The underground trade in illegal tobacco has become a growing cancer for the Australian economy, inflating the cost of healthcare and law enforcement. It’s now so large that it is distorting the national accounts because its sales can’t be measured.

The lost government revenue from untaxed illegal tobacco has also created a gaping hole in the government’s coffers. While the government in 2020 collected $16.3 billion in tobacco excise, it expects to gather closer to $7.5 billion this year – less than half the amount five years ago.

Illegal cigarettes on the black market are on the rise, wiping out tax revenues from tobacco.Credit: Police Media

Tobacco has become a glaring case of well-intentioned policy backfiring as successive governments have taxed their way to trouble.

The Australian Bureau of Statistics has now made the extraordinary admission that household consumption expenditure figures in its national accounts are misrepresented by its........

© The Sydney Morning Herald