Sarah Witty (Melbourne, Australian Labor Party) | Link to this | Hansard source

I rise to speak in support of the Combatting Illicit Tobacco Bill 2026. This legislation responds to a problem that has changed rapidly in recent years. Illicit tobacco is no longer a problem on the edge of the economy; it has become tied to organised criminal activity, community safety concerns and growing risks to public health. Across the country, illegal tobacco products are being sold through unregulated networks with no oversight, no safety guards, no safety standards and no accountability for what these products actually contain. At the same time, criminal groups are making billions of dollars from the trade and using those profits to fund other serious criminal activities.

That is why our government is acting—to protect communities, protect public safety and stop criminal networks from embedding themselves deeper into Australian life. The Illicit Tobacco and E-cigarette Commissioner estimated the illicit tobacco market was worth between $4.1 billion and $6.9 billion in 2024, with illicit tobacco products making up to 50 to 60 per cent of all sales. That is an enormous criminal economy. These groups are not investing in this market by accident. They see huge profits and vast distribution networks and, until recently, they had a level of risk that did not match the harm being caused. These reforms change that equation. They expand law enforcement powers to investigate illicit tobacco offences, they strengthen proceeds-of-crime laws and they increase the consequences for criminals operating in this trade. If criminals are making billions from illicit tobacco, governments must be prepared to respond with the full strength of the law.

In my community, these laws will make a real difference. Melbourne is a city built around busy shopping strips, small businesses, hospitality venues and local places where people gather every single day. But people in Melbourne have also watched illegal tobacco shops spread quickly across retail areas and commercial precincts. Alongside that growth, there have been reports of violence, arson attacks, threats and intimidation linked to organised criminal activity. My constituents are rightly concerned. It affects workers locking up shops at night. It affects nearby businesses trying to operate honestly. And when criminals and activity criminal activity becomes more visible, more brazen and more violent, this chips away at public confidence.

I've been meeting with business associations across my electorate, including those on Victoria Street and Bridge Road and across the CBD. Their members are running honest businesses in a hard economy. They are managing rent, wages, insurance, supply costs and thin margins. They are doing the right thing. Then, in some places, we see the impacts of organised criminal activity spilling into our precincts. It affects the way people feel about their local shopping strips. It affects business confidence. It affects the sense of safety that local communities deserve.

We saw that danger clearly on Bridge Road in Richmond when a smoke shop was firebombed in the early hours of the morning. Not only was the smoke shop affected; whatever the circumstances, it was the neighbouring businesses that were forced to deal with the consequences. Workers at the bakery next door, Little Frenchie & Co, were close enough to see the smoke and flames. One worker, who said they had to move quickly, said, 'Quick! Move everything out the back.' The manager, Sam Razis, put it plainly: 'Little Frenchie's is our business. It is our livelihood, so to come so close to disaster is pretty awful.' That is the human reality behind this issue.

For nearby traders, this is not a line in a criminal report; it is their shopfront, their staff, their stock, their lease, their livelihood. And when illegal tobacco becomes tied to arson, intimidation and organised crime, the damage spreads beyond one premises. Communities should not have to get used to organised crime operating in plain sight. Honest small businesses should not have to compete beside enterprises that ignore the law entirely, because these are not victimless crimes. The impacts spread outwards. They damage trust, they undermine safety, and they place pressure on businesses and workers trying to do the right thing.

It matters on Victoria Street, Chapel Street, Swan Street, Errol Street, Brunswick Street and across the CBD. These places are more than commercial strips. They are where families run restaurants, cafes, groceries, pharmacies and retail stores. They are where workers rely on safe jobs and steady hours. They are where community life happens. That is why this bill matters to the community of Melbourne. It backs the businesses that contribute to the community, not the criminal networks that exploit it.

There is also a serious health concern sitting underneath this issue. Australians have spent decades reducing smoking rates and improving public awareness about the dangers of tobacco. That work has had a profound impact. Governments, health workers, community organisations and public health advocates have spent years driving smoking rates down and reducing the harm caused by tobacco products, but illicit tobacco creates a dangerous shadow market operating outside Australia's regulatory systems. These products are not subject to proper health checks, quality standards or legitimate oversight.

Regulation exists for a reason. Australians expect products sold in this country to meet proper standards, especially products that affect public health. Illicit tobacco bypasses all of that, and when criminal groups control the supply chain, public safety means nothing to them. Profit is the only goal. These networks are not interested in protecting people. They are interested in making money as quickly as possible, and if dangerous, poor-quality or unregulated products end up in Australian communities, that is simply treated as part of doing business. That is unacceptable.

This legislation recognises that illicit tobacco is not just unlawful trade; it is part of a broader criminal ecosystem that harms communities in multiple ways at once. The Albanese Labor government has understood the seriousness of this issue from the beginning. Since 2023-24, this government has committed $346 million to the Australian Border Force to crack down on illicit tobacco and vaping products. We have appointed Australia's first Illicit Tobacco and E-cigarettes Commissioner, and, in the 2025-26 budget, a further $21.3 million was committed to strengthening national coordination efforts. That work is already producing results.

Since January 2024, more than 14 million vaping products and accessories have been seized by the Australian Border Force. In 2024-25, the Australian Border Force seized 2.66 billion cigarettes, up more than 320 per cent on four years ago. That figure shows the scale, but it also shows that enforcement agencies are working to disrupt these operations before products reach Australian communities. This response has not relied on one agency acting alone. Criminal networks move quickly. They operate across borders, and they exploit gaps between systems wherever they can. That is why coordination matters. The Commonwealth cannot solve this issue alone. States and territories cannot solve it alone either. The response only works when governments share intelligence, co-ordinate enforcement and target these operations from multiple directions at once.

Through the National Illicit Tobacco and E-cigarette Coordination Forum, governments are working more closely together to strengthen enforcement, improve licensing systems, introduce tougher closure powers and target the structures that allow illegal operators to keep functioning. Victoria is part of the national effort. The Commonwealth plays a critical role at the border through intelligence sharing, through national coordination and through the agencies disrupting supply chains before these products reach Australian communities. States and territories play a different but equally important role through licensing systems, shop closures, local enforcement activity and stronger penalties targeting illegal operators on the ground. When those efforts work together, the impact is far stronger. Because organised crime does not stop at state borders, neither can the response.

Importantly, governments are recognising that shutting down one illegal shop is not enough on its own. If the financial networks, supply chains and criminal profits remain untouched, these operations simply reappear somewhere else. That is why one of the strongest parts of these reforms is a focus on criminal profits. Organised criminal activity survives through money. If these groups continue making enough profits from illicit tobacco, they will continue investing in this trade. These changes directly target that business model. They strengthen proceeds-of-crime laws. They improve information sharing between agencies, and they give law enforcement stronger tools to investigate unexplained wealth and confiscate criminal assets.

Dismantling these networks means more than shutting down one storefront; it means disrupting the financial structures underneath the trade itself. It means going after the profits that allow these organisations to expand. These groups treat their operations like businesses. They invest in supply chains, distribution, storage, cash movement, property and systems designed to hide profits. These reforms strengthen the ability of law enforcement agencies to follow that money and disrupt those structures, because, when government starts taking away criminal profits, property, vehicles and assets, the pressure on these illegal operations increases.

The reform also helps aid agencies dealing with serious illicit tobacco offending. That includes stronger surveillance, communication and disruptive powers. These powers are significant, and they should be because the groups involved in this trade are sophisticated and highly coordinated. Law enforcement agencies need modern tools that match the scale and complexity of the networks they are dealing with. These changes help ensure they have those tools.

Some people argue that the answer is to cut tobacco excise, but Australia should not surrender its health policy to organised crime. There is no realistic excise cut that would dismantle criminal supply chains already operating across borders, warehouses and illegal shopfronts. The answer is not to make smoking cheaper. The answer is to make illicit tobacco more risky and less profitable for criminals.

Importantly, this legislation recognises something that my community already understands instinctively. If governments do not act early, these problems become harder to contain. People want to feel safe in their shopping strips, neighbourhoods and local communities. My community wants confidence that organised criminal activity is being confronted directly, not ignored until it becomes even more entrenched. They want a government prepared to step in early. That is why the Albanese Labor government is coordinating a national response and strengthening the laws needed to deal with organised crime. Allowing illicit tobacco networks to continue growing unchecked would carry enormous consequences over time for public health, community safety and trust in the rule of law itself.

Australians expect laws to mean something. They expect governments to enforce standards fairly and consistently. When people see illegal operators functioning openly, selling unregulated products while criminal groups make billions in profits, confidence in the system starts to weaken. That is why visible enforcement matters. That is why strong penalties matter. That is why these reforms matter. They say clearly that organised networks will not be allowed to treat Australian communities as easy targets for profits.

Melbourne is a city that thrives on community life. People gather in cafes, support small businesses and build connections through space. Those places should feel vibrant and welcoming. These reforms help protect the sense of community confidence. They support the honest businesses who operate legally, employ workers properly and contribute positively to city life. Every time illegal tobacco products enter Australia through illegal supply chains, the risk grows louder, longer and larger. There's a risk to public health and a risk to public safety. I commend this bill to the House.

Pat Conaghan (Cowper, National Party, Shadow Assistant Treasurer) | Link to this | Hansard source

I'm pleased to rise to speak on the Combating Illicit Tobacco Bill 2026. Sometimes we stand in this place and make speeches on topics that we have little understanding of because it's out of our remit. I'm confident in speaking on this particular bill. I speak quite often about my time as a detective in the NSW Police, in particular my time as an undercover operative in the drug enforcement agency for 2½ years. During those days, we'd infiltrate organised crime.

I'm confident in saying I know exactly what organised crime gangs and groups are thinking about this bill right now. They would be thinking, 'We love the Labor government, which has sat there and done nothing for the past four years and let us earn billions of dollars through the illicit tobacco and vaping trade,' and they would say, 'Thank you, Labor government for the factories of cash, the cars, the lifestyle in Dubai, in Thailand and in Australia, and all that money that we've reinvested into our business model for more serious illicit drugs, for human trafficking and all the other horrible things that organised crime do.' They would be saying, 'Thank you Labor because you've let us make this money.' They would now say: 'Thank you for this weak, limp Combating Illicit Tobacco Bill, because it will do nothing to our business model. It will continue to allow us to make money. It will continue to allow us to live like kings around the world, and it will continue to contribute to the demise of legitimate businesses in Australia.'

Now, for those of you who may be listening, I'll give you a little bit of an education in history over the past four or five years. Back in 2022, the illicit tobacco market sat at around 20 per cent. That would fluctuate somewhere between 13 and 20 per cent in the preceding years. It is now, after four years, at 80 per cent. Eighty per cent of the tobacco market is illicit. I can't blame the punters out there—and I should put on the record that I don't like smoking and I don't like vaping, but they are legal products. Well, tobacco is legal; vaping is not. But, hey, you see everybody standing on every single corner looking like they're on fire every time they breathe out. But I can't blame the average punter who wants to spend $20 on a packet of cigarettes instead of up to $80.

What we've actually seen since we've hit the 80 per cent mark—and this is the business model of the cartels, mind you—is those $20 packets double because the cartels know that they've got the market. The average punter will say, 'Well, you know, it's just double.' It's still half the price. It's still half the price of the legal tobacco. So they'll go ahead and purchase that.

And then we see what's happened to vaping. The government, when they first came in, outlawed vaping. It's illegal. Nobody's going to use it. Nobody's going to go down to the corner shop anymore and buy a vape. Well, we all know the proliferation of those pop-up shops selling illegal vapes to kids. Every speaker said it. They don't care who they sell it to. These are criminals. For teachers and principals around Australia, it is the bane of their existence with teenagers in toilet blocks. I actually heard of a teacher who would take the kids out to vape at morning tea so they wouldn't have the problem. Now, that's unique. I don't know what the parents thought of it. But that was a practice that they had.

The government outlawed it, so, in conjunction with illicit tobacco, where we're now losing around $7 billion a year in excise, instead of legalising vaping—again, I can't stand it. But what we're getting at the moment is Chinese crap. I use that term specifically because we don't know what's in it. It's not quality controlled. It's not regulated. It is poison. It is poison going into a 12-year-old's lungs. And it's pushed towards children. They're fluorescent. They've got characters. They've got graffiti on them. It is pushed towards our young people deliberately. And we've seen now popcorn lung over a couple of years of use of it. Instead of regulating this industry and taking it out of the cartel's hands, we've handed the whole industry to them along with another $7 billion in excise if we comparatively did it with tobacco. But, no, this government says, 'Oh, this will work.' They're really living in la-la land. So we have had in four years a drop of $7 billion to $9 billion in excise and a whole industry of vaping, which is controlled 100 per cent by cartels within and around Australia.

And not only is that doing damage to our economy; it's doing damage to the fabric of our society. I've spoken about the corner pop-up shops and the number of mums and dads who have stopped me and said, 'Pat, how do we stop this?' And I'll get to how we stop it before the end of the speech. 'How do we stop this? How do we stop these people preying on our children and turning our main streets into something that would resemble a bazaar market in India?'

But there are also the social implications. We have had over 300 firebombings between Victoria and Sydney. In my 30 years of law and law enforcement, I have never heard of anything like that—shootings, innocent people killed, families terrified and business owners terrified. If there's a property leased to one of these pop-up vape or illicit cigarette retailers, you can't get insurance on either side or above. You might be a legitimate owner of a commercial premises that you bought for your superannuation down the road, and, because of this illicit activity and the permission of this government for it to occur, you're not being insured anymore. So, if that place gets firebombed, there goes your superannuation, there goes your property and there goes the people who may want to rent your commercial property, because you can't get insurance. So there's more than one flow-on effect here.

Then you have the legitimate business owners who are being forced by the cartels to sell their product. These are nasty people. I've dealt with them. I've operated with them. The things that you see on TV, the lengths that they will go to, are true. And these poor business owners are out there saying: 'I have to put food on the table. I have to make a living. I have to look after my kids. I have no other choice than to sell it.'

So how do we change it? We start by changing the excise. I'll be shouted down by those saying I'm doing the devil's work for the British alcohol and tobacco and the vaping groups. I don't like them. I don't like cigarettes. I don't like vaping. But the fact is that we have pushed the purchase price so high that the average punter has to buy the cheaper one. We need to review that whole system, whether it's 80 per cent, whether it's 50 per cent or whether we go back to 2019, but we have to make it a viable alternative. We have to take and break the business model of the organised crime groups. We have to break it and smash it because it's the same business model that they use to put the vapes through, and it's now the same business model that they use to put the illicit alcohol through. I warned of this years ago. I warned alcohol was coming because I know how they operate. Anybody could have seen it. This government should have seen it.

