Michael McCormack (Riverina, National Party) | Link to this | Hansard source

Too little, too late. But, with so many of the policies brought forward by this Albanese Labor government, it is all too often too little, too late. The Combating Illicit Tobacco Bill 2026 is another sad example of that, and I feel sorry for those authorities whose job it is these days to clamp down on the illicit tobacco trade. I'm in regular contact with one of the highway patrol officers in the Riverina electorate in relation to this matter. He texted me just last week and said this: 'We searched a vehicle last week linked to one of the illicit Cootamundra tobacco shops and seized $5,000 cash but also their detailed ledgers. The shop does between $4,000 and $11,000 of trade a day in Cootamundra! The organised crime groups are laughing all the way to the bank.' Sadly, unfortunately, they are.

In one sense, I feel for some of the shop owners because they are being heavied by very nefarious people, bikie gang thugs, to sell illicit tobacco. If they don't, then they are at risk. Their families are at risk. We've seen all too often in Melbourne Molotov cocktails being thrown not just into the tobacco shops and the vape shops but indeed the shops on either side, so much so that insurance companies are refusing to insure stores right next door to tobacco shops—tobacco shops which to all intents and purposes are legal entities. I don't smoke—never have, never will. My late father, Lance, did. It probably put him in an early grave, it's sad to say—very sad to say. I miss him every day. I feel for those people who have an addiction, because there's no worse addiction than tobacco. People who smoke just crave it, and it's very hard to kick the habit. It's also very expensive.

Four out of five cigarettes being smoked in Australia today are illegal cigarettes, and the amount of excise being lost by Labor, which has done nothing, you could argue—they will argue—until now is costing the economy. It's costing money that could be otherwise used on public health campaigns in public hospitals on just about anything that might be and would be good for society. On the public NSW Police website, on Friday 19 June, the headline was:

Traffic and Highway Patrol seize more than $4.5m in tobacco, vapes in three separate vehicle stops.

This just goes on and on, particularly along the Hume Freeway between Melbourne and Sydney. It is a corridor of commerce. It's also a corridor of illegal activity when it comes to drivers whose vans and vehicles are full of illegal vapes and illegal tobacco. We had that bizarre case that went through the courts. People were pulled up, but the case was thrown out because the court found that those who were appearing had been racially profiled. Well, I would argue that these two men who were in a truck full of illegal cigarettes and who were pulled up by the police were not, in fact, racially profiled at all. They were breaking the law. They were both 38-year-olds, and just because they weren't of Caucasian appearance the district court judge threw the case out.

Just listen to this. They were stopped in Gundagai. Officers found 2,135,200 Double Happiness cigarettes weighing 1,379 kilograms with an excise worth $2,539,822.54. That's a lot of money and a lot of cigarettes. It's a lot of illegality—but not according to New South Wales District Court Judge Jennifer English. She found the decision to search the pair's associates involved racial profiling before ordering 'no further proceedings'. Go figure!

What do you think the New South Wales police think when they read a judgement like that. They're doing their job. They're pulling up crims. They're charging them. They're bringing them before the courts, and we get some woke judge who throws it out. The cops must shake their heads. It's just bizarre. I was on the public website of the police the other day, and the reading is horrendous. These vehicle stops are seizing more and more cigarettes and vapes.

The member for Cowper—I've got a lot of time for him—brought before the parliament and to the notice of the public a better way to deal with this issue. I respect him greatly, not just because he's somebody who often thinks outside the square but because he's also a former officer of the law, a former New South Wales policeman. This legislation before us now does not have the same teeth. They are needed. As I said at the outset of this contribution, it is too little, too late. The government is playing catch-up. What this bill contains isn't, quite frankly, doing the job.

Right across our suburbs and cities and towns and regional communities in particular we've got bikie gangs. This is their method of making money. This is their way of conducting their nefarious activities. Woe betide if they come knocking on your legal tobacco store and if you are a legal shop owner attempting and trying at every step of the way to do the right thing by yourself, by your family, by your customers, by your community. Cigarette selling is still a legal activity, but, in a cost-of-living crisis, bikie gangs are strongarming, in many cases, these shop owners, and the shop owners are going out backwards if they don't comply.

