"Plain packaging" on cigarettes

came into Australia some time ago now. It was hailed as a "success". Sales of cigarettes dropped - or did they?
There is a piece in the paper this morning saying that the amount of illegal tobacco being consumed in Australia has risen dramatically. The cost to the government in lost tobacco revenue is enormous of course.
Surprised? No, neither am I. People won't stop smoking simply because the packaging changes. The last price hike was just so great that people will look for cheaper sources. After all, cigarettes in Australia cost about seven times as much as they do in China and it is pretty much the same through the rest of Asia.
There have to be other ways of encouraging people not to smoke. The "it's legal and therefore I'm allowed to do it" argument no longer makes sense. The medical evidence that smoking is bad for you is now so strong that more of an effort does need to be made. 
The "it's my choice" argument makes no sense either.
Smoking affects the health of the smoker AND the health of other people. I have had to ingest far too much secondary smoke in my lifetime. It has undoubtedly compromised my health and I resent that. I cannot be near cigarette smoke now without finding it difficult to breathe, my eyes water and my nose starts to run. I have never as much as tried to smoke a cigarette and I do not want to. I believe I have the right not to ingest the secondary smoke from other people's cigarettes.
There were heavy smokers at the universities I attended. In staff meetings the non-smokers would sit on one side and we would open the windows - hoping for some fresh air. The smokers still smoked - on one occasion after being told that the director of the research unit had just been diagnosed with a smoking related terminal cancer.
As a student at another university there was a member of staff who chain smoked his way through lectures - until, one year, one of the students pointed out that there was a "no smoking" sign in the lecture theatre he liked to use. Then he would stop the lecture half way through and go out and have a cigarette. It made him abrupt and impatient. He was a "three pack a day" man.
One of his colleagues, who smoked almost as heavily as he did, supervised me at one point. When the arrangements for supervision were made we agreed that we would meet in the library - where he could not smoke. The professor who had organised my supervision had told him bluntly, "You will not smoke around Cat. She is allergic." (He was also unable to tolerate cigarette smoke and had instituted a "no smoking in staff meetings" rule for the staff who did not smoke.)
It's not nice and really amounts to an assault on other people. So, how do we get people to kick the habit? We probably won't because nicotine is incredibly addictive. Many people never manage to do it.
Is it time to register smokers? Should they pay more for health care? Should their life insurance policies be renewed? Should they pay a greater contribution to their compulsory superannuation? 
It is no good making tobacco illegal. We have tried that with other drugs and people will still use them.
We could do more. Perhaps if the government realises how much revenue is being lost they will.