When “Hold the Course” Means Ignoring Where the Course Has Taken Us

There is a sentence near the end of the ABC investigation into Australia’s illicit tobacco crisis that, for me, captures the central problem with the Australian debate. Professor Becky Freeman says, “What we’re doing is working. We need to hold the course.” But after reading the ABC’s own account of what is happening in Australia, I am left with a very different question: what exactly are we holding the course towards?

The ABC investigation is one of the more revealing examinations of Australia’s nicotine market because it places several realities side by side that are too often discussed separately. Legal tobacco consumption has fallen dramatically, and on its own that looks like an extraordinary tobacco-control success, but when the ABC adds the wastewater data, the picture becomes considerably more complicated. There is now an enormous gap between nicotine obtained through the legal tobacco market and nicotine detected through wastewater, and the ABS estimates that around 80 per cent of nicotine consumed in Australia comes from illicit sources, although importantly that does not mean 80 per cent of cigarettes are illicit because wastewater captures nicotine from different products and cannot directly identify its source.

That distinction matters, but so does the underlying message. Australians have not simply behaved as policymakers expected them to behave as legal tobacco became progressively more expensive and alternative nicotine products became progressively more restricted. Instead, a parallel market has emerged, and it is enormous. The office of the Illicit Tobacco and E-cigarette Commissioner estimates that excise and duty evasion cost Australia up to $11.8 billion in 2024–25, the federal budget has wiped $8 billion from expected tobacco excise revenue over the next five years, and Border Force seized 2.66 billion illicit cigarettes last year compared with 480 million in 2016.

Then there are vapes, where the failure of the legal market is arguably even more striking. The ABC reports that 97 per cent of e-cigarettes sold in Australia are illicit, representing a market worth approximately $1.6 billion. Think about that number for a moment: 97 per cent. When almost an entire consumer market operates outside the legal system, describing the problem simply as consumer non-compliance becomes increasingly difficult, because at some point we have to examine the architecture of the system itself.

Australia has created an extraordinary contradiction. A person can walk into thousands of ordinary retailers and legally purchase cigarettes, the nicotine product responsible for the overwhelming majority of tobacco-related disease, but an adult smoker wanting to switch to a substantially lower-risk nicotine product faces a far more restrictive pathway. The predictable consequence is not necessarily abstinence; it can be substitution into an illegal market.

That is why one of the most important contributions in the ABC article comes from criminologist Dr James Martin, who describes what is happening as a “mass consumer revolt” against cigarette prices and questions whether policing can suppress an illicit market of this magnitude because removing one retailer or even one organised-crime group simply creates opportunities for competitors. The experience of law enforcement described by the ABC should make policymakers uncomfortable because after around 500 arrests, one Victorian detective told the ABC he was unsure whether authorities were making a dent, adding that organised crime groups have budgets larger than law-enforcement agencies.

Yet the policy response remains heavily focused on doing more of the same: more enforcement, more penalties, more restrictions and more attempts to make supply disappear. Organised crime obviously needs to be investigated and prosecuted, and businesses openly selling illicit products cannot simply be ignored, but enforcement deals with supply while doing very little to make the underlying demand disappear. That distinction becomes enormously important when millions of Australians use nicotine, because if demand remains substantial while legal supply is made increasingly expensive, unattractive or inaccessible, somebody eventually discovers that supplying that demand is profitable. Australia appears to have made that opportunity extraordinarily profitable.

This is where Becky Freeman’s comments become particularly interesting. When the discussion turns to lower-risk alternatives such as vaping and nicotine pouches, Freeman says: “The only way I would be comfortable with these products being available for Australians to use is if they had that stamp of approval that they were safe and effective for smoking cessation. And no company has.” At first glance that sounds entirely reasonable. Who could object to wanting evidence? I certainly don’t, but there is an important problem with the framing because the absence of a particular regulatory stamp of approval is not the same thing as the absence of scientific evidence.

And the science has moved.

The evidence for nicotine vaping as a smoking-cessation tool is no longer confined to anecdotes from consumers or arguments from vaping advocates. Systematic reviews and randomised controlled trials have built a substantial evidence base showing that nicotine e-cigarettes can help adults stop smoking, including evidence that they can outperform conventional nicotine replacement therapy. That does not mean vaping is harmless, that people who do not smoke should start vaping, that youth vaping should be ignored or that every illicit vape sold in Australia is safe. It means something much simpler and much more important: for an adult who smokes cigarettes and is otherwise likely to continue smoking, vaping can provide an effective route away from combustible tobacco.

