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Minister of Transport Michael Wood has announced fines will increase to $150 from $80 from the end of April.
Nearly two dozen people died and more than 70 were seriously injured between 2015 and 2019 because they were distracted by their phone, Wood said.
And that was likely to be under-reported, as it could be difficult for police to detect phone use when they attended crashes, he said.
Using a mobile phone while driving will continue to attract 20 demerit points - accumulating 100 demerits points from driving offences within two years results in a loss of licence for three months.
Forty-thousand tickets were given out for the offence last year.
Automobile Association spokesperson Dylan Thomsen told Morning Report he hoped the change would make a difference.
"I think though, it is not going to make a difference just on its own. It's going to need to be partnered up with some other measures and we have to look at reviewing and thinking about how we approach driving penalties right across the board. Not just cellphone use."
However, the change gave "the opportunity to send a stronger message and hopefully get some people out there to think about what they're doing and change their behaviour", he said.
"The key thing is we have to get people to realise it is risky. At the moment there's a lot of people who don't see any risk in doing it so they feel comfortable in doing it."
Technology was the problem, Thomsen said.
"If we can get the technology to by default go into a driving mode, I think that will take away the temptation for a lot of people. Because if you don't hear the phone ring or ping ... then you don't feel that urge to pick the phone up and respond.
"Unfortunately for a lot of people, it's really hard to break that temptation."