Tuesday’s federal budget included the following explanation of how the decline in tobacco excise has resulted in the loss of billions of dollars in revenue.
Excluding new policy decisions, excise and customs duty receipts have been revised down by $1.7 billion in 2025–26 and $8.5 billion over the five years from 2024–25 to 2028–29.
The downgrade overwhelmingly reflects the significant downward revision to tobacco excise receipts. This is due to persistently weaker-than-expected collections and a weaker outlook for excisable tobacco volumes over the forward estimates.
