One of the world’s leading harm reduction advocates sees disaster unfolding in Australia. Sky-high tobacco taxes and sweeping restrictions on nicotine vaping were meant to reduce harm—but instead, they’ve fueled a booming illicit market, siphoned billions in public revenue, and triggered a wave of violence tied to organized crime. In this GFN Interviews, Dr. Alex Wodak explains how Australia’s approach has veered into “quasi prohibition,” driving demand into the black market and overwhelming enforcement.
Featuring:
DR. ALEX WODAK
Physician, Internal Medicine
Former Director, Alcohol and Drug Services
St Vincent’s Hospital, Sydney
Board Member, Australian THR Association
@AlexWodak
Transcription:
00:02 - 01:35
[Brent Stafford]
Hi, I'm Brent Stafford and welcome to another edition of RegWatch on GFN.TV. Australia is in crisis thanks to sky-high tobacco taxes and a near-complete ban on nicotine vaping products. The land down under has become ground zero in a violent and destructive war over illegal tobacco. In less than a decade, overzealous tobacco control policies have created the conditions for nearly $10 billion to flow from the national budget into the hands of organized crime. But while tobacco and nicotine prohibition may be politically attractive, the resulting chaos, including over 300 fire bombings and a wave of violent attacks, proves that prohibition doesn't reduce harm. It creates it. Joining us today to unpack this crisis is Dr. Alex Wodak. Dr. Wodak is a physician specializing in internal medicine and the former director of the Alcohol and Drug Service at St. Vincent's Hospital in Sydney, Australia, where he worked from 1982 to 2012. During his career, Dr. Wodak helped establish Australia's first needle syringe program and first supervised injecting facility, both when they were pre-legal. He also served as president of the International Harm Reduction Association. Dr. Wodak, it's great to see you again. Thanks for coming back on the show.
01:36 - 01:37
[Alex Wodak]
Thank you. It's a great pleasure.
01:38 - 01:44
[Brent Stafford]
So Dr. Wodak, is it fair to say that you helped shape the modern harm reduction movement?
01:45 - 04:02
[Alex Wodak]
Yes, but it's also important to remember that harm reduction has a very long track record, not only in health policy, especially public health, but also in general policy. Going back decades, centuries, millennia even, But it got rejuvenated when we were confronted with the HIV epidemic, which was first recognized on June 5, 1981. And then it took us a year or two to realize the centrality of people who inject drugs to controlling HIV infection in the general population. untreatable and not preventable really. We didn't know much about it. There was so much we had to learn about it. But the biggest threat was HIV spreading among and then from people who inject drugs to low risk people in the general community. So I got very involved in harm reduction then, first locally, then nationally, and then regionally in Southeast Asia, and then throughout the whole world. And over the next 30 years, I did a lot of short-term consultancies, especially in low- and middle-income countries I must have gone to. 20, 30, 40 countries for international organisations, UN organisations like World Health Organisation advocating for harm reduction and it was very successful because without applying harm reduction we wouldn't have got to where we are today where HIV is really under or was under pretty good control until 47th president came along of the United States and upturned everything. So it's at least in outside sub-Saharan Africa, we had good control. Still a big problem in sub-Saharan Africa.
04:03 - 04:10
[Brent Stafford]
So you know what prohibition looks like. Is Australia now operating under a form of nicotine prohibition?
04:11 - 04:48
[Alex Wodak]
technically Australia doesn't have nicotine prohibition because nicotine products are still legally in theory available but in effect it is a form of prohibition so I use the term quasi prohibition because although they're legally available They're severely restricted and so severely restricted that people who want to get them have to go to the black market. And they do in very large numbers, much larger numbers than ever before.
04:49 - 04:59
[Brent Stafford]
So in 2024, Australia brought in what a near complete ban on nicotine vapes, as you said, heavily restricted. Was that a sound policy?
05:01 - 05:54
[Alex Wodak]
No, it was nonsense at the time. And we will recognize that. But it's a situation I think we can draw a lot of parallels with the situation with climate change, where there are still people in high places, including the White House, who try to claim that climate change is a hoax. and who bitterly oppose realistic efforts to accelerate the transition from fossil fuels to renewable energy. So this same kind of madness, the hostility to real evidence exists in climate change and it exists in the area we're talking about, nicotine.