The other thing is that so many of the people who are buying this illegal product are in the lowest socioeconomic section of the community. They are doing it tough, and this government is not doing anything, or very little, to help them make ends meet. When you've got a situation where you can pay $50 a pack for cigarettes or $20 a pack for cigarettes and when you've got a cost-of-living crisis, when you can't put food on the table and when you're struggling to pay your power bills, it's very tempting to justify not spending $30 more on a packet of cigarettes and do it under the counter—chop chop—than it is to do the right thing and pay the excise. I understand why the shop owners and, indeed, their customers are, unfortunately, faced with this situation. There's no condoning anybody breaking the law. But I'll tell you what—when some of these bikie gangs, laden with baseball bats and the like, come a knocking, you do feel for those shop owners who are just trying to do the right thing in a legal environment and in a legal way and method and who are being heavied by these thugs, these nefarious characters.

This bill is a partial, belated and wholly inadequate approach to a crisis that has exploded on Labor's watch. I feel for our hardworking patrol officers, such as my friend in the highway patrol, because they should be catching people who are speeding and breaking the road rules. They should be monitoring road safety, not babysitting this government, which has to be doing more at the border. I realise that you can't go through every 20-foot container. I understand that, but the government needs to have a far better response to this growing crisis. If this growing crisis remains in place, there will not be a legal cigarette sold in this country in the years to come. There will not. And this is on Labor's watch.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

David Littleproud (Maranoa, National Party, Shadow Minister for Agriculture) | Link to this | Hansard source

I rise to support the intent of the Combatting Illicit Tobacco Bill 2026, but, unfortunately, this bill doesn't have the courage to face up to the facts. The fact is that our society has changed and is continuing to change, particularly with respect to its market habits. Governments of all persuasions for many years have failed to have the courage to address the real elephant in the room, which is excise. This is entrenching market behaviour that is tearing away at a regulatory model that has protected Australians and has ensured that we have the revenue to be able to pay for the health problems that eminently come from tobacco use and from vapes.

The challenge that we now have is that only about 20 per cent of the market—in fact, it's probably gone under 20 per cent of the market—uses a regulated product. They are using the black-market product because it's cheaper. We have priced this commodity out of the reach of many Australians. The perverse outcome of that is that we are seeing organised crime benefit from this and we are seeing the sheer reduction in excise revenue that goes into the Commonwealth and then, through funding of our health system through our states, to the ability to futureproof Australia's health challenges from the use of tobacco and vapes.

While this is commendable in terms of taking on organised crime with increased penalties, you also need to be able to police it. Consider what we did at the last election, particularly around vapes. This government moved to have vapes sold only through pharmacies, which is pure madness because you can't charge excise once it becomes a prescribed product through the health side of the equation. It means that we miss out even on the excise of vapes that are prescribed through a pharmacist who did not even want this anyway. There are not too many pharmacists that believe in vapes or believe in nicotine full stop. It's one of the products they don't necessarily want to have to sell, but this government thrust it upon them without any consultation whatsoever. Yet there is still no excise even out of the vapes that are being sold through our pharmacists. The excise piece is one that we have missed.

The reality is that even if you had gone down the path of a regulated model, like cigarettes—a sensible, regulated model through the convenience stores and supermarkets, where only those under 18 could continue to get vapes as well as cigarettes—and you had a regulatory model around the product that was being sold—one of the challenges we are seeing not just with chop-chop but with the vapes is that there is no regulatory control about what the content is. That adds to the health issues that we're going to have to pay for as a Commonwealth into the future. The challenge is that we have opened up this front without the common sense and understanding of the marketplace and understanding of what has happened. If we had also regulated vapes the way that we do cigarettes, through licensed retailers, we would have collected an extra $3 billion to $4 billion worth of excise. Of that, we'd prescribe $500 million to law enforcement to be able to go and attack organised crime.