So we change the excise and then we give law enforcement resources and power. I've been calling on a standalone agency, similar to the one in the United States, to deal with this. The Federal Police cost about $1.5 billion a year to operate. We're losing $7 billion to $9 billion. A standalone agency would make us money. It would bring back the excise and it would break the cartels that are operating here. We have to give them the funding, we have to give them the resources and we have to change the status quo.

This bill does none of that. It tinkers around the edge of enforcement, prosecution and penalties. There's no purpose or reason to increase the penalties when nobody's being prosecuted. I'm not against increasing the penalties, mind you, but it's not addressing the real issues. It's not addressing the business model or how to smash that business model. It's not addressing the lack of enforcement. When you have the New South Wales Labor premier and health minister criticising this government on their policies on tobacco and vaping, you know there is something seriously wrong with the system.

So instead of tinkering around the edges with penalties and enforcement, do something real. Take this back to the drawing board. Use the things that I and other members have said and make it a real combating illicit tobacco bill. Combat the bad guys. That's the idea about this bill. Don't let them operate the way they've been operating for the last four years. Don't let them get to 100 per cent of the illicit tobacco market. What will happen once they get to 100 per cent is they will increase the price again. They will make a peak price. They will work it out. They're smarter than government. They will work out what the pain price is that the average punter will pay, and that is what they'll charge them. That is what they'll continue to do until we break its back. This bill does not break an egg. It does not do anything to address those real issues. Take it as read that, if this bill passes with no changes, you will see no changes outside of this bubble in the real world.

Peter Khalil (Wills, Australian Labor Party, Assistant Minister for Defence) | Link to this | Hansard source

The Albanese Labor government is cracking down on illicit tobacco in Australia, and the Combatting Illicit Tobacco Bill 2026 is really about restoring the rule of law in a market increasingly dominated by organised criminal activity. Illicit tobacco is not a victimless crime. It funds criminal networks, undermines legitimate businesses and places unregulated products into the hands of Australians. Effective regulation depends not only on strong laws but on the public's confidence that these laws are enforced fairly and consistently. The rapid growth of illicit tobacco threatens public health, undermines confidence in our regulatory system and funds other illegal criminal activities.

This bill will address a regulatory gap, allowing our law enforcement agencies greater enforcement powers, because no Australian should have to live in fear of the next firebombing in the illicit tobacco gang war. That's exactly what people have been fearful of. We've seen this across the news for the last period of time where the firebombings and the threats have occurred. This is serious also in the sense that illicit tobacco directly funds the commission of other crimes like murder, kidnapping, arson and assault, and organised criminals have turned to importing illicit tobacco because they believe it is less risky than smuggling drugs.

This government, the Albanese government, is going to change that calculus. Our focus is to shut down illegal shops and make this trade unprofitable so that the crime is not worth the risk. Organised criminals need to know that importing illicit tobacco carries serious penalties, including jail time. Under our government, we are going to crack down on these criminals because there is no place for this illegal criminal activity in our community.

Selling cigarettes is not against the law. These laws are aimed at organised criminals and the front companies they use. This government is doing everything to balance the need to combat criminal activity without undue burden on legitimate and legal business. So the bill will seek to amend the Customs Act 1901, the Excise Act 1901 and other relevant Commonwealth legislation to expand law enforcement powers to investigate illicit tobacco related offending and to raise the penalties for such offences.

These aren't new powers. We're enhancing powers to investigate illicit tobacco offending and increase the consequences. The key measures in the bill include increasing criminal penalties for the importation, possession, buying, selling, supply, production or manufacturing of illicit tobacco; enabling the use of telecommunications access powers in relation to illicit tobacco related offences; and expanding the scope of search warrant powers, information disclosures, the availability of examination orders and the grounds for making a non-publication order.

These amendments do not introduce unprecedented investigative powers. Instead, they aim to provide greater consistency and clarity across existing search warrant frameworks. They're also not expected to impose additional legislative burdens on business or community organisations in Australia. Previously there has been legislative amendments introduced to address the risks associated with the illicit tobacco market, including on its profitability, however, the market has continued to have exponential growth and profitability for criminal factors.

It is quite obvious to all that more work is needed to deter, disrupt and prevent further growth in the market and that's exactly what we are debating today—tougher penalties for those who profit from illicit tobacco—because without these amendments penalties and law enforcement powers will remain inadequate. I would hope that all those across the aisle would understand that. Without these amendments, law enforcement will not have the powers they need to combat these criminal groups. Without these amendments, things will only get worse. Taken in conjunction, the reforms in this bill seek to rebalance the risk-to-reward calculation made by criminal actors. This bill will raise offence penalties to match the severity of the harm being caused by the illicit tobacco trade and will enhance Australia's proceeds of crime regime to better target criminal profits from illicit tobacco.

This illicit tobacco problem is really a wicked problem for Australia. It has caused wide-reaching problems for public health and public revenue, and it now presents itself as a serious organised crime crisis. Communities across our country are increasingly witnessing the violence and intimidation linked to illicit tobacco operations, from illegal storefronts to organised fire bombings and extortion. One has just got to turn on the nightly news to see that criminal groups have used illicit tobacco as a vehicle to bolster their profits and to fund intergang warfare.

Organised crime groups are earning a whopping $4 billion to $7 billion in profits. This is funding other crimes such as arson attacks and murder. This trade is further fuelling that violence, the fire bombings, the intimidation as these groups actually fight each other in a turf war around distribution—something that has become an all too common practice here in Australia—and they are not victimless crimes. They harm communities, they harm honest retailers, they harm workers, they harm people living in nearby homes and they are a harm and a risk to public safety, not to mention to the lives of the firefighters who are put into danger every time one of these attacks occurs.

This bill responds decisively to a growing threat to public safety. In my electorate of Wills, organised crime groups have firebombed storefronts in Coburg, in Brunswick East, in Glenroy, in Hadfield, in Pascoe Vale and in Fawkner. This is a list of nearly every suburb in my electorate that has had a firebombing. Earlier this year, in my local suburb of Glenroy, organised crime groups committed six different arson attacks and shootings in two months alone. One shop in Glenroy had been targeted twice in one month, and another shop was firebombed and then shot at three weeks later, making those incidents the fourth attack on a single business. Local traders in Glenroy have expressed that they will be the next shop targeted. One trader was quoted in the Sydney Morning Herald as saying: 'I don't feel safe, but I still have to go to work. We shouldn't have to put up with this. We're not used to ongoing crime like this in our country.' It is unacceptable that members of my community do not feel safe going to work or running their businesses.

The illicit tobacco trade is fuelling this violence and this intimidation. The risks and the harm that illicit tobacco pose to our community cannot be understated. That is why this bill is so needed. It's so vital to come down hard on these criminals. Allowing this trade to continue would not only risk unwinding decades of success in tobacco control and lowering smoking rates in Australia but risk tearing apart the very safety and wellbeing of our own communities, such as in my electorate of Wills.

We can't let this wave of violence continue. We have a responsibility to wipe out illicit tobacco and the organised crime crisis it brings. We're going to disrupt and dismantle border threats to stem the flow of illicit tobacco before they make it to our shores. We're going to enhance detection, disruption and destruction of illicit tobacco and vapes at the border and within the community. And we're going to have better connection and coordination of efforts across the Commonwealth and the states and territories, including the establishment of a national disruption group. This bill will work in conjunction with our existing efforts to crack down on illicit tobacco.

Since 2023, the Albanese government has provided $346 million in funding to the Australian Border Force to crack down on illicit tobacco and vaping products. We have also appointed the first ever Illicit Tobacco And E-Cigarettes Commissioner, with $21.3 million allocated in the 2025-26 budget to help coordinate national efforts to combat illicit tobacco. We are seeing real and tangible outcomes as a result of the government's policy. Since January 2024, more than 14 million vaping products and accessories have been seized by the Australian Border Force. In just the last six months of 2025, more than one billion illicit cigarettes were also seized. Interjurisdictional relationships have also improved, as it is crucial that the Commonwealth, the states and the territories work together on these efforts. That includes new cooperation through the National Illicit Tobacco and E-cigarette Coordination Forum.

By increasing the consequences for those dealing in the marketplace of illicit tobacco, we are further strengthening our ability to thwart the harms placed on our citizens, our shop owners, our businesses and our communities. Together, the reforms in this bill are aimed and will protect public health, support legitimate businesses and disrupt the organised crime networks that profit from the illicit tobacco trade. Our coordinated national response further ensures Australia remains safer, healthier and fairer for future generations to come. I commend this bill to the House.

Tim Wilson (Goldstein, Liberal Party, Shadow Treasurer) | Link to this | Hansard source

I want to start by saying that we support this legislation and the spirit in which it's achieved, but I also want to reflect on just how inadequate it truly is. Let's look at the reality. Under this government, there has been a thriving illicit tobacco market that has fed organised crime across Australia, and nowhere has it been more acute than in my home state of Victoria. Frankly, it's an absolute national disgrace that this crisis has allowed itself to get to this point. We have seen Australian small businesses firebombed by criminal gangs as part of a turf war over an illicit product, and this didn't come out of nowhere.

Australians were consistently warned about the consequences of a reckless approach to tobacco regulation by so many people, including academics and myself. That fell on deaf ears inside this Labor government and earlier Labor governments. None of this is a surprise. None of this is a shock. It is a direct and deliberate consequence of the policy design of the Albanese government, the Gillard government and the Rudd government. Think about it. You have a situation where you take a lawful product, you put it into plain packaging akin to other illegal products which already thrive within organised criminal gangs and then you increase the tax rates to the point where it becomes an attractive proposition for organised crime gangs to enter into the market and to be able to enjoy outrageous proceeds off the back of otherwise lawful citizens.

We've seen this in human history. One of my great political heroes is a woman by the name of Pauline Sabin, and I suspect nobody else in this chamber has heard about her. Pauline Sabin was a woman who was part of the saloon movement that tried to introduce prohibition in the United States. She supported it because she wanted to stop the issues of domestic violence, which were particularly targeted towards women at the time from drunken men coming home from saloons. She then watched the prohibition movement not only lead to a flurry of illegal product but turn lawful citizens into unlawful actors. People actively engaged in subversion of the law at every level just to be able to go about their daily lives and consume a product. At the time, what were called the progressives, by the way—we need to be clear—thought that they knew how to live people's lives better.

That is exactly what has happened here. Thank you, Nicola Roxon. Thank you to the ministers who have decided to firebomb small businesses across this country under poor policy framing. What we have had is a replication of the problems of prohibition in Australia at every level—problems where the federal government introduced legislation and then the states couldn't be bothered or failed to enforce it, creating premiums for illegal activity, which have been harvested by organised crime and profiteering. We have had consistent failure of enforcement at every level—state and federal levels—thinking that they can somehow decide what goes on in the hearts of men. What we've now seen, of course, are turf wars. Exactly the same thing occurred in prohibition, where people died. Now, we're seeing the firebombing of small businesses across the country.

We're seeing it in the Goldstein electorate too. There have been firebombings, I understand, in Moorabbin. Lawful businesses that have not been involved in the illegal tobacco trade have also been targeted in Sandringham, all because we have seen a profiteering motive that government has actively stoked. As a consequence, the profits have been so great that they have led to the attraction of organised crime gangs from overseas and our own country to profiteer.

It's even worse than that. We've gone from a problem of just illegal tobacco to now shifting towards illicit alcohol. This is one of the things that's emerging very strongly in the state of Victoria. There are distribution networks available to those who are engaged in unlawful tobacco, and now they're shifting over to illicit alcohol on the same basis—that the excise is providing such a premium that they can displace lawful products.

What a shock: when there's an expansion in the volume of illegal products, organised crime gangs don't report their data to the ATO. So what we have is a government that's still indulging in the idea that somehow it's seeing cigarette rates and consumption rates decline and that the Australian community is going to be healthier as a consequence. The drunken denial that we continue to see from this government, not just drunken denial to its broken promises in the budget but drunken denial and deceit in its response to illicit tobacco, is one that is now costing the taxpayer billions in forgone revenue. As I pointed out, illegal gangs tend not to pay tax and tend not to report their data to the Australian tax office. And, of course, we're continuing to live with the downstream consequences of the health impacts associated with what is likely to be a rising level of illicit tobacco consumption.

I do appreciate that the government has finally woken up after fuelling this crisis—fuelling a situation where businesses are being firebombed, fuelling the very environment that has led to an otherwise lawfully consumed product becoming illicit to the benefit of organised criminal gangs. I acknowledge that they've finally woken up to the fact that even they can't go on pretending that there's nothing wrong here. Now, they're taking, frankly, pretty modest measures to say 'maybe we better stamp this stuff out'. The Australian small businesses who they've targeted with a firebombing in their budget have now experienced firebombing in the literal sense—by the organised crime gangs that profit off illicit tobacco.

A consequence of this trade is that there has been a decline in the pretty basic proposition of respect for the law. Again, I go back to the prohibition movement: we saw exactly the same thing then, back in the 1920s and 1930s in the United States, when honest citizens were engaged in dishonest activity or illegal activity, and the law actually propagated a disrespect for the law. This government has been an active participant in creating disrespect for the law. That is a disastrous outcome for our community.

We have had a complete overdose of denial and deceit by this government about the impacts of its policy arrangements and a complete unwillingness to actually address the root cause of the problem. I understand that Labor does not want to confront this problem, but Australians are living the consequences of the problem Labor caused: illegal activity, organised crime, violence and firebombing on our streets, in our strip shops. That has increased not just the cost to small businesses—although it has directly for those who are attracted to it—but the cost to all small businesses across the board, because what we've seen is an increase in insurance premiums directly off the back of the government stoking criminal conduct.

I can't believe that, as we're debating this bill, some of the Labor members are saying how virtuous their actions are. They have been directly complicit in fuelling organised crime. They have been directly complicit in supporting the legislation that has created the situation that we are now facing as a country. They have been directly complicit—

Marion Scrymgour (Lingiari, Australian Labor Party) | Link to this | Hansard source

Assistant minister, on a point of order?

Josh Wilson (Fremantle, Australian Labor Party, Assistant Minister for Climate Change and Energy) | Link to this | Hansard source

The shadow treasurer is reflecting on members, if he's making a claim about direct complicity of members on this side in the kind of conduct that he's describing. I think you should ask him to withdraw.

Marion Scrymgour (Lingiari, Australian Labor Party) | Link to this | Hansard source

I think that you're directly impugning another member, Member for Goldstein. I'd ask you to withdraw your last comments.

Tim Wilson (Goldstein, Liberal Party, Shadow Treasurer) | Link to this | Hansard source

I'm not sure that I can withdraw those comments because Labor members have supported the budgetary measures that have got us to this point. Are we really contesting this, Deputy Speaker?

