Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Immigration) | Hansard source

The Combatting Illicit Tobacco Bill 2026 goes to the heart of community safety, public health and integrity of our borders. This bill is a central part of our government's work to crack down on the illicit tobacco market and organised crime groups that are profiting from it. For many years, illicit tobacco was treated as a niche issue, a matter of health policy or lost revenue, but that era is now over. The evidence is now overwhelming that illicit tobacco is no longer a sidelined criminal enterprise. It's a serious organised crime crisis. It's a multibillion dollar revenue stream for criminal syndicates. It's fuelling violence, firebombings, intimidation and the spread of serious crime across the country.

The Illicit Tobacco and E-cigarette Commissioner has estimated that the value of the illicit tobacco market in 2024-25 was between $4.1 billion and $6.9 billion. Organised crime groups are earning between $4 billion and $7 billion in profits, and these profits are then used to fund drug trafficking, scams, money laundering and other serious harms. But they're not victimless crimes. They hurt communities. They hurt honest retailers, most importantly, and they hurt workers. They undermine public safety. In that context, this bill is not optional. It's essential.

The Combatting Illicit Tobacco Bill has two clear objectives. First, it rebalances the risk-reward calculation for criminal actors. For too long, the penalties for illicit tobacco offending have been far too low relative to the profits that are on offer. Criminal syndicates have treated the current penalties as a cost of doing business. This bill changes that. It raises offence penalties to match the severity of the harms being caused. It ensures that illicit tobacco is treated as the serious organised crime that it is. Secondly, the bill strengthens Australia's proceeds-of-crime regime. It makes the regime more effective in targeting the profits generated from illicit tobacco. The truth is simple: the main motivation for these criminal groups is money. If we want to shut down the trade, we must choke the profits.

To achieve these objectives, the bill amends the Customs Act, the Excise Act, the Proceeds of Crime Act, the Taxation Administration Act and the Telecommunications (Interception and Access) Act. These amendments expand law enforcement powers, and they increase penalties. They ensure that illicit tobacco related offences are treated as serious offences under the T(IA) Act. They enable access to telecommunications data and interception powers essential for disrupting organised crime networks.

These are not unprecedented powers. They bring illicit tobacco into line with other serious crime offences, they provide consistency across existing search warrant and investigative frameworks, and they do not impose new burdens on legitimate businesses or community organisations. They simply ensure that law enforcement has the tools it needs to respond to a rapidly evolving threat.

Some may ask why further legislation is needed. The answer is clear. Despite previous reforms, the illicit tobacco market has continued to grow at an exponential rate. The profits are enormous. The risks to criminals are low. The consequences for communities are severe. Without legislative change, penalties will remain too low. Law enforcement powers will remain inadequate. Criminal syndicates will continue to exploit the gaps, and this bill closes those gaps. It ensures that penalties reflect the seriousness of the offending. It ensures that illicit tobacco offences are treated as serious offences for the purposes of telecommunications access. It ensures the proceeds of crime regime can be used to seize the profits that drive this trade. This is how you deter, disrupt and dismantle organised crime.

Some have suggested that cutting tobacco excise would somehow solve the illicit tobacco problem, but reducing excise won't solve this problem. This is a serious organised crime issue, and reducing the excise risks the health benefits that have come from the increasing cost of smoking that is driving many to quit the habit. That brings a national health benefit as well as a benefit to the individual.

This is a global problem that's been driven by a massive surplus of cheap production. In some countries, illicit tobacco can be manufactured for as little as 50c a pack. Organised crime syndicates operating like multinational corporations have weaponised this surplus and flooded national borders with illegal product. These groups don't care what they sell. One day it's counterfeit luxury goods, the next day it's tobacco and the next day it's drugs or human trafficking. Their business model is simple: maximise profits, minimise risk. Because illegal tobacco is so cheap to produce, even if excise were wiped out completely, illicit tobacco would still be cheaper. States, territories and the Commonwealth would be left chasing the same criminals and the same syndicates. They would be shutting down the same sleazy shopfronts that have sprung up in strip shopping centres across the country. It's unfortunate that many of them are springing up around schools.

This has been a bipartisan policy for decades. The tobacco excise rose by around 121 per cent under the previous Liberal-National government. It's risen by about 32 per cent under our government. So, of that cost increase associated with increases in the excise, much was driven under the previous Liberal-National coalition government. The purpose was never to raise revenue; it was to reduce consumption, and it worked. Adult smoking rates have fallen dramatically. The challenge now is to hold on to those gains. We cannot surrender decades of progress to organised crime. If we were to reduce the excise, we'd be saying that the illegal syndicates have won and that we're going to heed and bend to what they want by reducing the cost of illegal cigarettes.