While you can lift penalties and you can get a warm, fuzzy feeling in here saying, 'We're going to beat our chest and we're going to bring down this organised crime,' it costs money. Unless you're allocating funds to that, I can tell you that our good friends in the state jurisdictions are not as excited about spending their money on chasing down illicit tobacco. Their problems in tackling many of the social issues that our police forces around the state are facing up to, such as domestic violence, street crime and youth crime, are far greater. The reality is that they do not have the resources, and they will not have the resources unless someone is prepared to pay.

What we have missed in all this is that not only are we losing our revenue stream for the future health problems that we are going to experience but we are missing the opportunity to fund our law enforcement agents properly. That's why we should be looking at vapes and illicit tobacco in totality. Those products, as many medical professionals say, try to exchange the tobacco, get you off it and onto vapes, and then get you off those altogether. But if you don't include them in the regulatory framework and align how that is achieved from the point of sale through to excise, then you have a marketplace that is out of whack and you have educated a marketplace to fall apart because you have priced one commodity, a regulated commodity, to be out of the reach of many Australians.

In fact, only around 14 per cent of the people who use vapes today actually have a prescription, so prohibition hasn't worked. I was part of the Morrison government that went down this model of prohibition on vapes. We were wrong: prohibition does not work. But what does work, and what has worked, and we've seen it in the reduction in youth use of tobacco, is—I think, it was actually Nicola Roxon, who, as the health minister, brought this in—sensible reforms around points of sale and advertising. That has seen a reduction of around 70 to 80 per cent in youth usage of tobacco.

Having a regulated model through a point of sale of registered retailers meant that, much like alcohol, you had to be above 18 to get it. There were checks at that point of sale. That had a serious and lasting impact, and I congratulate that health minister for those initiatives. But what we missed and did wrong was to deviate from that model. We thought that we could simply make doctors prescribe vapes. No-one's going to pay to go and see a doctor to get a vape when they can go down the main street and pick one up anyway. The common sense was not there. We missed that, and we're to blame for that.

There is an opportunity to fix it, but you've got to understand that the market dynamics have changed. We've got to be courageous enough not to sit here and beat our chests and say, 'Yes, we've lifted the penalties.' We've actually got to look at how we take back this marketplace, because we have created a behaviour in the marketplace now that will make it very, very difficult for the regulated product to come back and for consumers to go back to the regulated product, and that is a challenge.

While many of you may want to stand and attack big tobacco, just understand you are hitting a trigger point where big tobacco will leave. If their stranglehold on the market is reduced and they lose their percentage of market in Australia to organised crime, they will pack up and leave. If we are not careful and we do not tackle excise, we will not have a regulated product at all in Australia. The challenge that we will see is that big tobacco will pack up and go to another international market because Australia is lost.

This is the challenge that I don't think we as legislators can see coming. If you take away that regulated product and you take away the regulated point of sale, all that happens is that you get perverse health outcomes. This is where the bill has missed the mark. The intent is commendable, but the practical reality of the lived experience that we've seen for the last five or six years should be screaming at us that we have to make radical change. There needs to be radical movement towards addressing illicit tobacco and illicit vapes and towards making sure we put in a framework that ensures a regulated product and a regulated point of sale, which is what has served us well and is the model that we should return to.

An ideological model might seem great within these four walls, but out there in the real world it's not happening at all. That's why you're seeing the perverse outcomes of organised crime taking over streets and small businesses and knocking them down. They see the opportunity—the opportunity that's been vacated by governments that have not had the courage to face up to the practical reality of this problem, where it is taking our nation and where it's taking our finances and our health system into the future. And so, while this may sound good as a bill on the surface, I fear that in another three or four years we'll be back again. If we see that the regulated tobacco market reduces even further, well below 20 per cent to five or 10 per cent, you won't have a regulated tobacco market in this country, and that is a perverse outcome. As funny as that may sound, it will be a perverse outcome, because we won't have those regulated products that protect Australians. And you can look at that and work that through with vapes. This addiction that governments of all persuasions have had for many years on excise is now being lost because we have now skewed the market to make significant perverse impacts on health crime.

