Associate Health Minister spokesperson says $216 million set aside to cover excise cuts for heated tobacco is based on Treasury estimates

The allocation makes up for halving the tax on the devices - which have been found to not meet new vaping laws.

Philip Morris, the country's sole supplier, says it's a miscalculation and only six-million-dollars in tax was collected last year.

A spokesperson for Minister Casey Costello points to previous statements the 216-million-dollars is a contingency - rather than Budget spending.

She says the modelled cost is uncertain because it's based on device usage in Japan, where nicotine vapes are banned.