Cigarettes could rise to $40 a packet under a proposal the federal government is considering to pay for income tax cuts.
It was believed that Treasury was already looking at costings for various options and Labor had said that its proposed tobacco excise hike would raise $47 billion in revenue in a decade, the Daily Telegraph reported.
A government source told the newspaper that a proposal to push up the tobacco excise in the May Budget could be taken to the Expenditure Review Committee.
Labor announced that the party would increase the excise if it won office to pay for the Gonski school funding policy.
Senator Ricky Muir said it was the first he had heard that the government was considering slugging smokers to pay for income tax cuts, although there had been whispers.
“I think it’s at the point now where raising the price of cigarettes is proven not really to stop the diehard smokers who have been doing it for a long time,” he told the Seven Network.
The Australian Motoring Enthusiast Party Senator said it was “something I will get to look into in the future” providing he still held his Senate seat.