I say to this government that, while we support this, it's a very superficial bill. It doesn't have the backing, the grunt, the intent or the intellectual rigour to shift the dial, as I think we all come to this place with the right intent to do. It ignores the reality of the real world. It is great that you are trying, but have more courage to understand that the market has changed and we need to change with it. We need to take more radical steps in aligning tobacco and vape excise, reducing that and understanding the elasticity of the market—that, if you reduce that and try to bring that illicit market back into the regulated market, it does have elasticity that will benefit and bring people back to a regulated product, giving us the opportunity to regulate that product, to earn the excise and to invest that excise into our health systems into the future and also in law enforcement. That would be the commonsense, real solution. This is window dressing at best, and I think we as legislators will fail unless we're prepared to be honest with ourselves and be honest with the Australian people that this is a problem that's got away from us. It's going to take the collective wisdom and courage of this building to understand that tinkering at the edges, making ourselves feel good, beating our chests for five minutes in saying we're coming down on organised crime, means we're going to be back here in three or four years debating the same thing.

All I say to those opposite is: I'm prepared to admit that I was part of a government that got something wrong. I'm asking you not to repeat the mistakes of the past, to understand that this market has got away from us and that it will take collective courage. Unless we have that, I fear Australians will hurt from that not financially but in their health. We won't have the financial resources to support that and help them when they need it.

Thank you for the opportunity to speak on this bill. While I'll support the bill, I ask the government to please understand that the challenges that we are facing are far more significant than what this bill tries to address. Unless we have the courage to look that in the eye, face up to it and legislate for it, we'll be back here again, unfortunately, with even more perverse outcomes.

Ali France (Dickson, Australian Labor Party) | Link to this | Hansard source

I rise in support of this important bill and in support of our efforts to crack down on the illicit tobacco and e-cigarette market. I do so having spoken to many parents in my electorate of Dickson on the harm that the illegal tobacco and e-cigarette trade is doing to our young people. Not that long ago, I honestly thought that smoking was on the nose—too expensive, banned in pubs and clubs—and our laws that enforced plain packaging, restricted advertising and smoking in public places, as well as significant tax increases on cigarettes, resulted in big changes to the take-up rate of smoking. We will have one of the lowest adult smoking rates in the world, but recent data by Roy Morgan in 2025 suggests that uptake of vaping might be increasing. Roy Morgan found that the 18- to 24-year-old age group reported the highest use, at 20.6 per cent in 2025, which is about four times the rate in 2019, which was 5.3 per cent.

I never imagined that my kids would even be tempted, but there I was cleaning up my eldest son's bedroom, when I found a vape when he was 16. When I asked about it, the response was, 'Everyone is doing it, Mum.' Who knows where he bought it, but I soon learnt that many of the tobacco and vape shops that seem to be popping up in every suburban shopping strip are a cover for serious criminal syndicates and are making billions.

In March and April this year, Australian Border Force intercepted record levels of illegal tobacco, seizing over one kilotonne since December. Record seizures have occurred over the last financial year, with a 320 per cent increase in the number of cigarettes seized compared to four years ago. Organised crime syndicates made somewhere between $4 billion and $7 billion in the year 2024-25 and then reinvested that money into trafficking, scams and money laundering. Cheap smokes and vapes are everywhere. Almost every vape purchased in Australia was illegal in 2024-25—95.7 per cent of vapes.

But this isn't just an Australia challenge. This is a global challenge, and it's something we must address because it hurts our communities. We've known for decades that smoking can kill us and costs our health system well over $150 billion a year. Two out of three long-term smokers will die of a tobacco related disease, and 20 per cent of the cancer disease in Australia is due to smoking. It hurts legitimate retailers. It is a multibillion dollar black-market operation that is flooding our communities with illegal products. These syndicates are also linked to violence, firearms, intimidation and firebombings, and they risk unwinding decades of success in reducing smoking rates in Australia. We saw a series of arson attacks between two rival syndicates on shops in Victoria a few years back, burning down tobacco shops and allegedly recruiting teenagers to do so. This is a public health issue, but it's also a community safety issue, and the profits are used for other criminal activities.