05:55 - 06:13
[Brent Stafford]
It's interesting that you bring up climate change and, say, President Trump, because those folks are right-wing Republicans. Is it the right wing in Australia that are pushing these bans, or is it public health that are more on the left and the progressives?
06:13 - 07:04
[Alex Wodak]
It's the second option, it's really the whole health establishment in Australia backs these policies which were introduced in around about 2011 and have been supported when the Conservatives were in federal government in Australia and now the Laborers in government are akin to say the US Democratic Party. So it's across the board but the Support is fragmenting. So these days in Australia, the Labor Party is the last major political party that still supports these policies wholeheartedly. And several other parties now are distancing themselves from these policies.
07:04 - 07:22
[Brent Stafford]
So the policy was brought in because of the challenge of youth vaping, right? There was quite a bit of hysteria, I'd call it, but concern, to be fair. Did the policy, this near-complete nicotine vape ban, meet the challenge of youth use?
07:24 - 10:44
[Alex Wodak]
Look, the policy was very early on when we didn't really have the evidence that we've got available today. um but the policy has separated itself from reality from evidence the more the stronger the evidence has gone both in terms of quantity of evidence and also a quality of evidence so in the opponents of tobacco harm reduction have become more doctrinaire, more dug in and simply ignore the reality that is there in front of their face. So this is a position we're in today where officialism goes along with government and the government is completely hostile to reality. And the reality is really pretty horrible. We've now got increasing indications that smoking is starting to increase in Australia among young people. We have widespread extortion. So criminals and their representatives go to legal cigarette retailers and extort money from them. And if the retailers don't do as the extortionists demand that they do, their premises are firebombed. And we've had... Somewhere around about 300 of these facilities firebombed, mainly but not only in one state, Victoria, but really in other states as well. We have a shortfall of revenue, which is really very serious and growing. And we have this massive black market, which is now for cigarettes and tobacco and vaping, which is now worth more than the market for heroin and cocaine and amphetamines and cannabis. It's ludicrous. And the supporters of opposition's tobacco harm reduction campaign just to dug their heels in and keep on saying the same nonsense. So it's a terrible situation we're in. And I also liken this to what happened in the Soviet Union and its satellites in the 1980s when they were completely dug in, quite entrenched into a social and economic policy that clearly wasn't working, and then suddenly collapsed in around about 1989. And it's, I think, very significant that the meeting that I'll be talking at will be in Warsaw. And it was Warsaw that was the centre of the Warsaw Pact. And it was Poland that really began this process of the collapse of communism when a trade union, a shipbuilders trade union in Gdansk was the first to peel off. And then once that started, it didn't stop. So something similar is going to happen in the tobacco area. We're going to see a sudden collapse.
10:45 - 10:58
[Brent Stafford]
Dr. Wodak, I've got a clip here prepared that we're going to watch. And we first shared it with our viewers back in May of 2024. So almost pretty much two years ago. Let's take a look at this.
11:02 - 12:48
[Video]
Fire tearing through a tobacconist in Melbourne's northern suburbs in the early hours of this morning. Yeah, well, that's all the stuff inside. explosions scattered shrapnel for hundreds of metres across Craigieburn. Police are now investigating if this fire is linked to dozens of others in Victoria, part of an ongoing conflict between organised crime and bikey gangs. A result of criminal syndicates in conflict due to competition for profit derived from the illicit tobacco market. Organised crime gangs are using illegal cigarettes, tobacco and vapes as an ATM to fund their activities like sex trafficking and drug trafficking. For months, tobacconists across Melbourne and regional Victoria have been targeted. Last night's fire in Craigieburn follows blazes in Sunshine, Altona, Croydon and Mowi just since Christmas. It's now pushing the federal government to action. It's launching a new $190 million crackdown on illegal tobacco and vapes nationwide. This will be an end-to-end crackdown to do all that we can to shut down this illegal trafficking at its source before these illegal cigarettes reach Australia's border in the first place. Trying to push them out of tobacconists where vapes in particular are often sold to young people and cut off a revenue stream for organised crime. The government's taken their foot off the pedal and you've allowed over the course of the last 18 months for these organised crime groups to really take hold. A public health problem taking a dangerous turn.
