Matt Smith (Leichhardt, Australian Labor Party) | Link to this | Hansard source

Illicit tobacco is no longer just a health issue. It is an organised crime issue, and, when we meet the dark tentacles of organised crime, we have to meet it. That is what this bill is all about. This is about helping the legal tobacconist. I've met with many of them, and they are furious, as they should be. They are honest people doing the right thing. People doing the right thing should not be worse off. People doing the wrong thing should be absolutely stopped. You would be angry too if your business was tracking along and another business doing exactly the same thing illegally opened up next to you. These changes that we're making are to make it easier for the federal government to respond and take it all away.

We need to look at the two key objectives. The first is, of course, risk versus reward. The calculation for criminal actors is: what is this going to cost me if I get caught, and is it worth more than what it will cost me if I keep going? This is going to raise offence penalties to rebalance that to match the harm and the severity that these criminal organisations are inflicting upon our small-business owners and our communities. The other is making proceeds of crimes more difficult to get hold of, because, let's face it, this is generated by their need for profit. Take the profits away and you take away the incentive.

As such, this bill amends a list of other legislation to help expand law enforcement powers, investigate illegal tobacco related offending, raise the penalties and make sure that we can stamp this out. The laws being amended include the Customs Act 1901, the Excise Act 1901, the Proceeds of Crime Act 2002, the Taxation Administration Act 1953 and the Telecommunications (Interception and Access) Act 1979. By updating all of these laws, we can make this fight more effective. This is an important step to make sure that illicit tobacco has no place in this country and that legal shop owners can continue to peddle their wares.

Since 2023-24, the Albanese Labor government has provided $346 million in funding to Australian Border Force to crack down on illicit tobacco and vaping products. I spent a bit of time with Border Force. They are very active in my part of the world. They're some of the finest men and women in the country, working hard to protect our borders. I know that they put this funding to good use. I know that they are taking out vapes and e-cigarettes when they're coming in. An additional $21.3 million was allocated in the 2025-26 budget to help coordinate these efforts.

By disrupting the flow of illegal cigarettes and e-cigarettes before they get into the country, we make it harder for them to be sold on the streets. We have enhanced detection and better disruption, and we will destroy that which we find. We have better connectivity between state, federal and local governments to make sure that we can identify and punish these people who break the law. I have reported several illegal tobacconists in my area in the last couple of weeks, and the work is having results. Since January 2020, more than 14 million vaping products and accessories and over one billion illegal cigarettes have been seized and destroyed by Border Force. These are vapes and cigarettes that didn't get into the hands of our children. These are vapes and cigarettes that didn't put profits back into the pockets of criminals.

I'm pleased with the work the Queensland LNP state government has put in to support these laws. We have seen that when there is a proper crackdown 100 per cent of illegal tobacco disappears. This requires all governments of all persuasions at all levels to respond. The coordination that I have seen firsthand in Cairns with the Cairns Regional Council, the Queensland LNP state government and this ALP Labor federal government has delivered results for my community. When they pop up, they get shut down. The one across the road from me, in a florist, was shut down. With the ones that I have recently reported, I one day soon hope to be able to buy flowers or some other legal thing from there as well.

These are important steps. This is about keeping our children safe. This is about making sure that profits don't go into the wrong hands. This is about protecting small business. Illegal tobacco has no place in our community. I am pleased to commend the Combatting Illicit Tobacco Bill 2026 to the House.

Monique Ryan (Kooyong, Independent) | Link to this | Hansard source

Australia's illicit tobacco trade has exploded into one of the country's fastest growing criminal markets, costing $4 billion in the 2023-24 financial year. The Australian Criminal Intelligence Commission has linked criminal syndicates to more than 200 firebombings and at least three homicides since 2023. That violence is affecting suburban shopping strips, neighbourhoods and communities across the country. This issue is raised with me every week in the electorate that I have the honour to represent.

The Combatting Illicit Tobacco Bill 2026 creates new offences for large-scale illicit tobacco activity linked to organised crime. It increases penalties across importing, possessing, buying, selling, producing and manufacturing. It expands proceeds of crime tools, and it enables enhanced law enforcement powers for serious tobacco offences. These are sensible reforms. But I fear that the horse has bolted on the illicit tobacco market. More than half of all tobacco, cigarettes and most vapes in Australia are now purchased from an illicit market which exceeds the combined size of those for cannabis, cocaine, heroin and ecstasy. Through poor policy settings and public health measures, we have created one of the largest black markets the country has ever seen. Tobacco excise collection peaked at $16.3 billion in financial year 2020. The government is going to collect only $7.8 billion this financial year, even though close to two million Australians still smoke daily. We have turned a regulated and effectively taxed market into an unregulated criminal one.