This bill makes it harder for organised crime to profit from illicit tobacco and vapes. It creates new offences for large-scale illicit tobacco activity linked to organised crime. It increases penalties across importing, possessing, buying, selling, producing and manufacturing. It expands unexplained wealth and proceeds of crime tools, and it enables enhanced law enforcement powers, including wiretaps, for serious tobacco offences. The goal is to harden the environment and make it really difficult for these crime syndicates to operate, and this will take time. It will take collaboration, coordinating action and sharing of intelligence between federal and state agencies.

I acknowledge the efforts of some states, including my own state of Queensland, who have toughened laws to provide for long-term closure orders, investment in enforcement on the ground and penalties for landlords who knowingly lease to a criminal operator. Commonwealth funding to the states and territories is now flowing, with $84 million over two years for training to improve licensing and compliance systems and enable joint operations, putting pressure across the whole supply chain—production, air and maritime routes, freight channels, warehousing, distribution and retail fronts.

I've seen some commentary suggesting that we should surrender and that we should remove excise tax, make it cheaper and boost health education. That approach ignores the fact that the single most effective lever to encourage people to quit or reduce smoking is price. That's why we've had decades of success in driving down adult smoking rates. It also ignores evidence that demonstrates the illicit tobacco market is driven by a complex mix of issues beyond price. Giving in might appear easier. Reducing excise taxes might reduce the illegal trade, but it would also dramatically increase the take-up of smoking across the country and increase smoking related health costs and deaths as a result.

This bill builds on the substantial work the Albanese Labor government has already undertaken to disrupt and dismantle illicit tobacco networks. Since 2023-24, the government has invested $345 million to bolster the Australian Border Force's ability to detect and seize illicit tobacco and vaping products. We also established Australia's first illicit tobacco and e-cigarettes commissioner, ensuring a coordinated national response. In the 2025-26 budget, we provided a further $21.3 million to strengthen that role and support whole-of-government coordination.

These new laws directly respond to key recommendations of the illicit tobacco and e-cigarette commissioner report, which made clear that strong consequences are essential if we are to disrupt and deter this serious criminal activity. We're also strengthening existing investigatory powers, expanding the circumstances in which those powers may be applied, including through computer access and surveillance capabilities available under the Surveillance Devices Act. The bill also amends the Telecommunications Act by including a number of illicit tobacco related offences within the definition of a serious offence. This change will strengthen the ability of law enforcement and intelligence agencies to identify, disrupt and prosecute those involved in illicit tobacco networks. These amendments provide greater consistency and clarity across existing warrant and access frameworks, ensuring that the law keeps pace with the realities of organised criminal activity.

Last year we also cracked down on high-risk financial services, including crypto ATMs used to launder profits and conceal transactions. AUSTRAC now also has more powers to act and has put banks on notice that they must do more to scrutinise retailers linked to illicit tobacco, tightening the net. We are seeing results, with lots of accounts reviewed and removed, private ATMs removed and increased reporting of suspicious transactions. Cutting off the money supply and flow starves these criminal outlets.

This bill seeks to achieve two primary objectives. First, it rebalances the risk-to-reward calculation for criminal actors by significantly increasing penalties for illicit tobacco offences. For too long, the penalties simply have not matched the scale or seriousness of the harm. Second, the bill strengthens and modernises the proceeds-of-crime regime to ensure that the Commonwealth can effectively target and recover the profits made through illicit tobacco.

Our national strategy rests on three key focus areas: (1) disrupting and dismantling border threats, stopping illicit tobacco and vapes before they reach our shores; (2) enhancing detection, disruption and destruction at the border and within communities—this includes coordinated operations, targeted compliance activity and increased on-the-ground enforcement; and (3) strengthening national coordination across all jurisdictions, because no single agency or level of government can fight this alone.

These measures are already producing real results. As of April this year, Border Force had seized a record-breaking amount of illicit tobacco over just four months, including over four million vapes and nearly 786 million cigarettes. These are extraordinary numbers. They reflect the scale of the challenge, but they also reflect the commitment and effort this government has brought to combating it. ABF teams across the country are targeting more shipping containers, inspecting more air cargo consignments, searching more international travellers suspected of carrying illicit tobacco and conducting more domestic warrants than ever before.

