To the Honourable Members of Parliament,

We, the undersigned, respectfully submit this petition seeking a review and reduction of tobacco excise under the Excise Act 1901, Excise Tariff Act 1921, and associated taxation instruments. We argue that the current excise regime is disproportionate, ineffective, inequitable, and in certain respects, inconsistent with foundational principles of Australian law and governance, particularly regarding fairness, proportionality, and non-discriminatory taxation.

 

1. Excessive Tobacco Excise May Breach the Principle of Proportionality

While Parliament holds broad taxation powers under Section 51(ii) of the Australian Constitution, those powers must still be exercised within the bounds of reasonable proportionality in relation to the purpose of the law.

Current issue:

The combined excise and customs duties now account for 70–85% of retail tobacco prices. This rate far exceeds what is proportionate to:

internal revenue needs
public health objectives
ordinary taxation principles

Under the High Court’s proportionality reasoning (e.g., McCloy v NSW (2015); Clubb v Edwards (2019)), a measure may be unconstitutional if:

It is not rationally connected to its stated purpose
It is more restrictive than necessary (“suitably adapted”)
It imposes burdens that outweigh its objectives

Argument:

When taxation becomes so excessive that it drives consumers into the illegal market, creates inequality, and undermines compliance, it ceases to be a proportionate mechanism for achieving public health aims.

2. Excessive Excise Undermines Consumer Rights and Fair Trading Principles

The Australian Consumer Law (ACL) requires that markets operate in a manner that is fair, competitive, and transparent. Although ACL does not regulate taxation, the government’s own policies should not create:

anti-competitive distortions,
barriers to fair market access, or
conditions that encourage criminal monopolies.

By making legal tobacco so unaffordable that it pushes demand into unregulated channels, the government inadvertently undermines competition, contradicting the spirit of:

Competition and Consumer Act 2010
Part IV: Restrictive Trade Practices

A tax regime that unintentionally advantages criminal groups over licensed small retailers is inconsistent with fair-market principles.

3. The Current Regime Creates Socioeconomic Discrimination Contrary to the Principles of Equality

While Australia does not have a constitutional Bill of Rights, the High Court has repeatedly affirmed that taxation must remain non-discriminatory, consistent with:

Section 51(ii) of the Constitution (“but not so as to discriminate between States or parts of States”)
Broader common-law principles of equity and fairness

Excessive tobacco taxation disproportionately affects:

low-income households
Indigenous communities
rural and remote Australians
individuals with addiction disorders
people with mental health conditions

This results in an indirect discriminatory effect, even if not explicitly discriminatory in design.

A taxation system that imposes a vastly heavier burden on vulnerable populations undermines:

principles of substantive equality,
Closing the Gap policy objectives,
and the government’s own duty to avoid disproportionate harm.

4. Excessive Excise Is No Longer Justified Under the Public Health Power

Commonwealth excise policy has historically been justified as a public health strategy. However, the principle of “legitimate purpose”—part of constitutional proportionality tests—requires that a measure:

Achieve its intended goal, and
Not cause outcomes that contradict that goal.

 

Evidence of failure:

Smoking rates have plateaued, not dropped, despite escalating taxes.
Illegal tobacco accounts for an estimated 20–25% of national consumption.
Criminal black-market networks have flourished under the current tax regime.
Enforcement costs have risen dramatically, diverting public funds.

 

A measure that no longer meaningfully advances public health, and instead fuels criminal activity, cannot continue to rely on the public-health justification for its extreme severity.

 

5. The Current Regime May Be Inconsistent With the Implied Constitutional Freedom of Political Communication

 

This is a more subtle but arguable point:

Because smoking-related poverty reduces individuals’ ability to participate fully in civic and political life, excessive taxation may burden the implied freedom of political communication, an essential element of the Constitution as recognised in:

Lange v ABC (1997)
Brown v Tasmania (2017)

While the intent of excise laws is not to restrict political communication, laws with an indirect burden must still meet proportionality requirements.

If taxation disproportionately impoverishes specific groups, reducing their access to civic life, the state may be infringing constitutional freedoms in effect, if not in intent.

6. The Current Excise Structure Violates the Spirit of the Taxation Framework’s Ethical Obligations

Australian tax law is guided by principles of:

fairness
efficiency
equity
transparency

These principles are articulated in policy documents from:

The Australian Taxation Office (ATO) Charter
The Department of Treasury Tax White Papers
OECD Fair Taxation Guidelines (which Australia endorses)

A punitive excise rate that:

harms vulnerable communities
expands illegal markets
destabilises lawful retail
and fails to meet its purported objective

is inconsistent with the ethical foundations upon which Australian tax policy is meant to rest.

WHAT THIS PETITION FORMALLY REQUESTS

Pursuant to the above reasoning, we respectfully request that the Parliament:

1. Initiate a formal review of the tobacco excise structure

under the Excise Act 1901 and Excise Tariff Act 1921.

2. Reduce excise to a level that meets constitutional proportionality standards

and aligns with practical public-health outcomes.

3. Address the unintended discriminatory impact on vulnerable populations.

 

4. Harmonise tax policy with fair-trade principles

 and reduce incentives for illegal market activity.

5. Adopt a taxation model that reflects fairness, transparency, and equity.

 

CONCLUSION

Excessive tobacco excise has evolved beyond revenue collection or health policy. It now risks inconsistency with multiple legal principles, including proportionality, equity, non-discrimination, and fair-market competition. Reforming this tax structure is essential to:

restore fairness
improve compliance
reduce crime
strengthen public trust
and uphold the integrity of Australia’s legal and economic systems

We therefore urge the Parliament to act.