Marion Scrymgour (Lingiari, Australian Labor Party) | Link to this | Hansard source

I think you said that members on the other side have been complicit in fuelling this organised crime, which is directly impugning members on that side of the House, Member for Goldstein. Either you withdraw it or you change the wording of what you've said.

Tim Wilson (Goldstein, Liberal Party, Shadow Treasurer) | Link to this | Hansard source

I'm happy to change the words of what I've said, Deputy Speaker, but I think we need to be realistic. No-one actually believes that the stoking of excise and the continuing raising of excise on tobacco by this government has not been a direct contributor to the proliferation of organised crime. I'd love to hear a Labor member contest this and say in their speech: 'No, it's got nothing to do with excise. It's just magically appeared out of nowhere.' The profiteering of organised crime and the reason for the very incentives that mean they've stepped into the marketplace are anything but. That's why you tend to get organised crime engaged in low-product-value, high-margin products. One is illegal drugs. I don't think we're disagreeing on that. One is illicit tobacco. I don't think we're disagreeing on that. It's just like, once upon a time, they engaged in things like selling illegal DVDs. But no-one buys DVDs anymore, so that has been taken out of the equation.

The tax rates are set in the federal budget last I checked. We've got one of these federal budgets before the federal parliament right now. Last I checked, Labor members voted for the last four budgets. So, alright, I'll set it up this way. Labor members of parliament vote for a budget. The budget then increases the tax rates. The tax rates then increase the incentive for organised crime. The organised crime then profiteers. But there is no connection between any of that that brings any of the Labor members into complicity in that activity. I need to be clear about that. It's just a fantasy. We're all making it up. I can tell you it's only in the parliament of Australia, in the House of Representatives, that people don't think that there's some sort of connection between those series of events that have led now to firebombing of small businesses and increasing insurance premiums. The biggest explosion of organised crime in Australia's history has been under this government. Now there's the risk that we're going to see equivalent behaviour with the expansion of illicit alcohol across the sector, which is leading to attacks on small grocery shops, attacks on small businesses and firebombing that's risking people's lives and destroying small business. But, hey, according to the member Fremantle, there's no connection between any of that. It's just a coincidence.

I think we've just got to get real. It's not a coincidence. It's real. It's what Australians are living. It's propagating crime. By the way, that criminal activity and the money that's raised from that activity is then going on to fuel other things, like terrorism. This, by the way, has been a point that has been made by our police services and is very distressing. I know that the Labor members don't like drawing the connection between their budget, their tax regime and organised crime and terrorism, but I'm afraid it's real. Australians are living with this, but we've seen this constant attitude of being drunk on deceit and drunk on denial from this government about the reality of what it is its doing. But Australians are living it. I have no issue calling this out, because there has to be a point at which we in this parliament wake up and people actually start to realise the consequences of their actions. As I outlined, it was the progressive movement in the early part of the 20th century that was responsible for prohibition that went on to lead to the propagation of organised crime, the proliferation of organised cartels and the profiteering, as I said, of organised crime. But, more importantly, it led to violence and death on the United States's streets.

Once again, we are seeing a repetition of behaviour. We have progressives who think that their grand intentions are greater than the actual lived outcomes of Australians and that, if only they were left in charge and they had every lever that they could pull at their discretion, all of a sudden they would build a better society. In fact, that's wrong. They're handing our streets over to organised gangs that then use that money to proliferate criminal activity which harms every Australian either financially or in their safety and has gone as far as financing terrorism, and—can I tell you what?—some of us are sick of it.

Some of us are sick not just of the drunken denial from the government about the consequences of this but of the fact that there seems to be this complete disregard of what they're doing to Australian streets. We know that crime is a massive issue in our country. We know who's paying the price for the Labor government's denial on these issues and the consequences of their decisions. We know, because we're living it in our communities and our on our streets, and, while there might be Labor members who like to turn a blind eye, the Australian people are not turning a blind eye.

This measure, of course, is a step in the right direction, but it is a long way from how far we need to go, and until the Labor member for Fremantle, the member for Macnamara or any other members on the other side of this chamber are prepared to be honest with the Australian people and stand up—and we know honesty, by the way. We know full well it was not exactly something that came naturally before the last election. But if they are going to do it, we'd need a sense of honesty about what the consequences of Labor's policy are going to be. I can tell you that the small businesses of the country are desperate for a sense of leadership from this parliament, and it certainly isn't being provided by this Labor government.

Susan Templeman (Macquarie, Australian Labor Party) | Link to this | Hansard source

It's pretty disgraceful hearing a member opposite talk about lack of action. These are not newly emerged issues. These are issues that, when the member for Goldstein was last in government, we supported that government in trying to take action on. Did they go far enough? No way. But we supported those steps.

I'm going to read to you from a media release, put out in September 2018 by the then minister, the Hon. Stuart Robert MP. It talked about cracking down on the illicit tobacco black market. This is not something new that's just happened since we came to government. This has been something that has built up, and governments prior to us have failed in being able to stop it. Mr Robert, at that time, spoke of the actions they were taking and the changes they were making on duty liabilities being paid when tobacco is imported into Australia. The release said:

Together with the newly established, Australian Border Force-led Illicit Tobacco Taskforce and the proposed import permit requirement for tobacco announced in the 2018-19 Budget, the Government is ensuring the Australian border is even more resilient to organised criminal groups that facilitate tobacco smuggling.

"Tackling duty evasion and black economy activities in the tobacco warehouse environment will disrupt illicit tobacco supply chains and deny organised crime syndicates access to the illicit profits that fund their other criminal and black economy activities," said Assistant Treasurer Robert.

"This will reduce criminal activity, protect law-abiding local businesses and provide an estimated $3 billion in revenue to the Commonwealth," Assistant Treasurer Robert said.

That was obviously very well intentioned. But clearly, from September 2018 to now, we have not seen those measures make a significant difference, so we are taking further steps, as we have done all through our time in government, to tackle an issue that both sides agree is a problem. In the way that we were supportive when we were in opposition, I look to the support of those opposite for the efforts that we're making.

Across Macquarie, we're seeing those bright yellow stickers on the front windows of tobacconist shops suspected of selling illicit tobacco products or selling tobacco without a licence. What goes along with those stickers is a three-month closure for that tobacconist. I've seen these stickers in the Riverview Shopping Centre in Windsor, which is just up the road from my electorate office; inside the Richmond Marketplace in Richmond; and on the main streets of some of our towns, including, in Springwood, next door to Dbl Ristretto, a very popular coffee shop. They are a welcome indicator, right in front of our eyes, as we go to our local shops, that you can see of actions being taken at the state level to combat the availability of illicit cigarettes, vapes and loose-leaf tobacco in our communities. The Commonwealth, states and territories are working together to reverse the equation for organised crime at every step and in every way to make the illicit tobacco trade more risky and less profitable, disrupting the illicit supply chain and shutting down illegal shops. This bill is another step in that process.

I think people have asked themselves, 'Can I do something if I see shops selling illicit cigarettes or illegal vapes?' The answer is yes. Any one of us can make a report. There are three different ways to do so. You can report suspicious sales or illicit products to Border Watch on their 1800395706 number or at borderwatch.gov.au, to Crime Stoppers on 1800333000 or crimestoppers.com.au or through NSW Health, in New South Wales, for local enforcement of tobacco and vaping laws.

Retailers who are found to be noncompliant with closure orders may be subject to further enforcement actions or penalties. A local New South Wales court can issue a long-term closure order of up to a year if it's satisfied that illicit tobacco or illicit vaping goods have been, or are likely to be, sold or if tobacco or non-tobacco smoking products are sold without a licence.

To disrupt the illicit tobacco trade, we have to think about things at every single stage—pre border, at border and post border. Preborder intelligence sharing has been enhanced with partners such as the UAE, China, Singapore, Sri Lanka and others. The best container of illegal tobacco is one that never even reaches Australia's shores. At the border and post border, Australian Border Force data tells us that in 2024-25 they achieved record levels of seizures, supported by $188 million of extra Commonwealth funding. They seized 2.66 billion cigarettes, and that's up more than 320 per cent on four years ago. The national disruption group, led by the Australian Border Force, is up and running, bringing together Commonwealth agencies and all states and territories, with national weeks of action planned across the country. The Police Ministers Council's received advice on 50 pieces of legislative reform and laws that are now being strengthened.

The Commonwealth's Combating Illegal Tobacco Bill 2026 that we're debating today will raise penalties, activate intelligence and law enforcement techniques, such as wiretaps and computer intercepts, and strengthen proceeds-of-crime laws. Hitting criminals where it hurts means using every single tool and more rapidly taking their profits, cars, cash, houses, boats and other toys away. Priorities identified for states and territories include licensing seizures, shutting down illegal shops, going after landlords and lifting resourcing of frontline enforcement.

The Commonwealth funding to states and territories is now flowing, with $84 million extra to help put trained people on the ground, improve licensing and enable joint operations. AUSTRAC is working with the banks and service providers to shut down the money flows that keep illicit tobacco profitable. Hundreds of accounts have already been closed and payment systems stopped. This bill expands law enforcement powers to investigate illicit tobacco related offending and increases the consequences for criminal actors involved in the illicit tobacco market. It's a crucial step in addressing the rapidly expanding illicit market.

We know illicit tobacco is no longer just a health or revenue problem. It's a serious organised crime activity and is a major source of funds which are used to fund other serious harms and crimes. The illicit tobacco trade, as I said at the start, is not new, nor is it a problem isolated to Australia. It is a global problem. The first strike team, in fact, was set up under Border Force in 2015. We need to keep fighting it and not blame each other. Those opposite need to recognise that, just as we supported the steps they made, we need their full support in taking these actions.

The Illicit Tobacco and E-cigarette Cigarette Commissioner report estimated that the value of the illicit tobacco market was between $4.1 billion and $6.9 billion in 2024-25. Organised crime groups are earning between $4 billion and $7 billion in profits, funding other crimes like trafficking scams and money laundering. We know this trade fuels violence, firebombings and intimidation and risks the unwinding of decades of success in tobacco control policy and lowering smoking rates in Australia. These are not victimless crimes. They harm communities, honest retailers and workers, and they make the public less safe.

In that context, this bill seeks to achieve two objectives. One is to rebalance the risk-to-reward calculation for criminal actors by raising offence penalties to match the severity of the harms being caused by the illicit tobacco trade. The other is making the proceeds-of-crime regime more effective to go after the profits generated from illicit tobacco, which is of course the main motivation. Since 2023-24, the Albanese Labor government has provided $346 million in funding to the Australian Border Force to crack down on illicit tobacco and vaping products. We also appointed the first ever Illicit Tobacco and E-cigarette Commissioner, with $21 million allocated in the 2025-26 budget to help coordinate those national efforts that are now underway. The three key focuses of the government's action are, firstly, to disrupt and dismantle border threats to stem the flow of illicit tobacco and vapes to Australia before they make it to our shores; secondly, to enhance detection, disruption and destruction of illicit tobacco and vapes at the border and within the community; and, thirdly, to have better connection and coordination of efforts across the Commonwealth and states and territories, including through the establishment of the national disruption group.

Since January 2024, more than 14 million vaping products and accessories have been seized by the Australian Border Force. In just the last six months of last year, more than a billion illicit cigarettes were also seized. This government's focus is simple: shut down illegal shops, choke off the money and make this trade unprofitable. Over the last six months, interjurisdictional relationships between the Commonwealth, states and territories have rapidly improved and we've seen a strong new cooperation through the National Illicit Tobacco and E-cigarette Coordination Forum. I really want to give a shout-out. South Australia and Queensland are already showing illegal trade falls when enforcement hits 100 per cent of an area, and Victoria is moving to strengthen closure and landlord laws. These are really good things to see.

The Albanese government remains committed to working with our state and territory partners to continue to tackle the illicit tobacco trade, and I would hope those opposite are with us all the way.

Anne Webster (Mallee, National Party, Shadow Minister for Regional Development, Local Government and Territories) | Link to this | Hansard source

I rise to speak on the Combatting Illicit Tobacco Bill 2026. This bill is before the House because Australia is no longer dealing with a small compliance problem. Under Labor we are dealing with a black-market crisis, a public health crisis, a law and order crisis and a crisis of confidence in government policy. This did not happen by accident. It is not something Australia can blame on events overseas. It is homegrown, and responsibility sits firmly with Labor. The bill increases penalties, expands investigative powers, allows telecommunications interception in illicit tobacco investigations and strengthens unexplained-wealth, search warrant and proceeds-of-crime powers. Those are serious tools and they are needed, but let us be honest about why we are here.

Under Labor legal tobacco has become so expensive and nicotine rules have become so distorted that a huge part of the market has simply gone underground. People have not stopped using nicotine; they have moved outside the legal system Labor was supposed to protect. The Australian Bureau of Statistics says nicotine consumption in Australia increased by almost 40 per cent from 2017 to 2025. It also says illicit sources rose from 12 per cent of total tobacco consumed in 2017 to 80 per cent in 2025. That is not a rounding error. That is not bad luck. That is Labor's policy failure in plain sight. That is Labor's legacy. That is the health minister's legacy. They have allowed illegal tobacco to become normalised in the minds of too many Australians.

The ABS says household spending on legally purchased cigarettes and tobacco has almost halved since 2020, but please don't get excited. Labor cannot pretend Australians have suddenly stopped smoking. The evidence shows more people are buying illegal tobacco instead. An article in the Australian on 3 June showed the explosion of illicit tobacco in stark terms, with the problem taking off after the June 2022 quarter—believe it or not, Labor's first quarter in office. In fact, someone in the House today said to me that their pouch of tobacco used to cost them $120 but now costs them $20. How is that possible?

Before Labor came to office, daily smoking was continuing to fall under the coalition government. The Australian Institute of Health and Welfare says daily smoking among Australians aged 14 and over fell from 19 per cent in 2001 to just 8.3 per cent in 2022-23. Labor points to legal sales as though the problem is shrinking, but legal sales alone no longer tell the full story. Actual nicotine consumption is rising. That is what happens when government policy drives people out of the regulated market and into the hands of criminals.

Labor's failure carries an enormous public health cost. The AIHW has estimated the social cost of tobacco at $155.4 billion in 2021, projected to rise to $159.7 billion in 2022-23, with healthcare costs alone estimated at $7.9 billion. Tobacco remains the second leading risk factor driving Australians' burden of disease, accounting for 7.6 per cent of total disease burden in 2024. Labor wants this debate to sound like it is only about excise revenue or personal choice. It is not. It is about people getting sick. It is about the pressure that smoking related disease puts on families, hospitals and taxpayers and communities who are living with increased crime, and it is about a government that has let the burden fall hardest on those with the least access to care.