This predatory and illegal industry is specifically targeting young Australians. The most recent child health poll from the Royal Children's Hospital Melbourne found that 26 per cent of young people aged 12 to 17 have used a nicotine product, mostly vapes, with 12 per cent currently using them and three quarters showing dependence. That means that one in 10 teenagers in this country are dependent on vapes. As a paediatrician I find those numbers deeply alarming. Addiction can happen quickly. Nicotine rewires the developing brain in ways that can create lifelong dependence. Young Australians who vape are three times more likely to take up tobacco smoking. And let's face it, the vaping prohibition has not protected young people. It's handed the youth nicotine market to criminal networks, which are selling unregulated products without ID checks in flavours deliberately designed to attract children.

That is a legislative and a policing failure. While the total cost to our country of tobacco and nicotine addiction was estimated at almost $36 billion in 2021, collection rates for tobacco fines are lower than those for speeding infringements. Those operators treat fines as a routine cost of doing business. Greater penalties without the resourcing and coordination necessary to collect them will not break this business model.

The city of Stonnington comprises part of the electorate of Kooyong that I have the honour to represent. In its submission to the Senate inquiry into this bill, the city of Stonnington noted that Victoria has only 14 inspectors to supervise the eight to 10,000 retailers statewide and that those 14 inspectors have to undertake visits in pairs for their safety. In addition, the Victorian licensing scheme does not currently extend to e-cigarettes, vaping products or nicotine pouches. We need a national licensing and regulatory framework to bring all states into alignment.

I also want to address the active and ongoing contribution to this policy mess from the tobacco industry. Representatives from Philip Morris recently appeared before a Senate committee examining the illicit tobacco trade in a closed in-camera session not listed on the inquiry's published program. This was permitted despite Australia's obligations under article 5.3 of the WHO Framework Convention on Tobacco Control, which requires governments to protect health policy from interference by the tobacco industry. The Department of Health's own guidelines are very clear. Interactions with tobacco executives should occur only when they are strictly necessary and they should respect the Australian government's commitments on tobacco control. Those guidelines expressly state that such consultation should be public. A secret session in front of a Senate committee is not public.

Philip Morris was also permitted to give evidence behind closed doors in February to a New South Wales parliamentary inquiry into the illegal tobacco trade. Closed sessions allow the company to lobby privately for the sorts of policies that would directly benefit it, such as cuts to tobacco excises. They allow the company to do that beyond the scope of what it said publicly and without the media or the public being able to gauge the expertise of the witnesses or to scrutinise the advice that's been given to committee members. Let's face it: the tobacco industry is not a neutral stakeholder. It is a commercial actor, and its profits depend on the continued sale of a product that kills 66 Australians every day and whose interests are directly affected by the outcome of that ongoing Senate inquiry and of this legislation.

We've also recently learnt from work done by journalists at the Guardian Australia that individuals with undisclosed links to tobacco industry bodies have been positioning themselves as independent law enforcement experts in Australian and international policy forums, opposing excise increases, lobbying for cuts to customs duties, advocating for the legalisation of nicotine pouches and adopting other positions that align directly with the commercial interests of the tobacco industry. Tobacco companies have used 'denial of harm' tropes for more than 50 years, but they're now trying to reframe this debate around the issues of crime and law enforcement, not health. They are deceitfully presenting industry aligned voices, funded voices and lobbyist voices advancing policies that serve commercial interests, but they're presenting them as neutral crime experts. This pattern of behaviour has been called out repeatedly by organisations like the Public Health Association of Australia.

The tobacco industry funds economic reports based on flawed surveys and flawed analysis, and then it feeds them into public debate. It channels money to business think tanks and to lobby groups like the Australasian Association of Convenience Stores, which purport to speak on behalf of small business owners but which are funded by the tobacco industry. Research published this year found that 48 per cent of internal tobacco company lobbyists and 55 per cent of third-party lobbyists working on behalf of tobacco companies previously held positions in the Australian government. Many of those have moved into lobbying positions for the tobacco industry within 12 months of having left public office. This is despite the cooling-off periods prescribed in the government's milquetoast lobbying code of conduct. I have consistently pushed for a stronger lobbying code of conduct and for proper cooling-off periods, but we don't have them and we won't get them in the ineffectual legislation that the government is about to put before this House. The ongoing and active influence of the tobacco industry in our politics demonstrates why those things are actively necessary.

