A tax on tobacco has long seemed like a great idea, at least to the politicians who put them in place. It would deter smokers. And raise revenue at the same time. What could possibly go wrong?

Lately, a lot. Because gangland warfare over illegal tobacco has been ramping up in Victoria. In February, an innocent young woman was killed, after becoming trapped inside a townhouse targeted in a firebombing attack.

Today, senior economics correspondent Shane Wright, on whether these unintended consequences will pressure the government to reduce its tobacco tax. And whether it can crack down on the illegal market, and the violence.