This builds on the Albanese government's strong record of action against illicit tobacco. Since 2023-24, the government has provided $346 million in funding to the Australian Border Force to crack down on illicit tobacco and vaping products. We appointed Australia's first illicit tobacco and e-cigarette commissioner. We backed the appointment with $21.3 million in the 2025-26 budget to coordinate those national efforts.

Our strategy has three key pillars: first, disrupting and dismantling border threats; second, enhancing detection, disruption and destruction of illicit products; and, third, better coordinating across jurisdictions through the national disruption group and the National Illicit Tobacco and E-cigarette Coordination Forum. The results are significant. Since January 2024, the Australian Border Force has seized more than 14 million vaping products and accessories. In the last six months of the year, more than a billion illicit cigarettes were seized.

I've been down to Port Botany in my electorate, to the Australian Border Force container X-raying facility, and I've seen firsthand the hauls of illegal cigarettes that they're picking up through that technology—shipping containers that are taken randomly off Australia's largest and busiest container port and x-rayed through that facility. This scale of response is required. To understand the challenge, we need to recognise that no country can win this fight at the border alone. Even Singapore, one of the most orderly jurisdictions in the world, has an illicit tobacco problem. They don't have shopfronts; they have motorcycle couriers and encrypted messaging apps. The method changes, but the threat is the same. That's why our government is throwing everything at this problem.

Border Force has recorded multiple record-seizure weeks—a record week in March and another in April. But the reality is simple: border enforcement alone cannot defeat a globalised, highly profitable criminal enterprise. That's why this bill is so important. It strengthens penalties. It expands investigative powers. It targets the profits that drive the trade. The government's focus is simple: shut down illegal shops, choke off the money and make this trade unprofitable. But we can't do it alone. The only way to dismantle illegal tobacco markets is through seamless cooperation between the states and territories and the Commonwealth. Over the past six months, interjurisdictional cooperation has strengthened dramatically.

Through the National Illicit Tobacco and E-cigarette Coordination Forum, 80 priority actions have been identified for states. These include stronger licensing regimes, long-term closure orders, penalties for landlords who knowingly lease to illegal operators and more on-the-ground enforcement. We're already seeing results. I've been walking down the street in my electorate and seeing signs on what were previously some of these dodgy operators operating out of shopfronts saying, 'This shop has been closed down due to illegal illicit tobacco sales being identified.' In South Australia and Queensland, illegal trade has fallen sharply in areas where enforcement has reached 100 per cent coverage. Victoria is moving to strengthen closure and landlord laws. Other jurisdictions are following suit. That's what national coordinated action looks like, and the Albanese government remains committed to working with every state and territory to shut down this trade.

While the government is focused on dismantling organised crime networks, others have chosen a different path. We've heard the calls to cut the excise, but those advocating for it cannot point to a single piece of evidence showing that it would actually reduce illicit tobacco—not one. It's a policy built on a vibe, not on facts. As the ABS data released yesterday confirms, consistent with the tobacco commissioner's report, the problem is driven by surplus global production weaponised by transnational organised crime, not by domestic settings. Let's be clear: the immediate beneficiaries of an excise cut would be global big tobacco—not Australian consumers, not public health and certainly not community safety.

We can't surrender Australia's health policy to organised crime, we can't unwind decades of progress in reducing smoking rates, and we cannot pretend that cutting excise would do anything other than make big tobacco more profitable and organised crime more entrenched. Not one line of those proposals would shut down an illegal shop. Not one line would seize a dollar of criminal profit, and not one line would make a community safer. This bill does all three. Fundamentally, we must go after the crime syndicates themselves. Battling organised crime is a serious job. It requires intelligence, coordination and the full force of the law, and that's exactly what this bill delivers.

The ABF, the AFP, the Australian Criminal Intelligence Commission and the state police are working together to dismantle these networks. The national disruption group is coordinating efforts across jurisdictions. With this bill, law enforcement will have the penalties, investigative powers and proceeds of crime tools they need to hit these syndicates where they hurt most: their profits. That is the only way to win this fight—not by cutting excise and pretending that the problem will disappear but by choking off the money, shutting down the illegal shops and making this trade unprofitable.

This bill is a necessary, proportionate, evidence-based response to a rapidly growing organised crime threat. It strengthens penalties. It expands law enforcement powers. It ensures that the proceeds of crime regime can be used to seize the profits that drive this trade. It builds on our government's strong record of action: record funding for the Australian Border Force, the appointment of the first Illicit Tobacco and E-Cigarette Commissioner and unprecedented cooperation across jurisdictions. It sends a clear message to organised crime that the days of low risk and high reward are over. This parliament has a responsibility to protect communities, to uphold public safety and to ensure criminal syndicates cannot profit from harm. That's exactly what this bill delivers.

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