Dodgy darts might be twice as prevalent in Australia than legal ones, as excessive excise rates fuel the black market for smuggled cigarettes, the nation's illicit tobacco watchdog has revealed.
The latest estimates put the market share for illegal tobacco sales between 25% and 65%, illicit tobacco and e-cigarette commissioner Amber Shuhyta told a Senate estimates hearing on Tuesday night.
Rising tobacco taxes have driven the average price of a pack of over-the-counter cigarettes towards $50 and incentivised criminal gangs to set up shop.
In stark contrast, a pack of black market cigarettes bypassing legal import channels can be easily found for about AU$15 (NZ$17.17).
The result is a steep decline in taxation revenue and sales for legitimate retailers.
Read More: How smugglers are trying to sneak cigarettes into New Zealand
Organised crime groups' efforts to control the illicit tobacco and vape market have led to murders, extortion and hundreds of fire bombings across the country.
IGA supplier Metcash on Monday said tobacco sales for the six months to October 31 plunged 35.1% to $637.8 million (NZ$725.3 million).
In the past five years, Australia's tobacco tax take has dropped from a peak of 0.8% of national income to below 0.3%, blowing a $69 billion (NZ$79 billion) black hole in the federal budget.
Treasurer Jim Chalmers has consistently dismissed calls to lower the tax excise, instead boosting compliance resources by more than AU$340 million (NZ$389.2 million) in the past two budgets.
Enforcement agents had seized more than 2.5 billion individual cigarettes at the border during the last financial year, Australian Border Force Commissioner Gavan Reynolds said.
"We've been extremely busy over the last year and a half in particular," he said.
The amount of loose tobacco leaf intercepted at the border increased 38 per cent, amounting to 439 tonnes, which was equivalent to $4.4 billion (NZ$5 billion) worth of tobacco duties that would have been evaded.
"But of course, it's not just on the border," Commissioner Reynolds said.
"We're also working with our international partners to disrupt the illicit tobacco trade before it gets to Australia. So it's pre the border, it's at the border and post the border, with the newly established national disruption group."
But One Nation Senator Malcolm Roberts questioned how Border Force was confident its efforts to reduce the amount of illicit tobacco entering the country were effective, without knowing the total reduction in illegal tobacco to pass through the border.
"It's only through breaking the criminal syndicates that we can reduce the scourge of illicit tobacco," Commissioner Reynolds responded.
Senator Roberts said he knew police officers in Queensland who were themselves buying illicit tobacco because legitimate cigarettes were too expensive.
"Some people would argue that it's only by cutting excise back to sensible levels that would break that because people now find it's worth going to the criminals to get their tobacco," he said.
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