years, it has become increasingly clear to me that the industry is becoming more front and centre.”

Freeman points to a recent podcast hosted by British American Tobacco’s chief corporate officer, Kingsley Wheaton, who interviewed Abbott on 2 April. The former prime minister had been elected federal president of the Liberal party just days earlier, on 30 May.

‘It is extremely disappointing’

David Hill is another anti-tobacco campaigner who has devoted his entire career to public health research. He says cutting the excise won’t make a substantial difference to organised crime, despite the Coalition’s assurances.

Hill also argues the cut will ultimately benefit tobacco companies, whose profits have been smashed by people turning to cheaper illicit cigarettes.

“At first glance, it may look plausible,” Hill says. “This idea that if the legal price of cigarettes drops enough then you’ll successfully compete in a business sense with the illicit market and it will go away.

“But the price of making these illegal cigarettes is so trivial. If you can get them for 4c a stick in Cambodia, there’s a huge scope for crooks to just drop their price and still make a profit.”

The Coalition’s changes do have some significant support.

On Thursday, the economist Richard Holden and former deputy chief medical officer Nick Coatsworth wrote to the prime minister urging him to support the excise cut. So too did the former border force official Rohan Pike, who has advised nicotine industry-linked organisations.

But most health groups are alarmed. The Public Health Association of Australia says the change could risk an increase in daily smoking prevalence, which fell to 5.6% in 2025. The Cancer Council and the Australian Medical Association believe it could lead to a new generation of nicotine addiction.

On Friday, the World Health Organization, which does not comment on specific policies, reaffirmed its position that affordability reduces demand for tobacco products.

“From a public health perspective, taxes should be set with the aim of continually reducing affordability and demand,” says Benn McGrady, the head of WHO’s fiscal and legal measures unit.

After almost 50 years of hard-fought wins, Hill is worried the tide may be turning.

“It is extremely disappointing,” he says. “But I am also optimistic that when people really roll up their sleeves and look at this, the current excise will be retained.”