The current drive for a major cut in tobacco importer customs duties is an industry influenced campaign. The recent budget reported that tobacco excise and Customs duty collection will amount to more than $4 billion in 2025-26. A 50 per cent cut in the Customs duty rate would deliver a tax windfall to the multinational tobacco companies of about $2.1 billion every year. British American Tobacco Australia would receive about $900 million, Imperial Brands $550 million and Philip Morris a sweet $540 million. No wonder the tobacco industry is lobbying for a cut in tobacco excises! This House should be clear-eyed about that strategy from this industry. It doesn't mean that every concern raised about enforcement or about settings around the excise is wrong—some of those concerns are legitimate—but it does mean that when we hear these confident claims about what's driving the illicit market and what will fix it, we should be asking, 'Who is making those claims and in whose best interest?'

There is no simple fix to the question of the tobacco excise. There's little correlation between tax levels and illegal tobacco trade. We have the most expensive legal cigarettes in the world, but the illegal tobacco trade flourishes in countries in which cigarettes are much cheaper than they are in Australia. To compete with the black market, the price of legal cigarettes would have to fall dramatically. Such a reduction in price would be regressive and it would harm public health. Canada's experience in the 1990s, when it halved its excise to combat cigarette smuggling, is quite instructive. Smoking rates rose, particularly among young people, quitting rates fell and the illicit trade persisted. It's also worth noting that there is no legal mechanism in Australian law to guarantee that these multinational cigarette importers would actually pass any tax cut down the retail supply chain to customers.

The tobacco industry can't be made to compete on price with organised crime. Any proposal to cut its taxes to address criminal supply chains is unsupportable. Having said that, there is little point to further tax increases unless they're going to actually increase revenue and decrease smoking, and, given the scale of the current illicit market, there's no good case for an increase in those excises.

I'm moving an amendment to this bill which highlights the issue of the tobacco industry's influence in this debate and which calls on the government to prohibit political donations from the tobacco industry under the Commonwealth Electoral Act. Political donations from the tobacco industry are already prohibited in states like New South Wales. At a federal level, most major parties voluntarily refuse tobacco industry donations, but the National Party continues to accept them—in 2024-25 alone, $137,500 from Philip Morris and $88,000 from British American Tobacco—and One Nation has also accepted tobacco industry donations in the past.

In relation to the WHO Framework Convention on Tobacco Control, the guidelines adopted by treaty parties in 2008 called for article 3.5 to be implemented across all branches of government, including legislators. Our legal obligations are clear, but we're not yet acting on them. This parliament should legislate immediately to prohibit political donations sourced from tobacco industry interests, including the tobacco retail sector, under the Commonwealth Electoral Act. The tobacco industry is the only commercial sector that is the subject of an international treaty specifically designed to insulate government policy from its influence, and that treaty exists because the industry's long history of manipulating public debate and purchasing political access has been extensively documented. We saw that just last month. A major tobacco company was granted a secret hearing into one of our Senate inquiries, while public health organisations waited their turn. The tobacco industry's current push for a 50 per cent cut in the tobacco customs duty is an influence campaign which is worth potentially $2.1 billion to the three major multinationals. When commercial actors of that scale can make political donations, the extent of policy capture is obvious.

The amendment that I'm moving calls on the government to prevent an industry, whose products kill 24,000 Australians every year—66 Australians every day—from purchasing political influence at the federal level. This parliament has previously failed to legislate such a ban, despite many calls from health groups, despite existing state-level obligations and despite our treaty obligations. We have an opportunity today with the bill, which is already appropriately focused on the harm that the tobacco trade does to this country.

I thank the government. With this bill, they are holding fast against the tobacco industry's, its lobbyists' and the voices for hire's efforts to reduce the tobacco excise. But I also urge this government to have the honesty and courage to confront the failure of its vaping prohibitions and to confront the enforcement resourcing gaps at the state level, as well as the question of whether further excise increases are actually reducing smoking or enriching organised crime and the question of the tobacco industry's ongoing and well resourced lobbying campaign to shape this parliament's answers and its actions.

I move amendments (1) to (3) as circulated in my name:

That all words after "notes that" be omitted with a view to substituting the following words:

"(a) the public health harms of smoking are significant, including that around 24,000 Australians die every year from smoking;

(b) Australia's illicit tobacco trade had an estimated total economic cost of $4 billion in 2023-24, contributing to serious organised crime and community violence; and

(c) the influence of tobacco industry lobbying on public health policymaking is significant, including that:

(i) there is a revolving door between government and tobacco lobbyists, with around half of tobacco company lobbyists, including third-party actors, having held positions in the Australian government before or after working for the tobacco industry;

(ii) representatives of a major tobacco company, Philip Morris, reportedly appeared before the Senate inquiry into the illegal tobacco crisis in Australia in closed sessions not listed on publicly available hearing programs; and

(iii) the industry's push for a 50 per cent cut to tobacco importer customs duty is estimated to deliver annual tax windfalls of approximately $2.3 billion to multinational tobacco companies;

(2) calls on the Government to heed expert calls to legislate to prohibit political donations sourced from tobacco industry interests, including the tobacco retail sector, under the Commonwealth Electoral Act 1918; and

(3) further notes that the above measures, along with restrictions, enforcement and penalty provisions contained in this bill, are necessary to address the public health and community safety harms posed by tobacco to Australians".

