But, its a different story for Generation X, with illicit drug use rising among Australians aged over 40 - an age-bracket most resistant to the long-term overall decline in daily smoking rates.

The National Drug Strategy Household Survey, conducted every three years, includes information on nearly 24,000 Australian's use of, and attitudes toward, tobacco, alcohol and illicit drugs.

The number of Australians using illicit drugs and misusing prescription drugs has been rising gradually, climbing from 13.4 per cent in 2007 to 15.6 per cent or 3.1 million people in 2016.

For the first time this report demonstrated Australians felt methamphetamines use was more of a concern to the general community than excessive drinking.

It was the drug most likely to be associated with a 'drug problem', however, the most common recently used drugs were cannabis (10%), misuse of pharmaceuticals (5%), cocaine (3%), and ecstasy (2%).

Australian Institute of Health and Welfare spokesman, Matthew James, said figures showed those using ice did so much more frequently than ecstasy or cocaine users.

While only 2 per cent and 3 per cent of ecstasy and cocaine users used weekly or more often, this was 32 per cent for ice users.

He said there had been a marked change in people's attitudes toward specific drug types and people overall were now "less concerned about the impact of cannabis, heroin and cocaine than in the past."

Compared with three years ago, the number of people drinking alcohol daily and weekly is falling.

However, 1 in 4 of us will still drink to excess at least once a month - putting back more than five standard drinks in one sitting.

Young Australians are continuing to delay the age they first try alcohol and cigarettes. In In 1998 the average age was about 14 whereas by 2016 this was around 16.

And in three years a whopping 10 per cent more 12-17 years old were abstaining from drinking at all.

The number of daily smokers was nearly halved between 1991 and 2013, falling from 24 to 13 per cent.

For the the first time in two decades the report reveals this progress has plateaued.

In the three years to 2016 there was a 1 per cent improvement with 12 per cent of Australians still smoking daily.

What is good news is the proportion of Australians who have never smoked continues to rise and grew by 2 per cent over the period.

"In particular, fewer teenagers are taking up smoking—the proportion who have never smoked rose from 95 per cent in 2013 to 98 per cent in 2016," Mr James said.

Males were still more likely than females to smoke, across all age groups.

But interestingly, smokers were shown to be shifting away from tailored cigarettes with 3 per cent more smokers opting for roll-your-own cigarettes.

The survey also canvassed use of electronic cigarettes and found 31 per cent of smokers had tried it, but the majority, 20 per cent, were one-time-only users.

Tobacco contributes to more drug-related hospitalisations and deaths than alcohol and illicit drug use combined.

However, the report reveals proportion of people perceived tobacco as the drug that causes the most deaths fell from 2013 to 2016.