David Moncrieff (Hughes, Australian Labor Party) | Hansard source

Illicit tobacco has become one of the most pressing organised crime challenges facing Australia, including my community in southern Sydney. The latest official estimates in the ITEC Commissioner's 2024-25 annual report are sobering. Between 50 and 60 per cent of all tobacco products sold in Australia are now illicit. Organised crime groups are earning between $4.1 billion and $6.9 billion in profit from this trade. Almost every vape purchase in Australia is illegal—about 95 per cent of all e-cigarette products sold—with a market value of about $1.6 billion. What used to be seen as a health issue has morphed into a serious and organised crime problem. A massive global surplus of cheap tobacco has been weaponized by serious transnational organised crime groups across the Middle East, South East Asia and the Pacific. They operate like multinational businesses, investing capital in what they perceive as a high-profit, low-risk situation. That business model must be disrupted.

The Combatting Illicit Tobacco Bill 2026 is legislation that represents a necessary and proportionate response. We need to make illicit tobacco less profitable and riskier for those involved, and that's exactly what this bill does. This legislation strengthens Commonwealth laws, significantly increases penalties, targets unexplained wealth and enables enhanced investigatory powers such as telecommunications interception, surveillance devices and other tools required to disrupt modern criminal networks. This fight matters because the consequences are real and tangible. Smoking still kills an average of 66 Australians every single day and accounts for about 20 per cent of our national cancer burden. Two out of every three long-term smokers will die from a tobacco related illness.

If we fail to turn the tide on illicit tobacco, we risk a new generation of Australians being drawn into smoking through cheaper, unregulated products. That would be a profound public health failure with enormous long-term costs to our health system. Australians are rightly sick of illegal tobacco shops operating openly in shopping strips and high streets across the country—including, in my community, places like Engadine and Heathcote. These are not victimless crimes. They bring violence, intimidation and criminality into local communities. The government is working closely with states and territories to shut down illegal outlets and disrupt the trade wherever it operates.

The Albanese Labor government has already committed substantial resources. Since 2023-24, $346 million has been provided to the Australian Border Force to crack down on illicit tobacco and vaping products. Australia's first Illicit Tobacco and E-cigarette Commissioner was appointed, backed by $21.3 million in the 2025-26 budget. Since January 2024, more than 14 million vaping products and accessories have been seized, and, in the last six months of the last year alone, over one billion illicit cigarettes were intercepted. Those figures demonstrate commitment. They also demonstrate the scale and sophistication of the problem. Such volumes do not exist without deep, organised and well-financed criminal supply chains.

Despite these efforts, the illicit tobacco market continues to grow. Border enforcement remains essential, but it is no longer enough on its own. Criminal groups have adapted. They have diversified routes, refined concealment methods and calculated that profits still outweigh the risks. This bill directly targets that calculation. At its core, the legislation addresses two fundamental problems. Firstly, it rebalances the risk-reward equation by increasing penalties and investigative consequences. Second, it strengthens proceeds-of-crime laws so that criminals can no longer enjoy the benefits of their illicit profits.

The bill amends multiple Commonwealth laws to increase penalties for offences involving the importation, possession, production, manufacture, supply and sale of illicit tobacco. Existing penalties were set when this market was smaller and less organised. They have not kept pace with the reality on the ground. Low penalties have meant low risk, allowing the trade to flourish. Higher penalties unlock more powerful investigative tools. Certain surveillance and computer access warrants can only be used where offences meet specific penalty thresholds. By lifting penalties, law enforcement agencies gain access to the tools they need to investigate encrypted communications, layered corporate structures and complex money-laundering arrangements used by organised crime.

The bill amends the Telecommunications (Interception and Access) Act to classify serious tobacco offences as 'serious offences'. This allows agencies to seek telecommunications interception warrants, aligning illicit tobacco offences with other serious organised crime activities. These powers already exist elsewhere in the law. This bill recognises that illicit tobacco now warrants the same level of response. These powers are proportionate. We are confronting criminal networks generating billions of dollars using violence and intimidation and undermining decades of public health progress.