In 2022-23, the AIHW reported that 20 per cent of people in remote and very remote areas smoked daily, compared with seven per cent in major cities. Women in very remote areas were 5.5 times more likely to smoke during pregnancy than women in major cities. For Aboriginal and Torres Strait Islander people living in very remote areas, smoking rates were 46.7 per cent, compared with 20 per cent in major cities. As shadow minister for regional health, I say this plainly: Labor's tobacco policy failure hits hardest in regional Australia, where health services are already stretched, household budgets are already under pressure and people have fewer doctors and fewer services to turn to. I've been saying for seven years in this place that your postcode should not determine your health status, but under Labor it absolutely, increasingly does.

Then there is vaping. The AIHW says seven per cent of Australians aged 14 and over were recurrent e-cigarette users in 2022-23. The Department of Health, Disability and Ageing says one in six teenagers aged 14 to 17 have vaped and one in four people aged 18 to 24 have vaped. It also says young people who vape are three times more likely to take up smoking. I remember the arguments when vaping came in that it would be an off-ramp from smoking. I don't think so. I don't think anybody who looks outside in our streets and sees teenagers vaping more and more, eventually going on to smoking, would believe that. Australian research has warned that vaping could add at least $180 million a year in health system costs from only one part of the group of vape users who go on to smoke. That is on top of the already huge cost of smoking related disease. This is also why Labor's failure to control the black market is such a public health disaster.

For decades, governments have worked to make the dangers of smoking clear through warning labels, plain packaging and strict point-of-sale rules. Those protections only work when the market is regulated. In the black market, which Labor has allowed to grow, those protections disappear. Estimates published before the latest ABS numbers had already placed the illicit tobacco market at around 55 per cent of the total market in 2025, valued at about $5.6 billion, with missed excise revenue estimated at between $7.7 billion and $11.8 billion. Treasury has downgraded tobacco excise revenue by $8 billion over the next five years. So, under Labor, we have a black market undercutting lawful sellers, hollowing out revenue, weakening public health warnings and making organised crime richer. That is not a small policy problem. It is Labor's double failure. It is a double failure.

Labor's response has been a half-baked vaping prescription model. In fact, that is too generous. It is not half baked; it barely made it to the oven. The pharmacy prescription framework has not worked. I said at the time it would not work, and here we are. Illegal supply remains dominant, and pharmacists did not ask to be conscripted into Labor's failed nicotine controlled experiment.

Labor's failure is also feeding organised crime. The Illicit Tobacco Taskforce was created to detect, disrupt and dismantle serious organised crime syndicates dealing in illicit tobacco. The Australian Criminal Intelligence Commission has said that organised criminals view illicit tobacco as low risk and high reward. Even the Albanese government admits the illicit market has become a serious organised crime problem. The ACIC links illicit tobacco to organised crime entities and outlaw motorcycle gangs. That is why this bill gives agencies stronger tools and lifts penalties. But the reality is even darker than that. This is not only an illicit trade; it is a violent one. How many firebombings, how much intimidation, how much violence and how much criminal behaviour must communities endure before Labor accepts responsibility and says enough is enough?

I've been told confidentially by police that senior officers are effectively unable to get involved at the retail illicit tobacco level unless matters escalate into overt violence, arson or other serious criminal conduct. That should concern every member of this House because it means help comes after communities have already been put at risk. Hospitality venues are now vulnerable, too. High liquor excise and severe economic pressure may be creating incentives for illicit alcohol to follow the same path. Some venues are tempted to mix illicit liquor with legal liquor just to survive in Labor's high-cost economy. If Labor does not act properly, the organised crime business model built around illicit tobacco could spread further. That should alarm every Australian.

Under Labor, health labelling has been undermined, point-of-sale controls have been undermined, legal retailers have been undercut, revenue has been lost, organised crime has thrived and Australians are paying the price. In my electorate, a constituent named Peter spelt out what this means for a lawful small business. His legal cigarette sales fell from about $10,000 a week to about $1,000 a week. One former customer told him they were saving $400 a week by buying illegal cigarettes. That is what Labor's failure looks like on the ground. Honest regional businesses are losing lawful sales while criminals cash in. If your business is next to an illicit tobacco store, you face another problem altogether. Insurance companies are charging high premiums or refusing to insure shops at risk of collateral damage from firebombing. I cannot believe that in 2026 we are talking about brazen organised crime spreading through modern Australia in this way. It is an absolute indictment on Labor at federal and state levels.

Enforcement matters, but enforcement alone cannot fix a market that Labor's own policy settings helped drive underground. If Labor wants to restore public health outcomes on tobacco and vaping it must confront the criminals. But it must also confront the excise and regulatory settings that helped create this opportunity in the first place. The tobacco excise is simply too high. I'm told that cigarette price settings in 2019-20, when the coalition was in government, were still broadly within consumers' willingness to stay in the regulated market. Under Labor, the tobacco market is broken. Public health warnings are not getting through. Lawful small businesses are being punished, criminals are being rewarded and decades of work to reduce smoking are going quite literally up in smoke.

This bill may give agencies stronger tools, but it is far too little and far too late. Minister Butler, the health minister, will be judged for this failure. Labor will be judged for this failure. And communities like mine will keep paying the price until Labor has the courage to fix the mess that Labor helped to create.

Matt Gregg (Deakin, Australian Labor Party) | Link to this | Hansard source

I rise to support the Combatting Illicit Tobacco Bill 2026. I think every member of this chamber has seen evidence of the rapidly increasing illicit tobacco market in our communities—dodgy-looking candy stores. There's one in my area where half the shelves are filled with aluminium barbecue trays, as if that's the centre of the business. We all know where they are; we all know what they do. It's created a sense of lawlessness and an undermining of respect for the law that cannot be tolerated any longer. It's been a problem that's been rising for a long time.

While some will try to counter it in partisan terms, it's worth remembering that the Illicit Tobacco Taskforce, which was set up back in 2018, was during the coalition government, and then there was a Senate report in I think around 2020. That's not to say that it's the coalition's fault or Labor's fault. This is something that's been coming for a while. But, as other colleagues in this House have spoken about, the risk-reward ratio for selling illicit tobacco has made it all too tempting for criminal enterprises, which deal this substance much as they do other illicit substances: creating supply chains, exploiting vulnerabilities in our system and chasing the money where it lies.

So the important thing with this legislation is that it helps to change that risk-reward ratio. It makes very clear that this is a serious offence. Its connection to serious crime itself means that the gravity of this offence gives it a serious aspect, and it needs to be treated as such. We know the industries that are driving this. We know that serious organised crime is involved and that it is doing real harm in our communities. We've seen businesses that are completely uninvolved in tobacco face far higher costs because their strata fees have been increased by insurance costs, driven by risks associated with having tobacco retailers nearby, both legal and unlawful.

So this is having a real impact on our communities. It's having a real impact on our local economies. And it's something that all of us in the community see as this shameless, open lawlessness that needs to be dealt with in a clear and decisive way. We've seen in jurisdictions like South Australia and Queensland that where we have clear laws and we go ahead and enforce them it is incredibly effective in combating the many mischiefs associated with this market.

This bill is a further investment, a further step to ensure that we have clear and strong laws that can be enforced by our officials across the country to ensure that there is a consistent approach and that the severity of the impact of this illicit trade is reflected in the seriousness of the crimes as recorded in legislation. While it is around excise and revenue raising, to me that's incidental. It is about the safety of our communities, it's about the rule of law, it's about combating serious crime in a real and serious way, and it's about ensuring that ill-gotten gains are recovered and treated for what they are and that there is nothing to be gained from selling illicit tobacco at any level. We have to be clear, strong and decisive. I, as much as anyone, get frustrated when I see consumer affairs or council employees politely knocking on the doors of these retailers. I also want to see police kicking down those doors—simultaneously with other venues, because we all know they text each other and know what's going on.

We need strong law enforcement around this, and that will be supported by having strong laws made in this parliament that will apply across Australia to ensure that those tools are available to our law enforcement agencies. As part of that, the tools include surveillance provisions enabling us to detect, disrupt and respond to acts involved in this supply chain to ensure that we're actually disrupting this illicit trade and that there is no profit to be gained from engaging in this industry. It's hurting people, including our most vulnerable, in areas where people haven't got a lot of spare money and whose access to supports is minimal.

We're not dealing with honest actors here; we are dealing with crooks. We are dealing with bikie gangs. We are dealing with some of the most serious criminals in the country who have found very attractive trade for themselves. And, generally, it's not the only stuff they're selling. They're involved in all sorts of illicit trades. This is one that they've found to be rather profitable, because it's a highly addictive substance, it's cheap to purchase, they've found various ways to get it into the market and there is demand.

Excise is a policy that's existed for a long time. It's been one of the great successes. I know that some are arguing that those excises should be cut in order to support the legal trade in tobacco. If there is one industry that I don't support—in addition to the criminal industry—it would be the tobacco industry. These have not been honest brokers. These are a lot of the same folks that said: 'Don't worry; vaping will be the solution to smoking. That will help us get over these addictions.' We all know that's a load of crud. The reality is that these are self-interested companies. They have been in the industry of death for decades, and I don't think I've ever seen that industry on the side of the angels on any topic. So I think we need to view any remarks backed by industry with a healthy degree of scepticism. While I'm not here to bag local retailers, we've got to remember the history of this industry. It's one whose messages should be taken with a grain of salt, particularly when those remarks happen to align with self-interest on their part.

But I think, as a starting point, there is nothing wrong with saying that we should enforce the law. The laws should be strong, they should be consistent and they should be applied without fear or favour. We need to ensure that people understand that there are consequences. This goes to deterrence, both general and specific, in that, when a sentence is handed down, anyone thinking of getting involved in that kind of activity realises that it's not going to be on and that engaging in that industry is not going to be conducive to a long, happy and prosperous life. It's also about dealing with individuals to make clear that this is simply not acceptable to society, because this industry has got to a point where we can no longer afford to tolerate it.

The harm that it is causing is real. It's beyond economic, and it's beyond budgetary. It goes to the rule of law. It goes to the safety of members of our community. It goes to the affordability of conducting legitimate retail business and to making sure that our communities remain safe spaces as much as possible. It's particularly exploitative. It's targeting our most vulnerable: those who have financial constraints. Rather than having the supports out there to help them deal with their addiction or the disincentives that have historically, for years and years and years, driven reductions in smoking rates, they've been undermined by the creation of this industry. We cannot let it continue to fester and to go through our communities without any response.

We've seen what's possible in multiple states. When we go ahead and take a hardline approach to these things, it is successful. We've got to make sure that our authorities are supported with strong laws so they're not looking for other breaches and things like that—that the laws around the possession and transportation of these substances are, in themselves, treated as serious offences and managed as such. That is an incredibly important development.

We've seen the value of this trade estimated at between $4.1 billion and $6.9 billion in 2024-25. Organised crime groups are making profits of $4 billion to $7 billion in a year. You can see why the temptation is there. So we know what the drivers of it are; what are the restraints? Well, that has to be strong laws. It has to be strong enforcement and ensuring that those disincentives are there, because we as a community cannot afford to tolerate it. We're going to rebalance that risk-reward calculation by ensuring that strong penalties are on the books and also that they are known and that they are enforced in a clear and public way. There will be a role for the media, a role for state governments and a role for ourselves to play in ensuring that this works, because there's no point having strong laws and court decisions that no-one hears about. We've got to ensure that the strength of these laws is promoted and understood and that we have a very clear, and hopefully united, message to the illicit trade that their conduct cannot and will not be tolerated by this parliament or by the authorities in Australia.

Since 2023-24, we've provided around $346 million in funding for Border Force to crack down on illicit tobacco and vaping products. We know that they're catching a lot of them on the border, but we also know that that, in and of itself, will not work. It happens through post. It happens through a variety of means, and not every shipping container can be checked. We've also got to ensure that there are systems on the ground disrupting every aspect of the supply chain—the warehousing, the transport—and, if it gets into a shop, getting in on the ground and taking care of that quickly as well.

It is going to have to be complemented by reforms at state levels, reflecting those in South Australia and Queensland that deal with leases and things on the ground. This is part of the solution but not the entire solution. I think it is important that we all acknowledge that this isn't a package that will get the job done by itself, but it is an important piece of the puzzle. It would be a great shame if anyone in this chamber voted against it simply because it is not a package that gets the whole job done itself.

This is going to be a partnership with state government. There's even going to be some roles for local council, local government and communities in making sure that we are holding these crooks to account because they are exploitative, they are criminal and they are undermining not only the safety and wellbeing of our community but also the lives of many of our most vulnerable citizens. These are not healthy products. They're not regulated. There have been lots of reports of dodgy packaging allowing bacteria and mould, so these cigarettes can be even more deadly than the ones sold at the corner store. We cannot show any tolerance for this stuff.

But, at the same time, the solution is not to go back to the old days and say, 'Well, let's just go back to legal cigarettes.' Actually, smoking itself is a huge public health problem. It needs to be resolved. Let's at least try enforcing the law strongly rather than just kowtowing to industry calls for bringing back legal cigarettes by making them cheaper again. I think that would be a huge drive backwards. It would completely send the wrong message to our communities. Let's, as a first step, make sure we've got a clear and comprehensive regime to deal with the illegal behaviour and show that strong, zero-tolerance approach to it. That will involve licensing regimes. It will ensure accountability. It will ensure that we know exactly who is registered and lawfully able to trade in legal tobacco products without allowing every shyster who can get themselves a retail lease to get involved in this illicit trade.

I receive quite a lot of emails from people in my community—and it's happened since I was first elected—who are genuinely concerned about the presence of unlawful tobacco businesses in our area. They know that it has a huge impact on the amenity of the neighbourhood. They know it has an impact on the businesses that are just going about their day to day—the local butcher, the local pharmacist, the local bakery—because all of them are going to face higher strata fees through insurance premiums, which makes the cost of business higher and makes them even less sustainable, particularly when times are already tough. Then they've got rapidly increasing insurance costs on top of that.

This is driving legitimate businesses way out of this industry towards the brink because the increase in insurance premiums can be quite dramatic in some of these strata organisations. Often it is a collective insurance policy that covers multiple businesses, so people who are doing the right thing all the time, have done nothing wrong and aren't in control of the situation are facing the costs and consequences of this illicit trade. Every avenue that we can pursue to take down these crooks is going to have to be pursued. I commend the South Australian and Queensland governments for showing that it can be done and that a strong, firm hand, when it comes to dealing with these crooks, actually does work. But we have to have the commitment, and the supports obviously need to be offered at all levels to ensure that that is possible. We as a government remain committed to working with our state and territory partners to tackle this illicit trade, so I commend this bill to the House.

