Sharon Claydon (Newcastle, Australian Labor Party) | Hansard source

I rise today in support of the original, unamended Combating Illicit Tobacco Bill 2026. In recent months, my office has heard from a growing number of people across Newcastle who are deeply concerned about the rise of illicit tobacco in our community. These are not abstract concerns. They're coming from local shop owners who are doing the right thing and struggling to compete with illegal operators. They're coming from families worried about the normalisation of cheap, unregulated cigarettes and they're coming from residents concerned about the organised crime that, too often, sits behind this black market. To those people who have taken the time to write or to call about this issue: I hear you, and this bill responds directly to your concerns.

Illicit tobacco is not a victimless issue. It undermines public health. It undercuts honest small business, and it fuels criminal networks that operate outside the law. It erodes the integrity of our tax system, and it makes it harder to deliver the essential services Australians rely on. This bill is about restoring fairness, protecting public health and ensuring that our communities, like mine in Newcastle, are not left to deal with the consequences of illegal activity. At its core, the Combating Illicit Tobacco Bill strengthens Australia's ability to disrupt and dismantle the illicit tobacco trade.

It delivers tougher penalties for those who import, manufacture or sell illegal tobacco products. It enhances enforcement powers for our agencies, enabling them to better detect and seize illicit goods at the border and within the domestic market. And it improves coordination between federal, state and territory police authorities so that we are not leaving gaps for criminals to exploit. Importantly, the bill also increases penalties for repeat offenders and targets those who profit most from this trade: organised crime syndicates that treat illegal tobacco as a low-risk, high-reward enterprise.

For too long, illicit tobacco has been seen by some as a minor offence, but the reality is far more serious. Illicit tobacco is no longer just a health or revenue problem; it's a serious organised crime crisis. It has become a major source of funding for criminal networks, with profits from this trade often used to bankroll other serious harms and illegal activities. Recent estimates from the Illicit Tobacco and E-Cigarette Commissioner highlight the scale of the problem. The illicit tobacco market in Australia was valued at between $4.1 billion and $6.9 billion in 2024-25. This is an enormous shadow economy operating completely outside of the law. Organised crime groups are earning between $4 billion and $7 billion in profits from this trade—profits that are not sitting idle but are being funnelled into other criminal enterprises, including drug trafficking, scams and money laundering.

This is not a contained issue. It's part of a broader web of criminal activity that affects communities right across the country, and we are seeing the consequences. This trade fuels violence. It creates risk not only for those who are directly involved but also for innocent members of the public—people who live, work and run businesses in the same communities where these criminal networks operate. These are not victimless crimes. They harm communities, they hurt the honest retailers who are doing the right thing, they put workers at risk and they undermine public safety.

That is why this bill is so important. By cracking down on illicit tobacco we are not just addressing one issue; we are striking at the financial background of organised crime. We are making it harder for those groups to profit and, in doing so, limiting their capacity to engage in other harmful and illegal activities. This bill sends a clear and unambiguous message: Australia will not tolerate criminal profiteering at the expense of communities, and we will take strong action to protect public safety.

From a health perspective, the importance of this legislation cannot be overstated. Australia has been a global leader in tobacco control. Through measures like plain packaging, strong public education campaigns and excise increases we have, as well as introducing important health initiatives, significantly reduced smoking rates over time. According to the Australian Institute of Health and Welfare, daily smoking rates among Australians aged 14 plus has fallen by two thirds since 1991 because of these measures. These efforts have saved lives. It's that plain and simple.

But illicit tobacco threatens to undermine that progress. Illegal products are often significantly cheaper, making them more accessible, particularly to younger people and vulnerable populations. They are unregulated, which means customers have no assurance about what they contain. This has been a big issue raised by some hardcore smokers in my community and elsewhere who are trying to do the right thing—buy legal tobacco—but now feel that the market is so unregulated that they have absolutely no idea of what they're purchasing and whether or not it's genuine or legal. They bypass the safeguards that are designed to reduce smoking uptake and encourage people to quit. When we can't keep track of smoking rates, it harms our ability to formulate relevant health policy.