Lisa Chesters (Bendigo, Australian Labor Party) | Link to this | Hansard source

Are the amendments seconded?

Kate Chaney (Curtin, Independent) | Link to this | Hansard source

I second the amendments and reserve my right to speak.

Ash Ambihaipahar (Barton, Australian Labor Party) | Link to this | Hansard source

I rise today to speak on the Combatting Illicit Tobacco Bill 2026, which is an important and necessary reform that reflects the seriousness of the threat posed by illicit tobacco trade across this country. During my time as a councillor at Georges River Council, I recall many local residents raising this concern, particularly on the rise of tobacco shopfronts popping up everywhere in my local area, particularly within very close proximity to local schools. This issue is not limited to my electorate, but I'm alive to the challenges within the local planning laws around permitted use, which are enabling the rise of tobacco shops in communities like ours. Parents, teachers and local residents are rightly concerned when these businesses appear near places where young people learn, play and travel each day. It sends the wrong message about tobacco use and it risks normalising products that we know can cause serious harm.

However, this legislation is about far more than cigarettes sold under the counter or untaxed tobacco entering the country illegally. It is about organised criminal networks exploiting gaps in our laws, undermining public health measures, threatening community safety and profiting at the expense of ordinary Australians. Here are some quick statistics from the Illicit Tobacco and E-cigarette Commissioner 2024-25 annual report that shows the seriousness of this problem. Between 50 and 60 per cent of all tobacco products sold in Australia are illegal and a significant proportion of vape products purchased in Australia was illegal. We think that organised crime groups are earning between $4.1 billion and $6.9 billion in profit from this trade.

For too long, illicit tobacco has been viewed by some as a secondary issue, merely a matter of lost revenue or regulatory noncompliance, but the reality confronting our communities today is vastly different. The illicit tobacco trade has evolved into a sophisticated and highly profitable criminal enterprise. It is now deeply connected to organised crime syndicates that engage in a range of unlawful activities, including money laundering, fraud, intimidation, trafficking and violent offences. That means every illegal packet sold is not just a breach of the law; it is money flowing into the hands of criminals who do real damage in our communities.

The Albanese Labor government recognises this issue demands a strong and coordinated response, and that is precisely why this bill has been introduced. The legislation before the House will strengthen the ability of law enforcement agencies to investigate and disrupt illicit tobacco operations while also increasing the penalties faced by those who choose to profit from this illegal market. It sends a very clear message: organised crime should not view illicit tobacco as a low-risk, high-reward activity.

The bill amends a number of Commonwealth laws, including the Customs Act, the Excise Act, the Proceeds of Crime Act, the Taxation Administration Act and the Telecommunications (Interception and Access) Act. Together, these amendments modernise and strengthen the legal frameworks available to authorities in combatting the illegal tobacco trade. At the core of this legislation are two objectives. Firstly, the bill seeks to rebalance the risk-and-reward equation for criminal actors involved in illicit tobacco. Criminal syndicates are currently generating enormous profits while facing penalties that are no longer proportionate to the seriousness of the conduct involved. Those breaking the law would rather cop the fine because it does not actually affect their significant profits. Existing laws have simply failed to keep pace with the scale and sophistication of this market. Secondly, the bill aims to strengthen Australia's proceeds of crime framework so authorities are better equipped to seize and confiscate the profits generated through illicit tobacco activity. These criminal organisations are motivated by profit. If we are serious about dismantling these networks, we must target the financial incentives that drive them.

The scale of the problem cannot be understated. It is worth repeating that the Illicit Tobacco and E-cigarette Commissioner report estimated that the illicit tobacco market in Australia was worth between $4.1 billion and $6.9 billion in the 2024-25 period alone. That is billions of dollars flowing into the hands of criminal groups rather than being invested in hospitals, schools, infrastructure and essential services for Australians. These profits are not sitting idle. They are being used to bankroll wider criminal activity. The same organised syndicates involved in illicit tobacco are frequently linked to other forms of serious offending, including drug trafficking, scams, extortion and financial crime. We have also witnessed disturbing incidents associated with illicit tobacco trade, including violent intimidation, firebombings of tobacco retailers, threats against business owners and criminal disputes spilling into local communities. These are serious threats to public safety and social cohesion.