12:49 - 12:51
[Brent Stafford]
So that was two years ago. Has it gotten any better?
12:52 - 14:48
[Alex Wodak]
No, it's got worse. And see, a lot of the things that are very important in this issue don't get widely reported. For example, the legal cigarette retailers, of course, like everyone else, has to pay insurance on their property. Well, now the price of insurance for legal cigarette retailers has gone through the roof. And even in the shops adjoining cigarette retailers, their insurance is unaffordable so this this terrible uh crazy policy is just unraveling and getting worse and worse and having more and more severe unintended negative consequences and uh The remarkable feature about this is that the government and the health establishment pay no attention. They ignore these terrible unintended consequences and get away with it. The press is now, the media in Australia, mainstream media, is now increasingly critical of the policy, but it still has a lot of support among mainstream media. So I'm convinced this is going to collapse, and it'll collapse suddenly, like communism collapsed in the Soviet Union and Eastern Europe. The CIA, which had been following events in the Soviet Union and Eastern Europe, was taken by surprise when communism collapsed so suddenly in that part of the world. And I think the experts in this area in Australia in tobacco policy and so on will also be taken completely by surprise when the inevitable happens and the policy collapses.
14:49 - 14:53
[Brent Stafford]
What share of the nicotine market is now illegal?
14:54 - 15:36
[Alex Wodak]
Authorities now admit that over 50% of the trade in cigarettes in Australia is supplied by the black market. And in the case of vaping, over 90% is supplied. And these are good figures. It's just such a colossal mismatch with reality. People are... who support these policies, often allied to Michael Bloomberg, are in complete denial about it. And here's Michael Bloomberg, who made himself a billionaire based on his expertise in financial services,
15:36 - 16:00
[Brent Stafford]
who is also completely unrealistic about this issue and supports policies which just can never happen dr wodak let me ask you this specifically about the uh vape ban in australia how much of a role do you think that it played in creating this situation this you know illegal tobacco crisis
16:02 - 17:05
[Alex Wodak]
Well, it's played a colossally important role. The fact that we've had different ways of quasi-prohibition of nicotine vapes in Australia really since 2011. It's gone through permutations and changes. Each time its nonsense was exposed, the government changed the rules. But in essence, it hasn't really changed at all. And the people who have been advocating this are going to have a terrible reputational black mark against their names forever as a result of their ignoring reality, ignoring the evidence. That hasn't happened yet, but I think it's inevitable. And many of these people have given their lives, their whole working life, to trying to reduce smoking in Australia. And now, in effect, they are protecting the cigarette.
17:06 - 17:30
[Brent Stafford]
I've got a graphic here from Sydney Morning Herald, which was in a submission that you made to the federal government about the illegal tobacco crisis. Talk to us a little bit about what's been happening here with the excise tax. Just how expensive are cigarettes in Australia and how much of the problem is the tax when it comes to supercharging the black market?
17:31 - 18:54
[Alex Wodak]
So the taxes now represents about 70% of the retail price. And the tax has gone up very rapidly over the last 15 years. And then there was... even an increase last year or maybe this year. And there's a very close correlation between the price or the cigarette excise, the retail price, which is around about $45, $50 for a packet of 20 cigarettes, and then the size of the black market. And the black market, of course, it's always hard to estimate the size of an illicit market. But the black market of cigarettes in Australia, which now includes cigarettes and tobacco once again, that's now colossal. And The estimates are that taxpayers are losing $8 billion to $11 billion a year in government revenue, which now no longer goes to the government, but now is switched over to the illicit market. In other words, criminals get that.
18:54 - 19:07
[Brent Stafford]
It's amazing how much money has been, you know, siphoned off or redirected. And normally governments would react to that kind of an issue pretty quickly. But here they don't seem to be doing that.