Ben Small (Forrest, Liberal Party, Shadow Assistant Minister for Electoral Matters) | Link to this | Hansard source

In a debate like this, I think we should start with some pretty basic human behaviour because a brief study of human history would tell us that, whenever you seek to limit human behaviour with enforcement in the form of punitive taxes, human behaviour and human ingenuity always win. Let's go back to England and Wales in 1696, when a tax was levied on windows. People responded to this by bricking up their windows, and that's why you can still see Georgian buildings today with their window openings bricked up. It was known at the time as a tax on light and air and is sometimes credited as the source of the phrase 'daylight robbery'.

When it comes to the tax levied on each cigarette in Australia today, some local constituents tell me that it resembles daylight robbery. At about the same time in England, in 1662, the fireplaces were taxed. People then responded by blocking up chimneys, occasionally with fatal results from poor ventilation. In 1784, also in Britain—we could learn a thing or two from all these new tax ideas—bricks were taxed by the number of bricks taken to build a dwelling, so manufacturers simply made bricks bigger. That's why you see Georgian buildings featuring unusually large bricks.

This is not a new phenomenon. We've seen wallpaper taxes, glass taxes, clock and watch taxes, beer taxes. There were salt taxes in France, driving mass salt smuggling, which was a genuine grievance feeding into the revolution. Indeed, a salt tax in India was part of the social disruption that led to Gandhi's 1930 salt march. We, of course, saw in the US a particularly dramatic example between 1920 and 1933. It wasn't just a punitive excise tax on drinking; it was just an outright ban: prohibition, which saw a nationwide surge in organised crime and black-market activity.

I think that is useful to frame the conversation today about what is driving the illicit tobacco market, or the black market for cigarettes, in Australia. Any cursory examination would tell you that it is the excise tax. We have got to the untenable position where a lawful packet of cigarettes in Australia might cost you some $50 or $60, and the black-market cost for that same packet of cigarettes is about $15 or $20. Australians under pressure, as they are during this cost-of-living crisis, suffering under the rampant inflation in our economy that the Albanese government is overseeing, are responding by making the difficult choice of knowingly breaking the law, because illicit cigarettes are less than half the price.

I met with an IGA owner in my own electorate some months ago who opened his books to me and also disclosed that he'd been doing some online shopping. He showed me the screenshots, and it appeared to me that Australia Post might well be the biggest courier of black-market cigarettes in this country. He was able to, through a Facebook group, buy cigarettes that were cheaper than the wholesale price that he pays through his IGA supermarket. Worse than that, he showed me his books over the last three years. The rise of black-market cigarette sales has taken $1.5 million directly out of that business, a small, family owned business in my electorate. This is a crisis and not just in the terms that we have heard on both sides of the chamber tonight about the firebombings and the crime and the insurance premiums and the like but also from the kick in the guts to those retailers who are trying to do the right thing.

This same IGA owner—I credit his meeting with me because I left vastly illuminated, as I'm not a smoker—made the point that these cigarettes he was able to buy very cheaply through Facebook and obviously therefore via organised crime were branded cigarettes. They were beautiful. There was a lovely packet with the gold embossing of 'Benson & Hedges' in all its glory. There was nothing about the health risks of cigarette smoking on that packet of illegal cigarettes. Then he showed me what a lawful packet today looks like. I wasn't aware that, far beyond just having the plain packaging with the health warnings that we have, each cigarette lawfully purchased in Australia actually has to carry the health warning on it. So out of the packet which has health warnings all over it you take a cigarette that also has health warnings all over it. The idea that we can approach this issue of illegal tobacco ignorant of the fact that we're driving people away from a product that has all the health warnings on it towards a product that instead carries all the branding that the then Labor government banned more than 14 years ago seems to me to be an extraordinary oversight at the very best. Unless we acknowledge that human behaviour is at the centre of this, we're not going to be effective in tackling the scourge.

Whilst stronger enforcement and the sorts of measures that are featured in this bill—including the increased appropriations to our enforcement agencies—are welcome, they're not going to fix the problem. That's where we need to be honest with the Australian people. They can see it happening around them every day. In my community, there have been a number of raids. Indeed, I met with the south-west police recently to discuss that. They have to admit that their resources are stretched. They are still trying to deal with all of the normal sorts of enforcement that, rightly, only the police can do. WA is a long way from Canberra, and so the AFP are also stretched in their resourcing presence in Western Australia, naturally focusing on Perth. My electorate is a couple of hours south of Perth, and the problems we've had with illegal tobacco have gone right down to the bottom of my electorate, in Margaret River, and further south to Augusta. So you're talking about dragging police away from the very serious sorts of enforcement they need to be doing. They should be getting after murder and violent crime. They should be chasing down child exploitation. They should be monitoring our road safety. They should be doing all of these things. The police have readily admitted to me that a focus on tobacco enforcement is not included in their workload—and I understand why. It's simply outside the scope of their normal responsibilities.

The scale of this problem should be pretty apparent to everyone living in this country. But what is missing, and I know coalition speakers have focused on this for good reason, is the impact that the rise of black-market cigarettes has had on the budget. When we go back to 2012 or 2013, immediately after the plain-packaging legislation, we can see that excise tobacco was sitting at about $18 billion a year. The fact is that this year's budget papers have forecast tobacco excise at just $2½ billion, showing an almost complete collapse in the collection of that revenue, in the face of rising smoking in Australia—and that's the important point. This isn't reflective of the fact that we've eliminated smoking in the community. In fact, some evidence suggests quite the opposite, that we are seeing more and more smoking in young people. I do wonder if it's because they're seeing cigarettes that simply aren't subject to the health warnings and the like that we would otherwise require in this country.

To see between $8 billion and $11.8 billion in excise being evaded every year, depending on whose estimate you accept, is having a massive impact on communities across the country that are crying out for basic services like new hospitals. Indeed, the Margaret River hospital in my electorate hasn't been upgraded in 25 years, despite the fact that the local population has more than tripled in that time and the number of people living there expands even more during peak tourist season. We are seeing this desperate need for investment in health infrastructure across the country and we are seeing a collapse in the revenue associated with tobacco excise.

We have to recognise why illegal tobacco is increasing. In this case, the answer is not necessarily obvious. We ought to be talking about slashing tobacco excise in this country—not by five per cent, not by 10 per cent but by more than 50 per cent—because, until the price of a lawful packet of cigarettes is within a couple of bucks of the price available through the black market, we are simply not going to change that behaviour. Worse than that, we are making criminals out of ordinary Aussies who are struggling to put food on the table, get their kids to school and maybe have a packet or two of cigarettes a week. I don't think it's fair that we make criminals out of innocent people,

I want to see the government shift its focus, if you like, away from this ever-increasing idea of more enforcement, more resourcing for agencies to chase these people down. The numbers speak for themselves. The ABF, the Australian Border Force, seize some 2½ billion cigarettes a year, which is a 320 per cent increase in seizures. That's great, but it's simply a drop in the ocean when it comes to the number of people who are freely accessing black-market cigarettes in this country.

Indeed, I understand that authorities have recognised the problem themselves and that the Australian Border Force have said, 'We can't seize our way out of this problem.' Indeed, I've seen some estimates that, provided more than 15 per cent of the product being illegally imported into the country makes it through our Customs and Border Force checks, these organised crime gangs are profitable. So when you consider the risk-reward context, as my local police have put to me, running a black-market tobacco operation, where you might get a shutdown notice issued for 30 days and a small civil penalty applied to a person convicted of an offence—these are organisations that are making billions of dollars a year—versus the risks they take when they participate in the illicit drug trade, where people who are caught end up in jail for 10, 20 or more years, it's no wonder that even the criminals are turning their minds to the black market of cigarettes and going, 'This is where we're going to be playing.' It's just basic human behaviour.

When you understand that behaviour, I think we need to be applying that to the way we legislate here. There have been almost 300 firebombings and arson attacks linked to tobacco turf wars alongside robberies, extortion, kidnapping and murder. This isn't something that we're talking about as the plot for a Hollywood thriller. This is playing out in communities across Australia. If we're honest about why, we ought to see the government taking action to slash the excise on tobacco.

In my part of the world, we're also looking at the rise of bootlegging—black market alcohol—and it is far more prevalent than you might think. Indeed, the ATO themselves estimate some $800 million of forgone excise on alcohol.. I won't focus on this, because we are debating tobacco here tonight, but the same point stands in that punitive taxation is creating an opportunity for organised crime to exploit ordinary Australians who are just after a little vice to make life that little bit better in their own way. I don't think that we should be making criminals out of those Australians. We should be focused on normalising excise tax at the same time as tightening up some of this enforcement.

Legal tobacco sales are collapsing. They're hurting the retailers. They're hurting the small business people, who we should be backing in this country, and the consumers themselves are effectively ordinary Aussies we're making criminals out of. I think this bill falls a long way short of where we could be in this very needed and very timely debate in this country. On that, I thank the House.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Immigration) | Link to this | 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.

Andrew Wallace (Fisher, Liberal National Party) | Link to this | Hansard source

The coalition will support the passage of the Combatting Illicit Tobacco Bill 2026. We support measures that strengthen law enforcement powers, disrupt organised criminal activity and make it harder for criminals to profit from illicit tobacco. However, while this bill contains some worthwhile measures, we shouldn't pretend that it represents a comprehensive solution to the crisis that Australia now faces.

This bill is ultimately a response to a problem that has exploded under Labor's watch. It's a crisis that has been a number of years in the making and a crisis that extends far beyond just tobacco. This is about organised crime, community safety, lost government revenue and whether Australians can have confidence that the rule of law, which underpins our society, is being upheld. Australia is now facing a full-blown illicit tobacco crisis. The government's own illicit tobacco and e-cigarette commissioner estimates that the illicit tobacco market is worth somewhere between 4.1 and $6.9 billion annually. That figure alone should alarm every member of this House. This is not some small black market operating on the fringes of society. This is a sophisticated, highly profitable criminal enterprise generating billions of dollars every year.

Those profits are not flowing into the legitimate economy. They're not funding public services. They're not supporting Australian jobs. They're flowing directly into the hands of organised criminal syndicates, who are doing significant damage to our community, to our social fabric, by, as an example, firebombing legitimate businesses. The coalition's amendment correctly notes that illicit tobacco has become a multibillion-dollar black market increasingly linked to organised crime, violent criminal networks and serious community harm. We've seen the reports of firebombings. We've seen reports of extortion. We've seen criminal groups fighting over territory and profits. This is no longer simply a public health issue, as important as that is. It has become a significant law and order issue. It has become a significant domestic national security issue. Australians are rightly concerned.

The unfortunate reality is that this crisis did not emerge overnight, nor did it emerge by accident. The Albanese government's approach to tobacco excise has played a significant role in creating the conditions that have allowed this black market to flourish. The coalition's amendment notes that repeated increases in tobacco excise significantly widened the gap between legal and illegal tobacco products, driving consumers towards the black market and dramatically increasing the profitability of organised criminal supply.

Now, let me be clear: nobody on this side of the House is arguing that tobacco use should be encouraged—at least I don't think any of my colleagues are. Perhaps we might have some smokers on our side. But governments must recognise that, when legal products become dramatically more expensive, criminal markets step in to fill the gap. There is the age-old saying that 'nature abhors a vacuum'. That is precisely what has happened. Organised crime recognised the opportunity. The profits became enormous and criminal syndicates moved quickly to exploit that opportunity. While Labor was increasing the excise and celebrating projected revenue gains, criminal organisations were building a thriving black market right under our noses.

One aspect of this issue that receives far too little attention is the enormous loss of government revenue. Every illegal cigarette sold represents excise revenue that is never collected. Every shipment of illicit tobacco imported into Australia represents money that should have gone into the Commonwealth's coffers. While Labor originally forecast billions in additional revenue from its excise increases, the Parliamentary Budget Office has estimated that those policies will reduce budget revenue by more than $20 billion between 2024-25 and 2028-29. That is a staggering figure. That is money that could have been spent on hospitals, roads, defence, aged care, disability services and infrastructure. Instead, it is disappearing down the black hole of the black market.

Australians are being taxed more, while criminal syndicates avoid paying any tax at all. That is not fair to hardworking mum-and-dad Australian taxpayers or to small and big businesses alike. It is certainly not sustainable. At its core, illicit tobacco is one of the largest tax evasion schemes operating in Australia today. That is why I believe we need to think differently about this problem. For too long, governments have viewed illicit tobacco primarily through a health lens, but it must also be viewed through a taxation and organised crime lens. The Commonwealth has extensive powers to pursue Australians who fail to meet their tax obligations. We all know that. The Australian Tax Office has sophisticated capabilities. It has investigative, compliance and enforcement powers. Yet somehow criminal enterprises operating multimillion-dollar illicit tobacco networks continue to flourish.

Australians are entitled to ask how this could possibly be. How is it that there are hardworking, everyday Australians out there working hard to put food on the table and to pay their rent or their mortgage who are also paying their taxes, yet these criminal syndicates seem to be getting away with blue murder? If we can dedicate resources to investigating relatively small tax discrepancies that everyday mums and dads often get picked up on, surely we can dedicate greater resources to pursuing criminal syndicates that are evading millions of dollars in customs duties and excise revenue. The tax office can't keep going after the low-hanging fruit.

The money trail is often the most effective way to dismantle organised crime. We all know the stories of Al Capone and his exploits. He was never charged or convicted in the US of all of the many crimes and alleged murders that he had committed or organised to be committed. At the end of the day, they got him for tax fraud. That's something that we should be doing here. If we can't get these people for the firebombings, extortions and assaults, let's go after them from a tax perspective. Most people would be more scared of a tax inspector than they would be of a member of the police force. People who are involved in these illicit schemes should be worried about the tax office coming and knocking on their door. Who cares about how we get them off the streets or how they end up going to prison, as long as we get them off the streets and as long as they go to prison. If they go to prison for tax fraud, so be it. We need to follow the money, freeze the assets, seize the profits and take away the financial incentive, because, if organised criminals continue to make enormous profits, they will continue to find new ways to operate.

To be fair to the government, there are elements of this bill that the coalition welcomes. The bill seeks to strengthen the risk-to-reward calculation for criminal actors by increasing penalties and improving the ability of authorities to pursue criminal profits. The bill also strengthens proceeds-of-crime arrangements and expands investigative powers available to law enforcement agencies. Importantly, the legislation expands access to telecommunications interception powers for serious illicit tobacco offences. These are sensible reforms. They will provide additional tools for investigators, they'll assist police and enforcement agencies, and they should help make it harder for criminal organisations to operate.

