How smoking makes people poorer—and what can be done about it

Australia and several other countries impose some of the highest cigarette prices globally, often exceeding $65 per pack. These taxes, driven by increased excise rates since 2010, aim to curb smoking rates, though critics argue they disproportionately burden low-income households. Smoking half a pack daily costs about A$7,000 to A$12,000 annually in Australia, depending on sourcing.

Researchers have identified a lesser-known consequence of smoking called "smoking-induced deprivation," wherein the financial strain from purchasing cigarettes leaves individuals without enough for necessities like food, rent, or utilities. A study published in the journal Addiction analyzed data from 26,888 smokers in Australia, England, Canada, and the United States between 2016 and 2024.

The findings indicate that the proportion of smokers reporting smoking-induced deprivation has risen in all four countries since 2016, with Australia experiencing the highest rate at 18.3% in 2024. Despite cigarette prices in Australia increasing by 81% from 2016 to 2024, the overall rate of smoking-induced deprivation among the Australian population actually decreased from 1.9% in 2016 to 1.5% in 2025.

This decline can be attributed to a significant drop in smoking rates overall, falling from 15.6% in 2016 to 8.2% in 2024, with an estimated rate of 9.4% in 2024. The study suggests that while high cigarette prices contribute to smoking-induced deprivation, they also deter smoking initiation, particularly among vulnerable populations.

Researchers argue that reducing tobacco taxes, despite providing short-term financial relief for some, would have detrimental long-term health and economic impacts. Instead, they propose redirecting tobacco tax revenue to fund cessation programs, making cessation aids free, and supporting cessation efforts within disadvantaged communities.