It is important to recognise that illicit tobacco offences are not victimless crimes. Legitimate small businesses suffer when illegal operators undercut lawful retailers who comply with Australian taxation and public health laws. Workers and local communities are placed at risk when organised crime embeds itself within local economies. Consumers are exposed to unregulated products that may contain harmful or unsafe substances, and our local high streets are taken over by multiple tobacconists rather than the law abiding, community building small businesses.

Perhaps most concerningly, the growth of illicit tobacco threatens decades of progress in reducing smoking rates in this country. Australia has been long recognised globally as a leader in tobacco control and public health policy. Through education campaigns, regulation and taxation measures, smoking rates have steadily declined over time, saving countless lives. However, the expansion of cheap illegal tobacco products risks undermining these hard fought gains. Criminal groups are exploiting price differences and weakened enforcement settings to distribute the unregulated tobacco products more broadly throughout the community, including potentially to younger Australians. That is why stronger action is required.

The bill introduces increased maximum penalties for a range of illicit tobacco related offences. These enhanced penalties reflect the serious harm caused by this activity in line with the recommendations made by the Illicit Tobacco and E-cigarette Commissioner. Importantly, the stronger penalties will also enable law enforcement agencies to utilise a broader range of investigative tools when targeting illicit tobacco networks. This includes access to enhanced surveillance and investigative capabilities under existing legislative frameworks.

The amendments to the Telecommunications (Interception and Access) Act are particularly significant. By recognising key illicit tobacco offences as serious offences under the act, the amendments ensure agencies will be able to access telecommunication interception powers already available in relation to other forms of organised crime. This is not about creating unprecedented or extraordinary powers; it is about ensuring consistency across the law enforcement framework and recognising the reality that illicit tobacco crime has become a major organised criminal activity.

Law enforcement agencies must be equipped with appropriate powers to investigate criminal syndicates that are increasingly sophisticated, technologically capable and highly organised. Criminals involved in this trade are not operating in isolation. They use encrypted communications, complex financial arrangements and coordinated distribution networks. Our agencies must have the tools necessary to keep pace.

At the same time these amendments maintain appropriate safeguards and oversight mechanisms, the bill does not impose unnecessary burdens on ordinary Australians, community organisations or legitimate businesses. Rather, it strengthens targeted enforcement against serious criminal conduct.

This legislation forms part of the Albanese Labor government's broader and ongoing efforts to combat illicit tobacco and vaping products across the country. Since 2023-24, the government has invested $346 million into the Australian Border Force to strengthen efforts aimed at detecting and intercepting illicit tobacco and vaping imports. This funding has supported enhanced enforcement activities at the border and within the community.

The government has also established the nation's first Illicit Tobacco and E-cigarette Commissioner, backed by $21.3 million in funding allocated in the 2025-26 budget. This role is critical in coordinating national efforts and ensuring stronger cooperation with Commonwealth, state and territory agencies.

The government's approach is built around three central priorities. The first is disrupting and dismantling threats at the border to prevent illicit tobacco and vaping products from entering Australia in the first place. The second is improving the detection, disruption and destruction of illegal tobacco and vape products both at the border and within local communities. And the third is enhancing coordination and intelligence sharing across jurisdictions through initiatives such as the National Disruption Group and the National Illicit Tobacco and E-cigarette Coordination Forum.

These efforts are already producing results. Since January 2024, the Australian Border Force has seized more than 14 million vaping products and related accessories. In the final six months of last year alone, authorities also seized more than one billion illicit cigarettes. These figures demonstrate both the scale of the challenge and the importance of sustained enforcement activity. However, no single level of government can address this issue alone. Strong cooperation between the Commonwealth, states and territories is absolutely essential. Over recent months we have seen encouraging progress in interjurisdictional collaboration. Governments across Australia are increasingly recognising the need for a united response to organised crime in the illicit tobacco market. Through the National Illicit Tobacco and the E-cigarette Coordination Forum, governments have identified priority actions to strengthen enforcement and close legislative loopholes. These actions include the introduction of stronger licensing schemes, tougher closure orders for illegal operators, increased penalties for landlords knowingly facilitating unlawful activity and expanded on-the-ground enforcement operations.

There are signs that these strategies are already having an impact. South Australia and Queensland have reported reductions in illegal trade activity in areas where intensive enforcement measures have been implemented. Victoria is also progressing reforms to strengthen closure powers and landlord accountability measures. This demonstrates what can be achieved when governments work together with a shared purpose, and the Albanese Labor government remains committed to continuing this cooperative approach. We understand that combating illicit tobacco requires coordination across borders, agencies and jurisdictions. Criminal networks do not respect state boundaries, and our enforcement efforts cannot operate in silos.