For these reasons, the coalition will support the bill. Supporting the bill, however, does not mean ignoring its shortcomings. The reality is that much of this legislation focuses on increasing penalties on paper. The government talks big about stronger penalties, it talks big about longer prison terms, it talks big about larger fines, but penalties only matter if criminals believe that they will actually be caught. The central challenge is not simply the size of the penalty; the central challenge is enforcement. Courts already have significant penalties available to them, yet criminal organisations continue to operate because they do not fear being caught. That is why stronger enforcement must sit alongside stronger penalties. Without meaningful disruption, criminal organisations will simply adapt, and they will continue to operate.

Perhaps the greatest weakness of this bill is that it does not form part of a broader national strategy. The coalition calls on the government to finally develop and implement a comprehensive national strategy to combat illicit tobacco and organised criminal activity. That is exactly what is required. We need stronger border enforcement, we need greater intelligence sharing, we need stronger cooperation between Commonwealth agencies and state police, we need greater financial investigation capability, we need more aggressive use of proceeds-of-crime laws, and we need stronger coordination with states and territories. Many Australians have seen illegal tobacco stores shut down only to reopen days later. Many Australians have seen criminal operators appear to continue trading with little consequence. That cannot continue. There must be real consequences for those who repeatedly break the law, there must be meaningful disruption of criminal supply chains, and there must be a coordinated national response. This debate is ultimately about more than tobacco. It's about protecting communities. It's about ensuring criminal syndicates cannot operate with impunity, and it's about ensuring Australians actually feel safe in their neighbourhoods.

The growth of the illicit tobacco market has brought with it organised crime, intimidation, violence and criminal activity. The longer governments allow those networks to become entrenched, the harder they become to dismantle. That is why this issue deserves serious attention. That is why the coalition continue to push for stronger action. The coalition will support the Combating Illicit Tobacco Bill 2026. We support stronger law enforcement powers, we support stronger proceeds-of-crime measures, and we support sensible efforts to disrupt organised criminal activity. But Australians should be under no illusion. This legislation alone will not solve the problem. The illicit tobacco market is now worth billions of dollars. It's costing taxpayers billions in lost revenue. It is enriching organised crime, and it is creating real community safety concerns across Australia.

This crisis did not happen overnight. It developed over years of poor policy decisions, weak enforcement and government inaction. The Albanese government has lost control of illicit tobacco. This bill is an acknowledgement of that reality. The coalition will support any measure that helps restore order, but we will continue to argue for a broader, stronger and more comprehensive response, because this is no longer about tobacco; it's about organised crime, tax evasion and community safety, and it is about protecting the interests of Australian taxpayers.

Steve Georganas (Adelaide, Australian Labor Party) | Link to this | Hansard source

The bill before the House, the Combatting Illicit Tobacco Bill 2026, is a necessary and decisive response to a growing threat to Australia's public health, community safety and economic integrity. We're talking about the illicit tobacco trade. Speaking from experience, having been a nicotine addict on and off for many, many years in my life—I'm pretty clean at the moment and haven't touched a cigarette for well over four years—

Mike Freelander (Macarthur, Australian Labor Party) | Link to this | Hansard source

And you look extremely healthy, I've got to say.

Steve Georganas (Adelaide, Australian Labor Party) | Link to this | Hansard source

I know about addiction to this horrendous drug that has addicted billions of people around this earth and caused health devastation everywhere you go in every corner in this world. It is one of the most addictive drugs that humankind has seen. It is the hardest drug to get off—harder than heroin, amphetamines and most other drugs. This is what the illicit tobacco trade knows and understands really well, and it is why they're targeting this area. They know that the addiction is so great that, no matter the cost, people will try to find a way to get their tobacco.

This bill strengthens law enforcement powers and significantly increases the penalties for illicit tobacco offences, ensuring that the legal framework will finally reflect the seriousness of the harm being done. Let's be clear, this is not a minor issue. It's not an isolated compliance matter; it's a multibillion-dollar criminal enterprise, and governments, regardless of their persuasion—whether they're from the coalition side or the Labor side or the callithumpian side—should be doing everything possible to wipe it out or to keep it at bay as much as possible. Recent reporting has estimated the value of the illicit tobacco market to be between $4.1 billion and $6.9 billion. That is billions of dollars flowing into illegal networks, strengthening organised crime, undermining lawful businesses and putting Australians at risk.

The bill has two clear and essential objectives. The first is to rebalance the risk-to-reward equation for those engaging in illegal activities, ensuring that penalties truly reflect the scale of the harm caused and that crime in this space is no longer seen as a low-risk, high-reward opportunity. The second is to strengthen Australia's proceeds of crime regime so that those profiting from illicit tobacco can no longer hide behind complex financial structures and their unlawful gains can be properly targeted and removed.

As I said, illicit tobacco is not just about lost revenue. It directly undermines the progress that's been made over decades in reducing smoking rates here in Australia. We have been leaders in the world when it comes to tobacco reduction, whether it be through the banning of advertising on TV, the sporting ban at our cricket and football matches or the plain packaging tobacco laws that we brought in. I chaired the health committee at the time, and I remember very well that, when we conducted the inquiry, we had a conga line of tobacco companies come in with their lawyers, their consultants and their million-dollar CEOs to give evidence. They were all trying to tell us that what we were doing was illegal or wasn't quite right.

What we saw as a direct result of the plain packaging of tobacco, in the years in front of it, was that the amount of people taking up smoking—in other words, teenagers—was dropping at a remarkable rate because the fancy advertising and packaging wasn't working. We've done some great things in this country when it comes to reducing the numbers, and we don't want to see it now going upwards. That's really important to keep in mind.

What's taking place now is exposing Australians to unregulated and potentially dangerous products. Tobacco is dangerous as it is, even legal tobacco. It creates health problems. It causes cancer, asthma—a whole range of things. Unregulated, it is even more dangerous. It fuels organised crime, embedding criminal activity deeper into our communities. The reality is really clear. The illicit tobacco trade has continued to grow rapidly and profitably. That tells us that the current system is not working and that it's not strong enough. When you come to that realisation, then there's no doubt that we need stronger laws. Without stronger laws, without tougher penalties and without effective enforcement powers, the risk remains low for those breaking the law, and that is simply not acceptable.

This issue is not theoretical; it's already playing out in real time in communities all over Australia. In fact, in my electorate and my community of Adelaide in 2025, a local shop in Torrensville became caught in what can only be described as the escalating violence in the illicit tobacco trade. In the middle of the day, in full view of the public, a brazen arson attack took place. It was a weekend, on a Saturday, when all the shops were operating all around it. It was so intense that two men were seen emerging from the building engulfed in flames. They obviously tried to firebomb the place, but it backfired on them. It exposes Australians to much danger. Three people in this incident were seriously injured and rushed to the Royal Adelaide Hospital suffering from severe burns. The damage to the businesses was devastating, with early estimates exceeding $500,000, and it was the wrong business. They had targeted the wrong place. It's putting Australians into danger every single day.

The cost goes far beyond dollars. It is the fear, the trauma and the disruption that's inflicted on local businesses and their workers and the entire community. Pressure is being put onto businesses to sell their illegal products. We know so. We've read about it in our papers. We've seen it on our news stories. We've seen it on Four Corners. These people are thugs that basically don't care about the safety of anyone. They don't care about new addicts in the tobacco game. They will put the pressure on particular shop owners to sell their illegal product through fear and trauma and the disruption that's inflicted on them and their local businesses.

Tragically, the incident that I just explained is not the only or an isolated incident in my electorate. Just days earlier from that incident, another shop located only a few hundred metres away had its doors smashed and fire deliberately lit inside. That business was left completely gutted. It was reduced to little more than charred walls, blackened floors and the remains of what had once been a thriving local enterprise. These are businesses that have nothing to do with illicit tobacco, yet they are being dragged into a cycle of violence driven by criminal networks operating in this space. Either pressure is being put to them to sell their illegal product, they're saying no and they get attacked or they're selling someone else's illegal product and therefore another crime group will attack them.

We've seen so many similar incidents, not just in my electorate but all over the country, continuously. In 2024, an office—again, in my electorate—was targeted by a Molotov cocktail attack, reducing it to ash. It is believed that the real target was the tobacco business next door. They missed the target and burnt down an innocent, law-abiding citizen's business. It's believed that the real target, obviously, was the tobacco business next door to this particular office block. This is the reality: indiscriminate violence spilling into surrounding businesses and communities, putting innocent people's lives at risk.

These so-called tobacco wars are not just about illegal cigarettes. They're about organised crime asserting control, using intimidation and violence, to protect a highly profitable illegal market. Authorities now estimate that there are 200 tobacco stores just in Adelaide alone. It's believed that 50 to 60 per cent of all tobacco products sold are now illicit, and this may get worse before it gets better. That's the scale of this problem. So you cannot just sit here and say, 'We're not going to do anything about it.' That's why this government is acting. It's no longer hidden. It's no longer isolated. It's happening in plain sight in our suburbs, on our streets and in our local communities.

When criminal activity reaches this level, when it begins to threaten lives, legitimate businesses and public safety, it becomes clear that stronger action is not just necessary; it is urgent. This is not a challenge that can be solved by one level of government or one state government alone. It is something whereby, if we're serious about this, we need to be equally serious about working together across the Commonwealth, states and territories with unified coordination.

It would be a real shame if this bill was not supported by every member of parliament, because, as I said, it's not about ideology. It's not about politics. It is about shutting down illegal businesses, shutting down organised crime and ensuring that the number of people addicted to tobacco does not go up. That is our No. 1 priority here. That's why this government is focused and clear. These so-called tobacco wars are not just about illegal cigarettes; they're about human people and human lives. I commend the bill to the House.

Andrew Willcox (Dawson, Liberal National Party, Shadow Assistant Minister for Manufacturing and Sovereign Capability) | Link to this | Hansard source

The real debate today isn't happening inside the comfort of this chamber. It's happening to the sound of midnight sirens, the shattering of storefront glass and the pungent smell of smoke in our suburbs. Follow that smoke and it leads directly to the police tape stretching across local shopping centres, to the charred ruins of family businesses and into the lives of everyday Australians, who no longer feel safe walking down suburban streets. I rise in this chamber today not to debate a piece of public health regulation but to confront a national security crisis.

This multibillion-dollar criminal empire didn't just emerge from an unforeseen global shock. It was built, brick by brick, under the watchful eye of the Albanese government because of a failed tax policy that has created the most lucrative black market this country has ever seen. Labor thought they were taxing a habit. Instead, they subsidised a syndicate. Criminal syndicates don't deal in statistics; they deal in terror.

Let's look at the real victims of this policy. A 27-year-old woman, Kate Tangey from Melbourne, is dead. Her family is shattered. Their lives are completely destroyed. Why did this happen? Because a criminal tobacco gang firebombed the house she was in, targeting the wrong place in the dead of night. She paid the ultimate price for the gang warfare that has continued to run rampant. The syndicates might be targeting their rivals, but everyday Australians are the ones being dragged into the inferno. Look at the Gold Coast, where a late-night attack gutted a neighbouring laundromat and suburban cafe. And look right here in Canberra, where fires have forced families out of their beds as nearby apartment blocks have had to be evacuated. The underworld is fighting for market share, but the public is carrying the terrifying risk.

If anyone in this chamber thinks this black-market warfare is a crisis confined to the big cities, they are wrong. You only have to look at the suburb of Andergrove in Mackay in my electorate of Dawson. Just after midnight on 28 February, the Andergrove Village shopping complex became a war zone. For the fourth time in two months, a local tobacco shop was targeted by arsonists. But the fire didn't stop there. It ripped through the walls and completely gutted Bauer Mackay, a brilliant family-run electrical business next door, destroying over $160,000 worth of their equipment. The hardworking owners, the electrical business—they did absolutely nothing wrong. They didn't deal in tobacco. They didn't deal in contraband. But their livelihood was reduced to ashes anyway because the out-of-touch government has allowed the legal criminal empire to run rampant on our doorstep.

The assailants, caught on CCTV, were two adults in balaclavas wielding flaming Molotov cocktails—a targeted and deliberate attack. This is not a regulatory issue; this is gang warfare playing out next to our schools, next to our cafes and inside our communities. Unbelievably, there have now been more than 285 firebombings across this country linked directly to this illicit trade. The syndicates might be aiming at their rivals, but the collateral damage falls entirely on the innocent. It falls on the family run bakery next door, it falls on the first responders rushing into a burning building at midnight, and it falls on local residents forced to flee their beds.

The coalition will support the passage of this bill because any weapon, no matter how blunt, is better than leaving our police empty-handed. But let's be completely honest. This bill is too little, too late. It is a desperate attempt by a government that has lost control of our borders and lost control of our streets. The profits from this black market are funding bikie gangs, international syndicates and cartels. The government's own figures admit that the illicit market is worth up to $6.9 billion annually. That's nearly $7 billion in cold, hard, untaxed cash flowing straight to the worst elements of society, and that's how they get so rich. Labor serves the business model on a plate.

When the Albanese Labor government handed down its 2023-24 budget, they rammed through massive compounding increases to tobacco excise. They did so ignoring the warnings from law enforcement and retailers. They genuinely believed that, if you keep raising the price of a legal packet of cigarettes, demand will magically vanish. But they forgot the actual first rule of market economics: if you tax a legal product into orbit, you do not stop people smoking; you simply hand the entire market over to organised crime. When a legal packet of cigarettes costs over $40 and a criminal syndicate can sell an illegal imported packet under the counter for $15, you create an absolute gold rush for thugs. You make illicit tobacco more profitable than trafficking cocaine with a fraction of the legal risk.

Labor did not fix smoking; they accidentally became the chief marketing managers for the black market cartels. And what has been the result for the budget? The Parliamentary Budget Office has revealed that these failed tax settings have blown a massive $20 billion hole in the Commonwealth revenue base. At the exact moment local families are staring at electricity bills stuck to their fridges, wondering how they're going to buy groceries, billions of dollars in tax revenue are being diverted from our healthcare, our education and our roads straight into the pockets of underground syndicates. It is a spectacular double failure, a law-and-order catastrophe and a fiscal disaster all rolled into one.

This is not just a coalition critique. The anger and frustration has reached boiling point inside the Labor Party itself. Labor state governments are completely frustrated by the incompetence in Canberra. The New South Wales health minister, Ryan Park, has publicly and repeatedly slammed the Albanese Labor government's failure to act. He has rightly pointed out that the state authorities are being left to play an endless, futile game of whack-a-mole, trying to shut down illicit shops while the federal government's high excise continues to pour high-octane fuel on the fire. New South Wales Labor premier Chris Minns has shown the type of leadership that the Prime Minister lacks. He has called for a total rethink of the excise strategy, acknowledging that current settings are completely unsustainable and actively counterproductive. When their own state colleagues are publicly begging this government to fix a mess, it is definite proof that they have completely lost control of the nation.

