They Knew. Now They Want Modelling.

The government demands evidence before changing nicotine policy. Its own documents make the case for applying that standard to the policy already in place.

In May, I published They Knew: The Government’s Own Documents Predicted Australia’s Vape Disaster. Its central argument was that the risks associated with Australia’s vaping restrictions were already visible within the government’s own regulatory process. The latest argument about modelling makes those documents relevant all over again.

If governments expect proposed reforms to be supported by evidence about smoking, illicit supply and public health, Australians should expect the same evidence from those defending the existing system. That expectation should hardly be controversial, yet much of the debate proceeds as though changing policy requires proof, while continuing policy requires only confidence.

On 7 September, Health Minister Mark Butler was asked on ABC Radio National whether the government had modelled the effect of reducing tobacco excise on smoking rates. He criticised the opposition’s lack of smoking-impact modelling. Pressed about the government’s own work, he answered affirmatively in general terms and invoked the international evidence that price discourages smoking. He also acknowledged that Australia’s illegal market had changed the dynamics, but the interview did not identify a published comparison showing the health consequences of alternative excise settings. Department of Health interview transcript.

That acknowledgment should be the beginning of the discussion. Once the market changes, the policy needs to be tested against the market that exists, which means examining tobacco taxation and vaping restrictions together. A smoker deciding what to buy encounters prices, availability, convenience and product preferences. Government may administer tobacco excise and therapeutic vaping through different systems, but consumers experience them as connected choices.

Making legal cigarettes more expensive may encourage quitting, but it may also encourage illicit purchasing. Making legal vaping less accessible may discourage nicotine use, but it may also make it harder for someone to remain away from cigarettes. The relative size of those effects is precisely what a serious policy assessment should investigate.

The original vaping impact analysis recognised part of this problem. On page 91, it expressly acknowledged black-market growth as a legitimate risk of tighter regulation. Its consultation section also recorded concerns that flavour restrictions could send consumers back to cigarettes or towards illicit suppliers. Those relapse concerns were stakeholder warnings recorded by the TGA, rather than quantified predictions of how many people would return to smoking. TGA, 2023 vaping impact analysis.

That distinction matters. A warning does not establish the eventual scale of harm, but once the warning is documented, government should explain how it assessed the risk, what it did to mitigate it, and what subsequent evidence shows. Listing a potential harm in an impact assessment is not the same as demonstrating that the chosen policy minimises it.

Nor would it be accurate to claim that government conducted no assessment. The Office of Impact Analysis rated the vaping assessment “good practice”, while identifying room for stronger analysis of evaluation and alternatives to government action. The question now is whether the policy’s central assumptions have survived contact with actual behaviour. Office of Impact Analysis assessment.

Treasury’s released documents raise a closely related issue. Material concerning the modelling considered around the 2023–24 Budget identified omissions including substitution into vaping and the black economy. It also distinguished questions the approaches could not answer, including whether consumers quit, reduced smoking or avoided starting. These historical documents cannot tell us everything contained in today’s government advice, but they explain why a general assurance that modelling exists is insufficient. Treasury, FOI 3858, pp. 9–10.

Australians need to know what the modelling measures. A fall in legal cigarette purchases can represent several different outcomes: someone may have quit smoking, switched to vaping, reduced consumption or found an illicit supplier. Those outcomes have different implications for health, revenue and enforcement, and treating them as equivalent would obscure the very behaviour policy needs to understand.

The latest evidence makes this distinction harder for the government to avoid. The Australian Institute of Health and Welfare reports that daily smoking among people aged 14 and over fell from 8.3 per cent in 2022–23 to 5.6 per cent in 2025. The same survey reports that recent illicit tobacco use among current smokers rose from 16.7 per cent to 34 per cent more than doubling. AIHW, 2025 survey findings.

The government cannot claim the first figure as proof its reforms worked while treating the second as someone else’s problem. These findings do not isolate the effects of individual policies. They show falling daily smoking alongside a substantial expansion in illicit purchasing among those who still smoke. Presenting the decline as vindication of the current framework leaves its growing failure to keep those purchases within regulated supply unanswered.

The fiscal evidence is equally difficult to dismiss. The Parliamentary Budget Office reports that the forecast for tobacco excise revenue in 2026–27 was revised from $14.7 billion in the 2023–24 Budget to $3.6 billion in the 2026–27 Budget. Its analysis identifies movement into illicit tobacco as a significant factor in declining revenue. Revenue is not the purpose of public health, and successful quitting should reduce tobacco receipts. But when purchasing moves outside the taxed market, lost revenue cannot automatically be counted as a health achievement. PBO, 2026–27 Medium-Term Budget Outlook.

Supporters of excise reductions also have obligations here. The PBO’s nicotine-pricing methodology, updated on 3 September, includes substitution between products and legal and illicit channels. However, it explicitly limits its analysis to fiscal effects and does not quantify broader health outcomes or changes in smoking and vaping prevalence. Its assumptions include a broadly stable proportion of nicotine consumers and no illicit-market price response to policy, with the PBO openly acknowledging uncertainty around these assumptions. PBO, Nicotine prices.

A favourable costing therefore cannot prove that an excise cut will improve public health. But the limitations of a proposed reform’s costing do not validate the existing policy either. The appropriate response is to compare the alternatives properly.

That comparison must also use the current vaping framework. Since October 2024, eligible adults have been able to obtain therapeutic vapes containing up to 20 mg/mL nicotine without a prescription through participating pharmacies, subject to consultation, conditions and state or territory law. Describing all legal access as prescription-only would be inaccurate, but the practical question remains whether that pathway reaches enough consumers to achieve its intended purpose. TGA, information for pharmacists.

Legal availability on paper is only the starting point. Evaluation should examine affordability, pharmacy participation, product suitability and the proportion of consumers actually obtaining products through lawful supply. It should also examine what happens to people who leave that pathway: whether they stop using nicotine, buy illicit vapes, return to smoking or continue both smoking and vaping. Without those distinctions, a reduction in visible vaping can conceal outcomes with very different health consequences.

A credible independent assessment would compare the present system with an excise freeze, reductions of different sizes, and alternative forms of regulated adult access to vaping. It would test youth uptake, quitting, relapse, illicit purchasing, industry pricing and enforcement costs. It would allow criminal suppliers to respond and consumers to behave differently from the way policymakers hope they will behave. It would publish uncertainty rather than bury it beneath a single headline number and, most importantly, identify what evidence would justify changing course.

Governments must often act before every uncertainty is resolved, but that makes evaluation more important after implementation. It does not entitle the chosen policy to permanent protection from comparison. The warnings discussed in my original article should now form part of that evaluation: which risks occurred, how large were they, and did the benefits outweigh them? Those are questions that can be investigated without pretending that every restriction is harmful or every liberalisation is beneficial.

The government is right to demand evidence about the consequences of reform, and it should publish the same quality of evidence about the consequences of continuing. The risks were documented before implementation. Australians now deserve to see how those risks have been measured, what the results show, and whether a different approach would reduce more harm.