CIGARETTES would rise to $20 a packet within three years under the national health plan, bringing Australia into line with other nations such as Britain and Ireland.
"Increasing prices is one of the most effective measures that government can take to reduce tobacco consumption," the Preventative Health Taskforce said.
But the Government is yet to endorse the proposal, preferring to wait for a major inquiry into the nation's tax system.
"I don't intend to tip my hand one way or the other," Treasurer Wayne Swan said.
"These are all important matters that are being considered through the Henry Review."
Tobacco giant British American Tobacco urged the Government to be mindful of smokers "who manage a budget and have made an informed choice to smoke".
But the taskforce said there should be no mercy for tobacco companies, urging legal action against them to recover money for health costs.
It also called for a ban on smoking in prisons, which could cause a backlash from nicotine-addicted inmates.
And children could be banned from seeing films starring renowned smokers Brad Pitt and Russell Crowe under a proposal to make smoking a classifiable element under censorship rules.
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