Angus Taylor says, "The price of cigarettes in this country is already down around $15 a pack or less." (ABC News: Ian Cutmore)
The Coalition has argued its proposal to slash the tax on tobacco by 80 per cent will not create more smokers.
Opposition Leader Angus Taylor says cheap cigarettes are already available on the black market, and reducing legal cigarette prices will stamp out the illicit trade.
Mr Taylor has warned the federal government that he will hold it accountable for tobacco-related crime, saying it could be fixed by cutting the excise.
Opposition Leader Angus Taylor says slashing the tax on a pack of cigarettes by more than 20 dollars will not create more smokers, as the cost of illegal cigarettes is already at that price.
The Coalition has not modelled how its proposed 80 per cent cut to the tobacco excise would affect smoking rates, Shadow Home Affairs Minister Jonno Duniam told ABC's Insiders program, though it has looked at the consequences of similar approaches overseas.
Canada had raised tobacco taxes through the 1980s and 1990s to discourage smoking, but after an explosion in organised crime, Canadian federal and provincial governments slashed tobacco taxes in 1994.
The cuts led to a spike in smoking, particularly among young people, Senator Duniam said, however smoking rates in Canada have ultimately fallen.
"There was a point in time they went up, but over the course of time — as the illicit tobacco trade trailed off — smoking rates went down to where they are now, which is 11 per cent," Senator Duniam said.
"And their policy settings continued that trajectory over that course of time."
Jonno Duniam says Canada's approach ultimately led to lower smoking rates. (ABC News: Matt Roberts)
Canada's federal and provincial governments eventually restored pre-1994 tax rates on tobacco, which supporters say allowed a gradual return after the black market had been crushed and law enforcement established.
Critics, however, say it failed to provide a permanent fix, with the illicit black market returning, higher youth smoking rates in the meantime, and lost revenue from the tax cut.
The tobacco commissioner has estimated about half of all tobacco sales in Australia are now through the black market — fuelling billions in proceeds for crime groups, leading to increased violence particularly in Sydney and Melbourne, and eating into federal government revenue from the tax on tobacco.
Senator Duniam said modelling by the Parliamentary Budget Office his party commissioned on how deeply to cut the tobacco excise found a "real change" in consumer behaviour if the excise was cut by 80 per cent.
