Australia's Finance Minister will adopt a Labor Party policy to boost tobacco excise tax over the next four years, he says.
Federal Treasurer Scott Morrison will hand down Australia's budget tonight ahead of the country's national elections in September.
The government said it was a new, positive plan to create jobs and promote economic growth, but it was also adopting one of its opposition's biggest proposed tax increases.
Finance Minister Mathias Cormann confirmed a 12.5 percent annual increase in tobacco excise over four years to 2020, which would lift the price of 25 cigarettes to more than $43.60 ($AU40) by 2020.
That compared to an average $22.80 cost for 20 cigarettes in January in New Zealand, which would be $28.50 for 25.
Mr Cormann said the revenue from that, at over $AU28 billion, would be far less than the $AU48 billion Labor MPs expected it would raise over 10 years, calling the party's budget plans into question.
In November, Labor's health spokeswoman Catherine King said the increase would bring Australia into line with the excise rates of about 33 other countries.
Labor Treasury spokesman Chris Bowen accused the government of leaking the figures to try to cover its embarrassment for adopting Labor's policy.