The damage goes well beyond revenue. It includes firebombings, standover tactics, corruption and the normalisation of criminal behaviour within communities. The second major pillar of the bill focuses on profits. Criminal networks are motivated by money. Seizing cigarettes disrupts supply temporarily, but it does not eliminate the incentive. What truly undermines organised crime is removing its wealth. Organised crime groups earn between $4 and $7 billion each year from illicit tobacco. These profits are reinvested into other serious crimes, including drug trafficking, fraud and scams. They corrupt systems, silence witnesses and expand criminal infrastructure. Taking this money strikes at the heart of this enterprise.

The bill strengthens and streamlines information-gathering and confiscation under the Proceeds of Crime Act. It enables information obtained during investigations to be shared with other Commonwealth regulators, allowing coordinated action against professional facilitators such as accountants, lawyers and shell entities that support criminal networks. Following the money has already delivered results. AUSTRAC and the banking sector have shut down hundreds of high-risk accounts, terminated merchant services, removed private ATMs used for cash laundering and significantly increased suspicious transaction reporting.

This bill strengthens that ecosystem by ensuring that intelligence flows effectively between enforcement and regulatory agencies such as AUSTRAC, ASIC and APRA. The Proceeds of Crime Act search warrant framework is also modernised. Passed in 2002, it has not kept pace with updates to the Crimes Act 1914. As a result, police have sometimes had fewer powers to proceed investigations than in ordinary criminal investigations, even though financial crime is often more complex. This bill realigns those frameworks, giving law enforcement consistent and contemporary tools to trace, restrain and confiscate criminal assets.

The legislation also strengthens unexplained wealth provisions, and it improves national consistency. Organised crime does not respect jurisdictional boundaries. These reforms ensure that orders can be pursued and enforced across Australia, rather than fragmented by differing state processes. New non-publication provisions protect the integrity of investigations and ensure proceedings are not undermined. Revenue protection matters. Billions in lost excise revenue undermined funding for hospitals, for schools and for essential services, but the harm of illicit tobacco goes deeper. Australia has achieved world-leading success in reducing smoking rates through sustained policy, plain packaging, advertising bans, smoke-free laws and public education. Illicit tobacco undermines every one of these measures. It makes harmful products cheaper, more accessible and unregulated, it strips away health warnings and safety standards, and normalises smoking, particularly among young people and price-sensitive consumers.

The government's approach rests on three pillars: stopping illicit tobacco at the border, disrupting supply and sales within the community and strengthening coordination between the Commonwealth, the states and territories. That third pillar is critical. States and territories hold key powers over licensing and premises closures, landlord accountability and local enforcement. Through the national illicit tobacco and e-cigarette coordination forum, jurisdictions have agreed on priority actions including stronger retailer licensing, long-term closure orders, penalties for non-compliant landlords and increased on-the-ground enforcement. Evidence shows this works. Jurisdictions that apply comprehensive enforcement see significant drops in illegal trade. Others are strengthening closure and landlord laws to permanently shut down illegal operations.

This bill arrives at a critical moment. It will not dismantle an entrenched criminal economy overnight—criminal networks adapt—but this legislation equips law enforcement with the tools required to match the scale of the challenge. Every seizure, every restraining order and every dollar confiscated increases pressure on the illicit market. This bill sends a clear message: The risks are rising and the rewards are shrinking. It protects honest retailers competing fairly. It protects workers from intimidation and violence. It protects communities like mine from organised crime.

The government's objective is clear: shut down illegal shops, choke off criminal money and make illicit tobacco unprofitable. This bill advances that objective through higher penalties, through stronger proceeds of crime powers and through enhanced investigative capabilities. Together, these measures rebalance the risk-reward equation that fuels the trade in illicit tobacco. I commend this bill to the House.

See this speech in context