Ultimately, this bill is about protecting Australians. It's about protecting communities from organised crime and violence. It's about protecting legitimate businesses that are doing the right thing. It is about protecting public health outcomes that generations of Australians have worked very hard to achieve. it's about ensuring that criminal organisations cannot continue to exploit weaknesses in the law for massive financial gain.

The government understands that strong laws alone will not solve every aspect of this challenge. Our ongoing enforcement, cooperation and investment will remain essential, but legislation such as this provides the necessary foundation to ensure our agencies have the powers and tools required to respond effectively. We cannot allow Australia to become an attractive operating environment for criminal syndicates seeking to profit from illicit tobacco. We cannot allow organised crime to continue generating billions of dollars while communities bear the consequences. We cannot allow decades of public health progress to be undermined by illegal and unregulated products flooding the market.

Smoking still kills, on average, 66 Australians every day and accounts for 20 per cent of the nation's cancer diagnoses. Two out of three long-term smokers will die of a tobacco related illness. This bill represents a measured, targeted and proportionate response to a growing national problem. It strengthens penalties, improves investigative powers, enhances proceeds-of-crime mechanisms and reinforces cooperation between governments and law enforcement agencies. Most importantly, it sends a very clear message that illicit tobacco crime will be treated with the seriousness it deserves.

Kate Chaney (Curtin, Independent) | Link to this | Hansard source

I rise to support the Combatting Illicit Tobacco Bill 2026. Smoking still kills about 66 Australians every day. After decades of hard work, daily smoking rates halved between 2001 and 2022 from 22 per cent to 11 per cent. Australia was a genuine world leader in tobacco control. The illicit market now threatens to undo much of that progress, fuelling organised crime and hooking a new generation. Among 18- to 24-year-olds, the combined rate of smoking and vaping has climbed back to 28 per cent, higher than it was a decade ago, and that's a trend that should alarm every member of this House. The illicit tobacco market is now estimated to be larger than the combined Australian illicit market for cannabis, cocaine, heroin and ecstasy. So the case for stronger enforcement is clear.

This bill responds by creating new offences for large-scale illicit tobacco activity linked to organised crime and substantially increases penalties across the full supply chain. It expands unexplained-wealth and proceeds-of-crime tools, enables wiretaps for serious tobacco offences and improves information sharing between law enforcement bodies. These are sensible, proportionate reforms. But enforcement alone will not win this battle. Australia has a national target of reducing daily smoking prevalence to five per cent by 2030. If we rely on enforcement alone, without addressing underlying demand, we will be chasing this problem indefinitely. That means maintaining our public health infrastructure, funding quitting support, and holding the line on plain packaging, advertising restrictions and excise. And it means being alert to who is shaping these settings and how.

Tobacco companies have a well documented history of seeking to influence public health policy in ways that serve their commercial interests rather than the public's health. That history is why Australia, as a party to the WHO Framework Convention on Tobacco Control, has clear obligations to protect public health policy from industry influence and to ensure full transparency in any interactions that do occur. It's also why I seconded the amendment from the member for Kooyong to ban political donations from tobacco companies.

The long and troubling history of hidden influence by tobacco companies brings me to the Senate inquiry into the illicit tobacco crisis and specifically to the hearing on 4 May, where the committee allowed tobacco industry representatives to give evidence in a closed session. I wrote to the committee chair to express my deep concerns. I asked why private briefings from tobacco companies were considered appropriate, when the transcript of the Philip Morris session would be released and how the committee would ensure that the remainder of the inquiry remained consistent with our international public health obligations.

I have now received a response. The committee advises that it may call any witnesses it deems relevant, that transparency is its first preference and that the Philip Morris transcript was published on 7 May, and I welcome the publication of that transcript. But the committee's response does not fully address my concerns. It doesn't explain why a closed session was the initial preference. Neither does it address how the inquiry will remain consistent with our obligations under the WHO Framework Convention on Tobacco Control, which requires governments to protect health policy from commercial and vested interests of the tobacco industry.

This matters. Parliamentary inquiries play a vital role in building public trust in decision-making, particularly on matters of public health. Where that process appears opaque, where some witnesses get public scrutiny and others get a closed room, it invites entirely reasonable questions about whose voices are being heard and whose interests are being served. We cannot allow the legitimate concern about illicit tobacco to become a Trojan Horse for the tobacco industry to rehabilitate itself as a policy partner, to insert itself into regulatory processes or to subtly water down the public health settings that have made Australia a world leader.

It's worth noting that right now the gambling industry is copying straight from the tobacco playbook, casting doubt on where the harm is done, resisting proper regulation, wining and dining decision-makers, and now pointing earnestly to overseas illegal gambling sites, claiming that that should be the focus of regulation. We've seen it all before, and we can't be fooled by it from tobacco or from gambling.