The government tells us that this bill will solve everything by increasing maximum penalties, expanding investigative powers and targeting criminal profits, but, when we actually read the text, this bill is all show and no substance. The legislation is obsessed with increased maximum penalties on a piece of paper rather than providing the resources to improve actual enforcement on the street. Anyone who understands the courts knows that doubling a maximum penalty means absolutely nothing if the judiciary system isn't imposing the current limits and if financial penalties are rarely enforced against underground networks. Cartels do not look at a sentencing schedule before they plan a firebombing. They look at the likelihood of getting caught. And, under this administration, that likelihood is remarkably low.

The Australian Border Force made an incredibly blunt submission to the Senate inquiry on this very issue. They noted that we cannot simply seize our way out of this problem. They explained that their frontline officers are running themselves ragged trying to mop up a flood while the Labor government keeps the taps turned on full blast. This bill ignores the tsunami entirely and just gives the Australian Border Force a slightly larger mop.

What is missing from this bill tells us everything you need to know. This legislation does absolutely nothing to address the core structural drivers of the crisis. There is no reconfiguration of the disastrous excise settings. The government refuses to even look at the pricing signals they are sending to the economy. They are so wedded to their policy pride that they would rather see suburban shops boarded up with police tape than admit their tax experiment has backfired. There is no significant new investment for our frontline enforcement agencies, no major funding boost for the Australian Border Force at our container terminals, no new support for domestic compliance operations to help local police raid illicit warehouses and zero explanation of how government intends to solve the practical street-level hurdles facing our communities. We have all seen the ridiculous spectacle of an illegal tobacco shop being shut down by state health officials, only to reopen 48 hours later under a different name with a new frontman. This bill provides no mechanisms to break that cycle.

Even the government itself admits the legislation is a lightweight response. In the explanatory memorandum, they concede that the financial impact of the bill is small. They are introducing a signature bill to solve a multibillion dollar national crisis, and their own official documentation admits they cannot quantify a single dollar of criminal disruption. That tells you everything you need to know about the substance of this plan.

However, the coalition will support the bill, because we believe some tools are better than none, but this government must implement a far more comprehensive strategy to restore the rule of law. A serious response to the crisis must move beyond paper penalties and focus on actual disruption, confiscation and closure. This government should coordinate with the states to introduce immediate nationwide store closures and lease termination provisions. If a business is caught selling illicit tobacco, authorities must have the power to padlock the doors, cut the utilities and cancel the commercial lease immediately. This government must make it physically and financially impossible for these illicit shopfronts to operate.

This government must also shift its focus from penalties to the complete confiscation of revenue streams. Our law enforcement needs tobacco-specific asset forfeiture laws that allow police to seize the cash, the luxury vehicles and the properties of anyone involved in this trade, hitting the syndicates where it hurts the most—their wallets.

Thirdly, the government must finally swallow its pride and look at the pricing signals driving this crisis. There needs to be an honest, independent review into how tobacco excise settings are impacting the black market, guided by law enforcement and economic reality rather than bureaucratic stubbornness.

Lastly, this government must actively support our frontline state and territory enforcement officers. We cannot expect local police forces to bear the brunt of a federal border failure without direct financial and logistical assistance from Canberra. This debate is no longer just about tobacco regulation; it's about community safety, economic sanity and the rule of law.

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

I understand that the member for Pearce would like to present a copy of her speech for incorporation into the Hansard, in accordance with the resolution agreed to on 6 November 2025.

Tracey Roberts (Pearce, Australian Labor Party) | Link to this | Hansard source

The incorporated speech read as follows—

I would like to speak in support of the Combatting Illicit Tobacco Bill 2026 and the stronger measures this government is taking to crack down on the growing illicit tobacco trade across Australia. This issue matters deeply to communities across Pearce. People are increasingly concerned about the growth of illegal tobacco and vaping products being sold openly in suburban shopping strips, near schools and in local commercial centres. They are concerned not only about the health impacts but also about the organised criminal activity that sits behind this trade. Across our communities, people can see that this problem has escalated dramatically. Illegal tobacco shops are no longer hidden away. They are operating in plain sight. Communities are rightly asking how criminal networks have become so brazen and so embedded in everyday neighbourhoods. This is no longer simply a matter of unpaid tax or regulatory noncompliance. It is now a serious organised crime issue, and it requires a serious and coordinated national response.

The evidence before us is alarming. Official estimates suggest that between 50 and 60 per cent of all tobacco products sold in Australia are now illicit. Organised criminal groups are estimated to be earning billions of dollars from this trade every year. That money does not simply disappear. It is reinvested into other forms of criminal activity, including money laundering, trafficking, scams, and other organised illegal operations that threaten community safety. The illicit vape market is equally concerning. The overwhelming majority of vaping products sold in Australia are estimated to be illegal. These products are often unregulated, frequently targeted at younger Australians, and sold through networks designed entirely to avoid scrutiny and accountability.

People in Pearce understand that when organised crime becomes profitable, communities suffer. Local families want safe neighbourhoods. Parents want confidence that products being sold near schools and shopping centres are lawful and regulated. Small business owners who do the right thing are frustrated watching illegal operators undercut legitimate businesses while facing few apparent consequences. Communities are also concerned about the broader impacts this trade is having on social cohesion and public confidence. When illegal shopfronts appear to operate openly and repeatedly without consequence, people lose faith that the rules are being enforced fairly. That is why this legislation is so important. This bill sends a clear message that Australia will not allow organised criminal networks to profit from illicit tobacco and illegal vaping products at the expense of public health and community safety. The purpose of this legislation is straightforward: to increase the consequences for criminal actors involved in the illicit tobacco market and to strengthen the powers available to law enforcement agencies investigating these offences.

The reforms recognise that the illicit tobacco trade has changed significantly in recent years. Criminal syndicates are now highly organised, technologically sophisticated and operating across jurisdictions. These networks function like multinational businesses. They exploit weaknesses in regulation, move money rapidly across borders and take advantage of what they perceive to be a high-profit, low-risk criminal enterprise. This bill seeks to change that equation. It increases penalties for offences relating to the importation, manufacture, possession, sale and supply of illicit tobacco products. These stronger penalties are designed to act as a deterrent and reflect the seriousness of the harm these activities cause to the Australian community.

Importantly, the bill also strengthens investigatory powers available to law enforcement agencies. As criminal activity evolves, law enforcement must have the tools necessary to keep pace. This legislation expands access to powers that support the investigation and disruption of organised criminal networks involved in illicit tobacco. That includes strengthening telecommunications interception capabilities and enabling more effective surveillance and investigative techniques for serious tobacco related offences. These powers matter because organised crime does not operate through isolated individuals. These are coordinated criminal enterprises using encrypted communications, financial networks and sophisticated supply chains. Effective investigations require modern tools that allow authorities to identify the organisers, financiers and facilitators behind the trade—not just the individuals working at the retail level.

The bill also strengthens Australia's proceeds-of-crime framework, and this is a particularly important part of the reforms. One of the clearest messages communities in Pearce send is that organised criminals should not be allowed to keep the profits they make from harming Australian communities. People are rightly frustrated when criminal enterprises continue operating because the financial rewards outweigh the risks. That is why targeting criminal profits is essential. This legislation strengthens the ability of authorities to seize unexplained wealth, confiscate criminal assets and disrupt the financial structures that sustain illicit tobacco operations. While prosecutions are important, we know that organised crime is ultimately driven by profit. Taking away the proceeds of crime—whether that be cash, luxury vehicles, property or other assets—is one of the most effective ways to dismantle criminal networks.

The reforms also improve information sharing between agencies and regulators. This reflects the reality that combating illicit tobacco requires a coordinated national effort involving Commonwealth agencies, state and territory governments, financial regulators, law enforcement bodies and border authorities. The work already being undertaken by agencies such as AUSTRAC, the Australian Federal Police and other authorities is making a difference. High-risk financial accounts linked to illicit tobacco activity are being identified and shut down. Suspicious financial transactions are being monitored more closely. Regulatory cooperation is increasing. These reforms build on that work and strengthen the capacity for agencies to act collectively and effectively.

Importantly, this bill also modernises aspects of the Proceeds of Crime Act to ensure law enforcement agencies have powers that reflect contemporary criminal activity and contemporary investigative practices. Criminal organisations today operate across state borders and increasingly use complex structures to conceal ownership, assets and financial flows. Law enforcement agencies need nationally consistent powers to respond effectively. These amendments improve consistency in the way orders and investigative powers can be applied across Australia and reduce unnecessary barriers that can slow investigations. That may sound technical, but it has very real impacts. Every delay, every procedural inconsistency and every gap between jurisdictions can be exploited by organised crime groups. Streamlining and modernising these powers strengthens the national response and improves the effectiveness of investigations.

But, beyond the criminal dimension of this issue, we must also acknowledge the significant public health consequences associated with illicit tobacco. Smoking continues to cause immense harm across Australia. Communities across Pearce know the impact that smoking related illness can have on families and individuals. Many families have seen loved ones suffer from cancers, respiratory diseases and chronic health conditions associated with long-term tobacco use. That is why allowing a large-scale illicit tobacco market to flourish presents such a serious risk. Cheap and accessible illegal tobacco products undermine decades of public health work. They make harmful products easier to obtain and can increase uptake, particularly among younger Australians and vulnerable groups.

The rise in illegal vaping products is especially concerning. Parents in Pearce regularly raise concerns about the accessibility of vaping products to young people. They are worried about how easily these products can be obtained and the long-term health consequences associated with nicotine addiction. Communities want stronger enforcement and stronger safeguards to protect young Australians from becoming the next generation targeted by nicotine dependency. This bill forms part of that broader effort. It recognises that illicit tobacco is not a victimless crime. The impacts are felt in our health system, in community safety, in legitimate businesses and in the wellbeing of families. The costs are ultimately borne by all Australians.

The illicit tobacco market also creates broader economic harm. Legitimate retailers who comply with the law face unfair competition from illegal operators selling unregulated products without paying appropriate duties or complying with health requirements. Local businesses should not be placed at a disadvantage because criminal operators choose to ignore the law. Communities expect fairness. They expect that businesses doing the right thing are protected and that criminal enterprises are held accountable. The people of Pearce also expect governments to respond decisively when organised crime becomes more visible in suburban communities. People do not want to see illegal tobacco stores normalised in local shopping precincts. They do not want criminal activity becoming embedded in everyday community life. They want action that restores confidence that laws are being enforced properly and consistently. This legislation is an important part of that response. It strengthens penalties. It strengthens enforcement powers. It strengthens proceeds-of-crime laws. And it strengthens cooperation between agencies working to disrupt organised criminal networks.

Importantly, it also recognises that this challenge cannot be addressed by one level of government acting alone. The Commonwealth, states and territories must continue working together to close illegal operations, strengthen enforcement and reduce the profitability of illicit tobacco markets. That collaboration is essential because organised crime does not recognise state borders, and effective enforcement cannot operate in silos. Communities expect coordination, cooperation and practical outcomes. This bill helps deliver that. It represents a serious response to a serious and growing problem. And, while legislation alone will not solve every aspect of illicit tobacco activity overnight, these reforms provide law enforcement agencies with stronger tools to disrupt criminal operations and hold offenders accountable. Every seizure matters. Every prosecution matters. Every illegal shopfront shut down matters. Every dollar taken from organised crime matters. Each action increases pressure on the illicit market and helps reduce the profitability of criminal activity.

Ultimately, this legislation is about protecting Australian communities. It is about protecting public health. It is about supporting legitimate businesses. And it is about ensuring organised crime groups do not continue profiting at the expense of community safety and wellbeing. The people of Pearce expect strong action against organised crime and stronger protections for local communities. This bill delivers important reforms to support that goal. I commend the bill to the House.

Allegra Spender (Wentworth, Independent) | Link to this | Hansard source

Australia once led the world on tobacco control. Plain packaging, graphic warnings, non-smoking areas, information campaigns and excise yielded substantial government revenues and, more importantly, created a generation of Australians that never took up smoking. Smoking rates went from one in three to one in 10 in little more than a generation. We were right to be proud of this record. We were wrong to be complacent.

Smoking rates are now higher than they were 10 years ago. Australians are consuming 40 per cent more nicotine than in 2017, far outpacing the 14 per cent population growth. This is despite prices tripling since 2016 due to annual excise price increases. Taxes now make up $30 of the price of a 20-pack, and this has risen rapidly against a backdrop of strained household budgets. But Australians are not smoking less. Instead, they have simply found a cheaper, unregulated, criminal alternative. Illicit tobacco now makes up an estimated 80 per cent of tobacco consumed in Australia, up from 12 per cent in 2017, according to recent data from the ABS. That's four out of every five smokers breaking the law, and almost all vapers are too.

The illicit market is systematically undermining 25 years of progress, creating a triple blow to public health, government revenue and community safety, and there are enormous consequences. The first is public health. Smoking is the leading cause of preventable death and disease in Australia. It costs us 66 lives every single day. The loved ones lost and childhood exposure to second-hand smoke drove early efforts to deter smoking. Smoking kills. Illegal tobacco is worse still. The Royal Australian College of General Practitioners has warned that illegal tobacco often contains higher than expected nicotine concentrations and unregulated ingredients, like heavy metals, pesticides and moulds. These products disproportionately reach lower socioeconomic communities, regional and rural Australians and First Nations people, widening health inequalities.

The second is government revenue. The tobacco excise peaked at $16.3 billion a year in 2019-20. This year, just $4.1 billion is expected, and it's expected to decline over the forwards, not because Australians are smoking less but because of the illegal tobacco industry growing. We're collecting 25 per cent of the excise we did five years ago, and yet we have more people smoking than ever. It is painfully clear that the tobacco tax is not working. The decline in government revenues is a direct fiscal consequence of a market that has been ceded to organised crime.

The third is community safety. Organised crime has not just entered this market; it has taken over. The growth of the illicit market has been accompanied by more than 200 gangland firebombings of tobacco shops since 2013, violence and intimidation against small business owners and skyrocketing insurance premiums for businesses that simply have the misfortune to be located next to a tobacconist. In what other sector are illegal businesses able to operate in plain sight on every main street in very suburb in every city—and in my electorate? What is concerning me even further is that illicit alcohol is starting to follow the same trajectory. The ATO puts the market at over $700 million a year. In a recent investigation, 30 per cent of licensed bottle shops were found to be selling suspected illicit product, bringing with it the risk of methanol poisoning.

