Wednesday, 28 March 2018
Customs Amendment (Illicit Tobacco Offences) Bill 2018; Second Reading
That this bill be now read a second time.
The government is committed to closing down the illicit tobacco market, introducing new and strengthened enforcement measures to deter those who profit from the trade in illicit tobacco.
In the 2016-17 budget, we announced a suite of measures to address the growing trade in illicit tobacco and improve health outcomes for all Australians. The government announced annual increases of 12.5 per cent in tobacco duty that will continue until 2020. It also announced funding for the Australian Border Force (ABF) Tobacco Strike Team. These measures have helped to reduce the harmful impacts illicit tobacco has on society, and the deliberate and highly calculated defrauding of the Australian public by criminal organisations smuggling illicit tobacco into the Australian market.
It's evident, however, that these measures alone are not enough. While an increase in the price of cigarettes has contributed to the wellbeing of the Australian community, it's also fuelled the illegal activities of the black market. Increasing cigarette prices has inadvertently created a profit motive for those involved in smuggling activities due to the 'low risk high return' view of criminal groups. This has led to a surge in new black market activity.
Illicit tobacco smugglers undermine the government's strategies to promote good public health outcomes, and threaten the viability of law-abiding, local business operators, like the many convenience-store operators who do the right thing every day and have to compete against illicit tobacco.
To disrupt these criminal groups, the government has today introduced the Customs Amendment (Illicit Tobacco Offences) Bill.
The bill is the final, critical piece of a framework that not only promotes the health of all Australians but also serves as an effective deterrent to criminals involved in the illicit tobacco trade.
The bill provides the means by which ABF officers can investigate and enforce the illicit tobacco offences and strengthened penalties proposed in a related bill led by the Minister for Revenue and Financial Services. Together the two bills create a comprehensive set of offences targeting the importation, possession, purchase, sale and production of illicit tobacco.
The bill strengthens the illicit tobacco enforcement regime by allowing the ABF to investigate offences in the Treasury-led bill where the origin of the illicit tobacco is unknown. This will open opportunities to prosecute illicit tobacco offences as it will not be necessary to establish whether the illicit tobacco was imported or illegally manufactured.
Currently, the ABF can only prosecute tobacco-smuggling offences under the Customs Act if knowledge or intention to evade customs duties can be proven. While the penalty is high, the standard of proof has created a barrier for enforcement and it's created a barrier for prosecution and is not an effective deterrent to those involved in the illicit tobacco trade.
This bill also creates new offences in the Customs Act for those who are reckless as to whether importing tobacco results in the defrauding of revenue. The standard required to establish recklessness entails a lower level of culpability than that associated with intention or knowledge, alleviating any barriers to enforcement or successful prosecution of these criminal offences which are quite often committed by organised crime syndicates to fund other criminal activities.
This bill provides an effective deterrence to those who defy Australian laws for their own personal gain, risk the health of the Australian community, and cheat the tax system. This has consequential impacts to the revenue available to put back into the Australian community and threatens law-abiding local business operators that provide jobs to everyday Australians.
Illicit tobacco is a serious problem that only lines the pockets of organised crime. Criminal syndicates see the illicit tobacco market as a lucrative high-return and low-risk venture. The profits made by these syndicates can also potentially be used to fund other criminal activities. This needs to be addressed, and has been, through the proposed measures in this bill and those led by the Minister for Revenue and Financial Services. Without these measures the trade in illicit tobacco will only continue to grow.