If this bill is to achieve what it promises, the enforcement framework it creates must be matched by an unwavering commitment to public health policy that's developed transparently and free from industry capture. I urge the committee and this House to ensure that when we scrutinise the illicit tobacco trade we do so with our eyes open to the criminals who profit from it and to the legal industry that has never stopped trying to protect its market share at the expense of public health. I commend this bill to the House.

David Moncrieff (Hughes, Australian Labor Party) | Link to this | 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.

Aaron Violi (Casey, Liberal Party, Shadow Minister for the Digital Economy) | Link to this | Hansard source

The Combatting Illicit Tobacco Bill 2026 is an important bill to speak on. As a Victorian, I know, and every Victorian knows, firsthand the challenges that we face with the crime crisis in Victoria. Many states are dealing with illicit tobacco, but what cannot be denied is that a lot of the crime crisis is being fuelled by the profits gained by organised crime from illicit tobacco. As Victorians, we are now seeing this move into illicit alcohol as well. Organised crime is pushing into the hospitality industry and we are seeing venues being firebombed. And let's not beat around the bush, these things are linked. The illicit tobacco crisis, the illicit alcohol crisis and the crimes that they are fuelling are linked. They are bankrolling organised crime. There is such a disparity now in the price of illicit tobacco and illicit alcohol versus legal tobacco and legal alcohol, because of the excise, that it is fuelling this crime crisis.

Combined with a complete lack of consequence for those who break the law, it is lower risk for organised crime to import a shipping container of illicit tobacco and make more profit than if they are looking to import illicit drugs. That is the reality. That is the mathematical reality for organised crime. And we need to do more, because it's not just criminals who are impacted. It is every community, it is innocent shop owners, it is those looking to do the right thing.

Let me share a story from my community about the impact of the crime wave linked to illicit tobacco. On 11 February 2024, a tobacconist in Seville was firebombed. I want to pay tribute to Seville CFA, Wandin CFA, Hillcrest CFA and many other CFAs across the upper Yarra and the Yarra Valley that were quick to turn out to get that blaze under control in the dead of the night. But, despite their work, the impact was profound. The much loved restaurant and family business next door, Branded Burgers and Bar, as well as the local dentist and medical centre—they were all impacted by substantial smoke, heat and water damage. In fact, Branded Burgers and Bar had only just changed hands. The new owners, Lyshea and her partner Chris, were in the early days of opening the business at the time. The business had to close for 10 months as they dealt with insurance and the renovations.

I worked with them in this time to support them as much as I could. It was causing hardship and stress for them, as the owners, and for the team of locals that they employ, their families and the wider community. It was great to be there when they opened up again and to see them now continuing to thrive. They survived that tough 10 months, but they were impacted through no fault of their own. Their business copped the damage of the criminality. This is just one story I share, but we know there are hundreds and hundreds, if not thousands, of stories across the community of small businesses and people impacted by these firebombings, by this crime. There is no doubt that the impact is profound, and that's why it is so important that more is done to stamp this out.

Like so many government bills, it has an impressive-sounding name—Combatting Illicit Tobacco Bill. Of course we want to combat illicit tobacco. The coalition are supporting this bill because something is better than nothing, but let's be up-front here. This is partial. It's inadequate. It is not going to make a significant difference to the illicit-tobacco crime crisis that we face. In fact, astonishingly, in the explanatory memorandum, the government's own words confirm that this is a wet lettuce. They say:

The Bill does not introduce substantial new powers, rather seeks to clarify, streamline or strengthen existing information-gathering and confiscation mechanisms, to increase the effectiveness of law enforcement outcomes.

So at a time when crime is out of control in Victoria and is being fuelled by the profits from illicit tobacco, and when the current system is not working, the government, in their own words, bring in a bill that is not going to make a difference. There are no substantial new powers for any enforcement agency to hold these criminals to account.

This is legislation at its worst. This is this government at its worst. Member after member and the minister will stand up and say: 'We've made a difference. We're combating illicit tobacco. It's a scourge. We've got to do something.' They've got a headline and they will pretend that they're doing something, but, in their own words, it's not going to make a difference. My community, all Victorians and every Australian is sick of this government talking a big game and failing to deliver.

If there is one hallmark standout from this prime minister, the legacy of this prime minister will be a prime minister that misleads the Australian people and a prime minister that grandstands and thinks that introducing a bill and making a statement in the house of parliament is job done. It's not because the criminals in Victoria and the criminals across the country do not care about the political games of this prime minister. They are not worried about the consequences unless they are profound. This government has shown, in their own words, that this is not going to make a difference.