So let's turn to this bill. The Combatting Illicit Tobacco Bill 2026 does take a useful step in response to this crisis and enacts recommendations from the ITAC Commissioner's 2024-25 report. It creates new criminal offences for large-scale illicit tobacco activity linked to organised crime. It increases penalties across importing, possessing, buying, selling, producing and manufacturing. It expands unexplained-wealth provisions and proceeds-of-crime tools. And it enables enhanced law enforcement powers, including wiretaps for serious tobacco offences, with imprisonment terms of up to 15 years for the most serious conduct.

I support this bill. Increasing penalties will create a greater deterrence, and the expanded unexplained-wealth powers are particularly important. They go after the money, not just the product. Criminal networks that absorb seizure losses as a cost of doing business are far more vulnerable to asset confiscation. But I have to be honest about what this bill alone cannot do. Illicit tobacco has reached a crisis point. Failure to act on an emerging and growing issue—by both sides of parliament, but particularly by the government, who's been responsible for the last four years—has increased the complexity and cost of addressing it.

The central question in this debate is whether enforcement alone can solve a problem of this scale. I do not believe it can, and I believe that the government must act further. Authorities seized triple the quantity of illegal cigarettes last financial year compared with four years ago. It's a record result. In January, 52 tobacco stores were shut down in New South Wales following raids targeting illicit tobacco. Yet the market keeps growing. Across states and territories, law enforcement personnel are stretched, and resourcing is uneven. Victoria has just 14 enforcement officers, compared with more than 200 in Queensland. The Australian Border Force's submission to the Senate inquiry highlighted that the scale, profitability and adaptability of supply chains limited the efficacy of enforcement alone.

It is clear that Australia has passed the revenue-maximising point of the Laffer curve, not because fewer people are smoking but because the price differential between illegal and legal products has become so large that criminal substitution has overwhelmed any deterrence effect. This bill seeks to rebalance the risk-to-reward calculation by addressing risk. Reward is the other side of the equation. Undeniably, the excise settings have created enormous profit margins for illegal operators to exploit. It should be reviewed, but cutting the excise alone is unlikely to reverse this trend. A comprehensive approach is needed. Illegal-cigarette purchasing has been normalised by consumers over years, and tobacconists have strongly established retail networks. They cannot simply be priced out. The think tank e61 concludes that the entrenchment of the illicit market necessitates a combination of stricter enforcement, meaningful financial levers and a coalition of policy actors willing to confront the full picture.

I note that this bill arrives while the inquiry of the Senate's Legal and Constitutional Affairs References Committee is still underway, with its report due on 30 June. I welcome that process, but it does raise the question of why we are debating this bill now, before that inquiry has reported, rather than using its findings to shape a more complete legislative response.

So passing this bill is necessary, but it is far from sufficient. The government must consider all options, starting with demand. The goal is fewer smokers. The second best is that smokers buy legal tobacco. Neither is achievable when an illegal packet costs less than half the legal price. Enforcement alone cannot close a gap that wide, and significant excise reduction calibrated to substitution behaviour needs to be on the table.

Secondly, the bar must be lifted on retail licensing. Australian Council on Smoking and Health, ACOSH, chief executive Laura Hunter put it plainly: 'It is far too easy to become a tobacco retailer in Australia.' She noted that obtaining a tobacco licence involves none of the property checks, police checks or community consultations that are routine in a liquor licence. There are 40,000 tobacco retailers in this country, serving eight per cent of the population—a number that makes compliance monitoring operationally impossible. There are 10 times more tobacconists than the four major supermarkets combined. A genuine national licensing scheme with meaningful barriers to entry, regular compliance checks and real consequences for illegal selling is a prerequisite for enforcement to work. Several states have moved on this, but there is no nationally consistent floor, and it is the job of the government to work across the states for a national approach.

Third is proper resourcing of border enforcement. The ABF's Operation PRINTWALL has delivered record seizure results—over a kilotonne of illicit tobacco deterred since December 2025, with 87 tonnes seized in a single week in April. These are significant achievements, but the ABF has been explicit that it cannot seize its way out of this problem. The government has committed $188.5 million to border enforcement and an additional $156 million for the current financial year. That resourcing must be sufficient and targeted to disrupting the import chains, not just the retail end. Seizures are symptoms. The supply chain is the disease.

Finally, there is resourcing of state enforcement agencies. The current disparity between states is a weakness when criminal networks move supply across jurisdictions and the moment one state tightens its laws. The ITEC Commissioner has documented exactly this dynamic. Organised crime doesn't stand still; it relocates wherever the barriers are lowest. A national approach with consistent standards is the only way to stop that arbitrage

In conclusion, Australia was once a global leader in tobacco control. That record is worth defending, but defending it means being honest when a policy has gone completely wrong. The illicit tobacco crisis is not just a story of inadequate penalties, though penalties matter. It's not simply a story about insufficient border enforcement, though that matters too. It is a story about a market that has been structurally handed to organised crime by a combination of extreme pricing and inadequate supply-side management, which now operates so openly on so many street corners that its normalisation is one of the greatest strengths. This is about organised crime happening in broad daylight. The government must do better in this space.

Jess Teesdale (Bass, Australian Labor Party) | Link to this | Hansard source

Today I rise in strong support of the Combatting Illicit Tobacco Bill 2026. This bill is about public health, community safety and the rule of law, but it's also something very practical. It's reversing the equation for criminals. Right now, organised crime sees illicit tobacco as high profit and low risk. This bill is about making it higher risk, lower profit and harder to operate at every stage of the supply chain. The scale of this market should shock every member of the House, and the official numbers are moving fast. The ITEC Commissioner's 2024-25 report put illicit tobacco at 50 to 60 per cent of the tobacco market, but the more recent ABS estimates suggest that the problem has grown significantly higher in that short a time. Organised crime groups are estimated to have made between $4.1 billion and $6.9 billion in profit from this trade, and it's not petty noncompliance. That is industrial-scale criminal activity.

In 2024-25, the Australian Border Force seized 2.66 billion illicit cigarettes. Operation PRINTWALL has already detected more than a kilotonne of illicit tobacco across the broader continuum, including more than 87 tonnes seized in one week alone. That tells us two things. First, enforcement is working. Second, the size of the market we are up against is enormous. In Bass, people can see it. Across Launceston, in the CBD and surrounding suburbs, illegal tobacco and vape shops appear, disappear, rebrand and reappear again. Products that everyone knows are illegal are being sold in plain sight. They're operating in shopping strips next to legitimate businesses and in the heart of our communities. Recent reporting in the Examiner made clear the scale of the problem in northern Tasmania, with targeted operations led by Tasmania's Department of Health seizing nearly $119,000 worth of illicit tobacco products across the north. It's not a few packets under the counter; it's a substantial illegal market operating within our very community, and locals are right to ask why this has been allowed to continue.

We need to be very clear about what illegal tobacco is and what it is not. It is not harmless, it is not low level and it is not victimless. It is organised crime in a shopfront, and the profits do not sit neatly inside the tobacco trade. They're reinvested into serious criminal activity, drug trafficking, money laundering, intimidation, violence and exploitation. When an illegal tobacco shops in a local community like mine, we should not see it as a quirky retail or issue a minor regulatory breach. We need to see it for what it is: a business model that relies on addiction, undermines public health, undercuts legitimate business and helps fund organised crime.

I especially want to focus on the health harm, particularly with our local Assistant Minister For Health here. It's very important. It cannot be and is not being treated as just a revenue problem from our government. Tobacco remains one of the leading causes of preventable death and disease in Australia. Smoking causes cancer, chronic lung disease, cardiovascular disease and stroke. For us, it means more ambulance callouts, more GP appointments, more emergency presentations, more hospital beds, more surgery, more chemo, more palliative care and more families sitting beside someone they love facing news that could and should have been prevented. The Australian government estimates smoking kills more than 24,000 Australians each year. That's one person every 22 minutes. Around 20 per cent of Australia's cancer disease burden is actually due to smoking. Those are the costs that we don't put on the packet. It's carried by patients; it's carried by families; it's carried by nurses, doctors and paramedics; and it's carried by the taxpayer through our health system.

In Tasmania, this is a crucial point. In 2022—older stats—12.4 per cent of Tasmanian adults were current daily smokers, compared to just 10.9 per cent nationally. We know that those numbers have increased in that time. It's a major cause of cardiovascular disease, including heart disease and stroke. For us, that's not abstract. That's an ambulance called out in Scottsdale, it's a hospital bed in Launceston, and it's a family in George Town dealing with the consequence of preventable illness. Every time illegal tobacco becomes cheaper, easier to access or more visible, it makes quitting harder, it makes relapse easier, and it makes it easier for young people to start. It threatens decades of public-health work that has saved lives.

Australia has been a world leader in tobacco control. Plain packaging, advertising restrictions, health warnings, public education and excise have all helped to reduce smoking rates over time, and those policies worked because they made tobacco less attractive, less accessible and less normalised. This illegal market does the opposite. It makes it cheaper, easier to find, dodges health warnings, bypasses regulation and removes age checks. It puts unregulated nicotine products in the hands of people who never should have been sold them in the first place.

This is especially dangerous for young people. A cheap cigarette or a black-market vape are products sold without proper checks. These can become the entry point to years of addiction, and I've seen that up close in my work as a teacher. I've seen a 14-year-old selling illegal cigarettes sourced from a local shop, not because she understood the criminal market behind it but because she was trying to make friends and earn some money on the side. I've seen students leave school grounds at lunchtime to vape in a car together, and, by the end of lunch, one of them was vomiting, dizzy and suffering from severe headaches. That is what this market does. It reaches young people before they can understand the risk. It turns addiction into something cheap, accessible and social, and it leaves families, schools and health services dealing with the consequences. When we talk about illegal tobacco, we're not just talking about today's crime, we're talking about tomorrow's cancer diagnosis, tomorrow's stroke, tomorrow's lung disease, tomorrow's pressure on Medicare and hospitals, and tomorrow's grief for families.

There is also a basic fairness issue here. In Bass, I speak to small-business owners who do the right thing. They follow the law, they pay their taxes, and they comply with regulations. They absorb the cost of doing business properly and legally. Sometimes, next door or down the road, they see another shop selling illegal tobacco with fewer costs, fewer checks and, for too long, too few consequences. This is not a level playing field. It punishes honest businesses and rewards people prepared to ignore the law. It's damaged confidence in enforcement, in regulation and in the basic promise that, if you do the right thing, our system will back you.

This bill is about restoring that confidence. This bill strengthens the legal framework in key areas and increases penalties for offences involving the importation, possession, buying, selling, supply, production and manufacture of illicit tobacco. For some offences, those penalties will reach up to 15 years imprisonment. If criminals are treating this trade as low risk and high profit, then the law must change that calculation. It expands proceeds-of-crime tools because, if we're serious about organised crime, we have to follow the money, we have to strip the profits and we have to make sure that criminals cannot build wealth from products that harm our communities.

The bill also gives enforcement and intelligence agencies stronger tools to investigate and disrupt serious tobacco offences, because it's not a simple retail offending. You've got international supply chains, distribution networks, financial flows, criminal enablers and connections across jurisdictions. It means we cannot fix this problem at the border alone. We have to act pre border, stopping shipments and disrupting criminal supply before they reach Australia, we have to act at the border, where Border Force is already seizing record volumes, and we have to act post border in the warehouses, distribution networks and illegal shopfronts where the products are sold. The whole-of-supply-chain response is the only credible response. Shutting illegal shops is one of the fastest ways to choke the profits because, if criminals cannot sell the product, they cannot make the money and, if they cannot make the money, the business model starts to break.

We also need to answer the argument that tobacco excise caused this problem and simply cutting it would solve it. The tobacco excise is not just a revenue measure; it's a public health measure. It exists because smoking imposes enormous costs on people who smoke, on their families and on the public health system. Yes, criminals are exploiting the price gap, but there's no serious argument that we should surrender Australia's health policy to organised crime. Cutting prices would not make transnational crime syndicates pack up and go home. It would make smoking cheaper, make tobacco companies richer and risk condemning more Australians to smoking related disease and early death. The answer is not surrender. The answer is enforcement, disruption, prevention and support to quit. And that is what this government is doing. We're investing in the Australian Border Force, we're strengthening laws, we're improving national coordination and we're targeting money laundering. We're supporting people to quit smoking and vaping. Through this bill, we're making the illicit tobacco trade more dangerous and less profitable for the criminals behind it. No country will eliminate illicit tobacco entirely, but we can shrink it, we can disrupt it and we can make it harder to import, harder to distribute, harder to sell and much harder to profit from. We can send a very clear message: our communities are not open for this kind of business.

For Bass, this is not theoretical. It's on our streets. It's in our suburbs. It's affecting our small businesses. It's threatening public health. It's helping organised crime profit from addiction. This bill stands up to that. It protects public health, it backs legitimate businesses and it strengthens enforcement. It upholds the rule of law, and it says that Australia will not surrender decades of tobacco control success to criminal syndicates. I commend this bill to the House.

Leon Rebello (McPherson, Liberal National Party) | Link to this | Hansard source

The sale of illicit tobacco is fast becoming one of Australia's most lucrative organised crimes. It's no longer a problem that's confined to back alleys in big cities. It's turning up in suburbs and shopping strips across the country, including in my electorate of McPherson on the Gold Coast. This is the predictable consequence of a tax policy that may look good on a spreadsheet but ignores what's happening on the street. Out of roughly $50 for a legal packet of cigarettes, close to $30 goes straight to the tax office. Official surveys say the number of people who report smoking has dropped sharply in the past year. That should be great news, but wastewater testing shows that Australians are consuming more nicotine now than eight years ago. Smokers have not quit. Many have simply shifted their purchasing into the black market.

At between $10 and $20 a packet, illegal cigarettes are an irresistible offer for anyone who's addicted and under financial pressure. Nicotine dependence is powerful. If the only affordable option is the illegal one, the criminal syndicates are going to win every single time. The tax office misses out, honest retailers miss out and the public health objective is totally undermined. While Canberra keeps hiking excise on the promise that higher prices will deter smoking, under Labor, excise has been ratcheted up again without any serious plan to deal with the second-order effects—the surge in illegal traders, the growth in organised crime and the spread of illegal vapes. The health minister has even admitted in the past that the government is not going to use the police to enforce its own vaping laws. What sort of a message has that sent to crime gangs? It has sent the wrong signal and the worst possible message.

Meanwhile, on the other hand, you've seen a government in Labor that supported our amendment as the coalition to create the Illicit Tobacco and E-Cigarette Commissioner. But it took them more than a year to permanently appoint somebody to the role. And it's taken months after the budget last year for funds to flow to Labor's new national disruption group. While ministers talk, the black market is thriving, and more than 130 legitimate small businesses, often family run, have already been attacked around the country with millions of dollars in damage done.

Debate interrupted.