Unhealthy public health

What has changed is the illegal tobacco market, now accounting for 20.7% of all tobacco consumed in Australia and costing the government $3.4 billion in lost taxes. What's more, illegal tobacco has become a worldwide industry, costing governments $40-50bn in lost tax revenue every year due to the ramping up of tobacco taxes around the world. Australia's public health evangelism has contributed to this.

The key driver of the illegal market is affordability – as tax increases make cigarettes less affordable, consumers begin to seek cheaper options. As they become 10% more expensive relative to incomes, on average illegal trade grows by 7%.

Of course, illegal traffickers don't pay taxes, so there is less money for governments to spend on enforcing anti-smuggling measures at ports and land borders, potentially exacerbating the illegal trade problem. But this is where the absence of other considerations becomes apparent. Enforcement might slow it down, but it can never be the solution, just as it is unable to block illegal drugs and guns.

Public health people only see one dimension though – prohibit cigarettes and people will stop smoking. What they don't understand is that smoking is driven by demand, not supply, which makes it an economic issue; smugglers are merely supplying the market. Smokers are also concentrated among lower income groups, which means it is also a social issue. And while smokers are not organised into a political force now, prohibiting cigarettes is very likely to change that. But if you are a public health person, you probably won't understand that either.