Jim Chalmers is facing pressure to use the May 12 budget to give more cash to the states and territories so they can ramp up their fight against the illegal tobacco trade amid signs a near-decade long collapse in federal government cigarette excise is easing. This masthead can reveal Chalmers is being pressed to supply up to $300 million in extra support while the legal tobacco trade is calling for a cut in excise levels, in a move that it says would reduce the nation’s inflation rate while undermining the organised crime-dominated illegal trade. Tobacco excise, which as recently as 2020 was the federal government’s fourth-largest tax source, has collapsed over the past decade. By 2029, an estimated $65 billion in excise has been lost despite tougher border controls and large increases in the tax rates on cigarettes. The mid-year update itself, released in mid-December, sliced $8 billion from what had been expected in his pre-election budget released in March 2025.…