This bill helps protect the integrity of our public health system by ensuring that tobacco control measures are not undercut by a parallel illegal market. For communities like mine, in Newcastle, the impact is very real. Newcastle is proud of its strong sense of community and hardworking small businesses. And, like many regional communities, we rely on these businesses to operate on a level playing field. When illegal tobacco operators move into local shopping strips it is the honest retailers who suffer. Local newsagents, tobacconists and convenience stores who comply with the law, who pay their taxes, who check identification and who follow Australia's strict tobacco regulations simply cannot compete against criminal operators selling unregulated product at cut-rate prices. This is not fair and it is not sustainable.

I've heard directly from business owners in Newcastle who feel frustrated that they are doing the right thing while others appear to operate with little regard for the law. Many of these businesses are family run operations. They employ local people, they support local sporting clubs and community groups, and they deserve a regulatory system that backs them in, not one that allows criminal enterprises to flourish around them. This bill recognises that reality. It sends a message to honest businesses that they should not be punished for playing by the rules, and it acknowledges that effective regulation must work not only to deter illegal activity but also to support those who are complying with the law every single day.

That broader point about regulation is an important one. Australia's tobacco control framework has been built carefully over decades with one overriding goal: protecting public health. Successive governments of all persuasions have introduced measures designed to reduce smoking rates and discourage uptake, particularly among young Australians. Those measures have worked. Smoking rates have fallen dramatically over time, and countless lives have been saved as a result. But regulation only works effectively when it is enforced consistently and fairly. When illegal operators can evade the rules entirely, it creates an uneven playing field. It undermines confidence in the system, and it unfairly disadvantages legitimate businesses that are meeting their obligations. That is why this legislation matters, not only from a law enforcement perspective but also from a regulatory integrity perspective.

This bill helps reinforce the principle that, if businesses are expected to comply with Australia's tobacco laws, then governments must ensure those laws are enforced properly and consistently. Honest retailers should not feel abandoned while criminal syndicates exploit loopholes and profit from noncompliance. They should know that the government is serious about maintaining a fair marketplace, and that is exactly what this legislation helps achieve. It strengthens the integrity of the regulatory framework while ensuring that enforcement efforts are directed where they belong—at organised criminal activity and illegal profiteering. Importantly, it also helps preserve the credibility of Australia's broader tobacco control measures, because, if people see illegal products openly available in communities without consequence, confidence in the system begins to erode. That benefits nobody except organised crime.

This legislation is about balance. It's about maintaining strong public health protections while ensuring that legitimate businesses who follow the rules are not unfairly penalised or undercut. It's about ensuring our regulatory system works for those who do the right thing. And it's about making clear that compliance should never become a competitive disadvantage in Australia.

I also want to acknowledge that this bill takes a measured and practical approach. It recognises that combating illicit tobacco requires cooperation across all jurisdictions and agencies. No single agency can tackle this problem alone, and that is why stronger coordination between federal, state and territory authorities is so critical. This legislation builds those partnerships and strengthens information sharing so that enforcement efforts are smarter, faster and more effective.

It also recognises that enforcement must keep pace with evolving tactics of organised crime. These criminal networks are adaptive. They exploit weaknesses wherever they find them, and they operate with little regard for the impact of their activities on our local communities. This bill ensures that our enforcement agencies have the tools they need to respond appropriately to those threats, because the alternative—doing nothing—comes at a very high cost. Doing nothing allows organised crime to continue building a multibillion dollar revenue stream. Doing nothing allows illegal products to remain more visible and more accessible in our communities. Doing nothing places pressure on honest small business already doing it tough, and it means undermining decades of critical progress in public health policy. This is not an option for Australia.

We cannot allow criminal syndicates to profit at the expense of community safety, public health and legitimate enterprise, and we cannot allow the normalisation of illicit tobacco to continue unchecked. The rise of illicit tobacco presents serious challenges, but this legislation represents a serious and considered response. It strengthens enforcement, it targets organised crime, it protects legitimate businesses and it helps restore confidence in the integrity of our regulatory system.

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