That distinction matters because the relevant public-health question for a smoker is not whether vaping is completely safe. Almost nothing is completely safe. The meaningful question is what happens to risk when somebody who would otherwise continue inhaling cigarette smoke switches completely to a non-combustible alternative. That is the essence of harm reduction: not pretending that risk can always be reduced to zero, but helping people move from greater risk towards substantially less risk.

There is also a strange contradiction in demanding that lower-risk nicotine alternatives first prove themselves “safe and effective” while cigarettes remain legally available without having to demonstrate that they are safe or effective for anything. The most dangerous nicotine product enjoys the easiest route to the Australian consumer, while products capable of replacing it face greater barriers. That is backwards risk regulation. Regulation should broadly become more stringent as the danger increases, not less, yet with nicotine Australia has constructed something close to the opposite: cigarettes remain widely available, vapes are restricted to pharmacies, other non-combustible alternatives remain heavily restricted, and the illegal market supplies much of what the regulated market does not.

The ABC article also illustrates why falling smoking prevalence, while welcome, cannot be the only measure by which the success of nicotine policy is judged. Suppose smoking prevalence falls while organised crime captures billions of dollars, almost the entire vaping market becomes illegal, tobacco excise revenue collapses, retailers are firebombed, criminal networks fight over distribution and adults who want alternatives increasingly obtain unregulated products from criminals rather than regulated products from legitimate businesses. Would we really conclude that none of those outcomes matters because one headline number moved in the desired direction? Of course not. Public policy has to consider the entire system, including the consequences it did not intend to create.

That is what contrasts with the end of the ABC article so revealing. Freeman says, “We need to hold the course,” while Illicit Tobacco and E-cigarette Commissioner Amber Shuhyta offers a very different philosophy, arguing for diversity of thinking, contested ideas and different perspectives because looking through only one lens will not produce the solution Australia needs. That may be the most important lesson in the entire debate because Australia does not need another ideological battle between tobacco control and tobacco harm reduction; it needs an honest examination of outcomes.

What is working, what isn’t working, what has changed, what did policymakers predict, what actually happened, what unintended consequences have emerged and, most importantly, what combination of policies will minimise total harm? The answer may involve stronger enforcement against organised crime, better licensing, reconsideration of excise settings and substantially better cessation support, but it should also involve a serious examination of whether Australia makes substantially lower-risk nicotine products unnecessarily difficult for adults who smoke to obtain legally.

The objective should never be to protect a particular tobacco-control model. The objective should be to reduce the disease, disability and premature death caused by smoking, and those are not necessarily the same thing.

That is where the ABC’s graphs become so powerful because they tell us something ideology cannot erase: people adapt, markets adapt and criminals adapt. Consumers respond to price, availability, convenience and preference, while policy does not operate in a laboratory where everything else remains constant. Push hard enough on one part of a market and pressure emerges somewhere else. Australia pushed legal cigarette prices extraordinarily high while making alternative nicotine products extraordinarily difficult to obtain through ordinary legal channels. Demand did not simply disappear. A huge illicit market filled much of the gap.

Now Australia is spending hundreds of millions of dollars trying to suppress that market while debating whether the policies that helped create its extraordinary profitability should even be reconsidered. That should trouble people on every side of this debate, because the most dangerous words in public policy are sometimes not we got it wrong, but “hold the course.”

Changing course when evidence and circumstances change is not failure; it is what evidence-based policy is supposed to do. The real failure would be knowing that the environment has fundamentally changed, watching billions of dollars flow into organised crime, watching almost the entire vaping market become illicit, watching law enforcement struggle to contain it, watching scientific evidence develop around alternatives to cigarettes, and still deciding that reconsidering the policy itself is unacceptable.

There comes a point when a black market stops being evidence that consumers are refusing to obey policy and starts becoming evidence that policy is refusing to understand consumers. Australia may have reached that point, and if we genuinely want fewer Australians smoking, the question should no longer be whether we defend the course chosen years ago, but whether that course still takes us where we want to go.

Evidence-based policy is not the art of never changing your mind. It is having the courage to change your mind when the evidence changes. And perhaps the most profound lesson from Australia’s illicit nicotine crisis is even simpler: when reality repeatedly refuses to follow the policy, eventually we have to stop blaming reality and start questioning the policy.