19:08 - 21:35
[Alex Wodak]
They don't seem to be doing that, and the Treasurer has said that the cigarette excise will not be decreased. Other people from his political party have said cigarette excise has to decrease, and the whole of the health establishment including the major figures who were the advocates for these policies, have said, no, we can't decrease cigarette excess, which is ludicrous. And their arguments are asinine. They don't really make arguments. They smear opponents like myself as being shills for big tobacco and repeating the tobacco industry narrative. If you agree with the tobacco companies on anything, you're repeating the tobacco industry narrative. If you say that there are seven days in a week and... 52 weeks in the year and 365 days in a year you're repeating that tobacco industry narrative it's it's It's absolutely crazy. And it's exactly the sort of thing that George Orwell talked about all those years ago. And that's the topsy-turvy Alice in Wonderland world that we live in. It's important to realise how different this is from the rest of health policies. in Australia. Australia has generally got very sound, very effective, very pragmatic health policies. So if you look at standard parameters like life expectancy, maternal mortality, infant mortality, all the standard things we look at. Australia is in the top half dozen, at least in the top dozen, if not the top half dozen, in all of those parameters internationally represented. And we spend about 8% of GDP on health compared to, say, 17% of GDP on health that the United States spends. And Australian men and women live two or three years longer than US men and women because we have sound health policies, except in this one area.
21:36 - 21:43
[Brent Stafford]
Now, public health and tobacco control in Australia aren't going to be very amenable to any argument like that.
21:44 - 24:36
[Alex Wodak]
Well, they also want to survive, and they've put many decades into building their organizations, into building their movement. and they see they see this as an existential threat so they link up with michael bloomberg and other prohibitionists bill gates surprisingly and they get money from them we don't know how much and we don't know who gets the money but they we know that um Bloomberg himself has said to have donated up to $1.6 billion to an international worker, a network of these organizations. And so they're surviving. So the smokers want to survive. The producers want to survive. the cigarette companies, and also tobacco control wants to survive. But the tobacco control movement is going to die out and collapse. I can see that coming. Clive Bates, who we all love and admire, said a couple of years ago that we should be paying much more attention to the Harvard Review of Business and much less attention to the New England Journal of Medicine. And he's absolutely right that the health debate hasn't been resolved and will never be resolved. Our opponents are never going to admit that what they were saying was nonsense. So we're never going to have a win on that. But in the meantime, the The market for nicotine globally is rapidly changing from combustible cigarettes to a range of smoke-free alternatives, and that is probably going to accelerate. In the first decade or decade and a half of this struggle, say up until 2020, what we had was that about... 10% of the global market for nicotine moved from combustible cigarettes to a range of smoke-free alternatives. And I think in the second decade and a half, that movement is going to accelerate. It is accelerating. More and more cigarette companies are now moving into this area, and they're getting better and better at making and selling a range of smoke-free alternatives, which consumers like. And there are 1.1 billion consumers across the world. So they're shifting their market. And if they don't shift, they'll go out the door like Kodak. And if they do shift, they'll continue to prosper.
24:38 - 25:02
[Brent Stafford]
Dr. Wodak, as you know, the 13th edition of the Global Forum on Nicotine, the annual conference on safer nicotine products and tobacco harm reduction, takes place again this year in Warsaw, Poland from June 3 to 5, 2026. The conference theme is Prohibition and Public Health. In your mind, is there a public health consensus on nicotine prohibition?
25:03 - 26:22
[Alex Wodak]
No, I don't think we can pretend that there's a consensus about this, but there is strong and growing support amongst public health-oriented people for saying the sorts of things that I've been saying. And that's been growing for a long while. We've had, interestingly enough, we've had people moving from the tobacco control orthodoxy, the Bloomberg narrative. We've had people moving over towards unproduction, but we haven't seen the reverse. No one moves in the opposite direction because they realize that it's fantasy, it's nonsense. And once you sit down and look at this, it's very, very impressive. And I think we have to stop demonizing the tobacco companies. There was a point when the tobacco companies deserved every bit of the But now they realize that they have to move not only for humanitarian reasons, but also for commercial reasons. And we should welcome that. Instead, what's happening is that the opponents of tobacco harm reduction are really protecting the cigarette.