Smokers could be paying up to $40 for a packet of cigarettes within four years after the Turnbull government introduced to parliament legislation hiking the tobacco excise from September 2017.
The excise will increase by 12.5 per cent each year up to and including 2020.
"Research has shown (taxation) is one of the most effective ways of reducing tobacco consumption and preventing the uptake of smoking," Revenue Minister Kelly O'Dwyer told parliament on Wednesday.
Ms O'Dwyer said smoking was a significant health problem with about 1.8 million people or two thirds of Australian smokers expected to die of smoking-related causes if they continued to smoke.
"Higher prices encourage smokers to quit," she said.
Labor is expected to back the legislation, after announcing similar measures before the July 2 election.