We are seeing this play out in so many ways. We are seeing the gap widen as illicit tobacco increases and more people are going to illicit tobacco stores. Retailers are shutting down. Many are not even offering cigarettes anymore. I don't smoke. I never have, and I never will. It's not for me. I'm not going to judge those that do. It's up to them. I think it's a dangerous habit that health professionals have shown shouldn't be there, but people are free to live their life. No wonder people are turning to illicit tobacco when they can get a packet for $20 and they walk into a retail store it's $80. That's human nature, and I don't judge those for doing that. There are unintended consequences of these decisions for hardworking businesspeople. Retailers and their staff are getting abused by consumers in their stores because a consumer is walking in and going: 'Why are you charging me $80 for my cigarettes when I've been paying $20? You're ripping me off.' Most consumers that walk into a tobacconist don't actually comprehend or understand that they're technically breaking the law. They just walk in to buy those products because that's their shop and they think that's the price. They walk into a larger retailer that's doing the right thing and they think they're ripping them off and they abuse them.

The other perverse impact of the illicit tobacco crisis is that smaller retailers in particular—corner stores, milk bars, convenience stores, service stations—are being faced with a choice. Sometimes they don't get given a choice, and there are lots of reports about this. Organised crime are walking into their stores and telling them, 'You will sell illicit tobacco or will be back.' Some have gone to the police and they've faced the consequences of those criminals coming back. Others have had to accept them for their own safety. But if they refuse to stock illicit tobacco, they'll go broke. If you've poured your life savings and you've put everything into your business, you then have a choice: do you shut down your business and fail to feed your family, or do you start stocking this illicit tobacco like everyone else so you can put food on the table? That is the choice many small business owners are having to make across the country, and that's heartbreaking for them. That's how big this issue is.

And what do we get from this government? In their own words, 'No consequential changes, no substantial new powers.' Essentially, it's a wet lettuce that is not going to change something that is out of control. It's even worse in Victoria, because we have a premier, Jacinta Allan, and a state Labor government that refuse to be tough on crime. They refuse to hold to account those that commit the crimes. We hear time and time again about these criminal organisations paying young people as little as $1,000 to firebomb a hospitality venue or a tobacconist. Then, when the police catch those kids, in many cases they're back out on bail and they do it again. We have this amplification in Victoria of failures at the federal level to address illicit tobacco—and, now, illicit alcohol—and failures in Victoria at the state level of Jacinta Allan and this weak Labor government to actually hold these criminals to account. Add both together and you have chaos in the streets. You have hospitality venues closing down or having to employ security at their own cost 24 hours a day; hospitality owners being threatened with their lives; retail workers being threatened and having to move out, and nothing from the federal government or the state government.

However, it's 2026 and there is hope, and that hope comes in the form of Jess Wilson and the Liberal Party. Jess has made it clear that she has a plan to restore safety to Melbourne's vibrant nightlife by recruiting 3,000 more police officers, expanding 'adult crime, adult time' sentencing and implementing a one-strike bail rule for serious offences. You do the crime and you will do the time. Under the Labor government, under Jacinta Allan, that's not the case. You do the crime and you get let off. You do the crime again and you get let off again. You do it again and you get let off—and we wonder why there are no consequences.

I know, from talking to many in Victoria police, they know it's time for a change. They are frustrated time and time again by the lack of consequences for young people. This is how disastrous it has gotten in Victoria. I was talking to two police officers in my community about a criminal that they arrested, and they literally got sledged by that criminal. They said: 'Yes, lock me up, I don't care. By the time I get to the magistrates, I'll get bail. I'll be back here in 24 hours and there's nothing you can do about it.' And what did that criminal do? Exactly that. They got bail, came back to the police station and laughed at the police officers. That's the real-world consequences of Victorian crime under this Labor government.

Let me go back to this point. This bill will not make a difference to what we are seeing because very rarely, if ever, are tobacconists being shut down and, if they are being shut down, they're opening up again within 24 or 48 hours because the profit margins are so huge that it is nothing. It is a blip for their stock to be taken away from them. It is a blip to have even a shipping container intercepted because of the profit they make on everything else. Every year it gets worse under this government. It gets worse because the excise continues to go up. It provides a differentiation such that there are now reports that there will not be legal tobacco sold in this country in the next four to five years. Different reports have it that between 60 and 80 per cent of all tobacco in Australia is now sold illegally.

Let's not kid ourselves that the smoking rates are going down. As I said, I wish we lived in a world where no-one smoked. It's not a habit I support at all. But we live in the real world where more people are smoking because it is so easy and accessible. That's before we even talk about the impact on young children. Let's be honest. These illicit tobacconists don't care if they're selling to a 10-year-old, 12-year-old or 15-year-old. They're criminals, and it's every Australian that pays the price. (Time expired)