I know that people in my community of Dickson are concerned about the proliferation of tobacco stores selling illicit tobacco and vapes. I too am concerned. Please know this government is doing everything it can with the states and territories to shut down the illicit tobacco and e-cigarette trade. This bill will disrupt and dismantle criminal syndicates, with tougher penalties and greater powers to detect and seize illicit tobacco and vaping products. I commend the bill to the House.

Alison Penfold (Lyne, National Party) | Link to this | Hansard source

I rise to speak on the Combatting Illicit Tobacco Bill 2026. This bill matters because the illegal tobacco trade in Australia is no longer a minor black-market problem. It's become a major organised crime industry and it's funding criminal syndicates, it's fuelling violence and it's hurting legitimate small businesses. It's costing Australian taxpayers billions of dollars in lost revenue. Instead of flowing into the government's coffers, revenue generated through the illicit tobacco trade flows straight into criminal networks. That means less money for hospitals, roads, aged care, regional services and national security. Australians have seen the headlines—firebombings, extortion, violence linked to tobacconists and police raids uncovering warehouses packed with illegal cigarettes and vapes. This is organised crime operating openly in our communities. That is why a bill that confronts the issue of the illicit tobacco crisis is so important.

Whilst I will be supporting this bill, I must say that it is disappointing that, given the opportunity to fix the illicit tobacco crisis I just noted—something like 80 per cent of tobacco and cigarettes being consumed in this country are illegal; that's an enormous figure—Labor, in typical form, have fallen short. The government says this bill will increase penalties, expand investigative powers and target the profits of organised crime. The government says this bill will create new criminal offences for large-scale illicit tobacco activity linked to organised crime. It says it will substantially increase penalties across the entire supply chain—importing, manufacturing, producing, processing, buying and selling illegal tobacco. They say that the bill will strengthen proceeds-of-crime and unexplained wealth laws so law enforcement agencies can go after the profits and assets generated by illegal tobacco operations. They say it will expand law enforcement powers, including telecommunications interception powers—in plain language, wiretap powers—so agencies can better investigate criminal syndicates involved in the trade.

On paper this bill certainly does sound strong, but in reality it is not. Trust Labor's rhetoric to be completely out of step with reality. The bill is heavily focused on increasing maximum penalties and not on actually improving enforcement outcomes, and there lies the problem. Penalties without enforcement are useless, just as enforcement without penalties is meaningless. You cannot have one without the other and expect to make a meaningful dent in the illicit tobacco trade. Furthermore, the imposition of penalties on offenders is determined by the courts and they already do not impose the current maximum penalties. So simply increasing penalties on paper is not going to do anything when the instinct of the courts is leniency.

Critically, this bill does nothing to address the core structural issues that have created the illicit tobacco trade in the first place. Instead, it has actively fuelled this crisis. Labor's 2023-24 budget imposed further increases in tobacco excise on top of already high levels. That decision widened the price gap between legal and illegal tobacco, drove consumers into the black market and made illegal tobacco more profitable than ever for organised crime. Does this bill attempt to change these disastrous excise settings? No, it doesn't. There is no reconsideration or reconfiguration of the very policy settings that drove consumers to the black market in the first place. There is likewise no significant new investment of any kind in the already weak border enforcement, in domestic compliance, in operations or in the active disruption of criminal supply chains. And there is no explanation about what the federal government intends to do about a host of practical on-the-ground problems.

We have all seen illegal shops shut down only to reopen days later and the criminal networks operating with impunity. Without stronger enforcement, better coordination and real consequences this bill will not change the overall trajectory of this national catastrophe. We will still have a situation where criminals are getting richer, violence is escalating, small legitimate retailers are suffering and excise revenue is collapsing. Without stronger action illegal tobacco will continue to fund organised crime; drive fire bombings, ram-raids and extortion; and place small businesses and communities across the country at risk.

In my own electorate, there have been break-ins and arson attacks which present economic and safety issues for neighbouring small and family businesses that are legitimate. Real estate agents in Lyne have spoken to me about being under significant pressure because, due to the state of the local economy and the number of empty stores, they're getting frequent requests from supposed convenience stores that do not have a tobacco licence wishing to set up a shop in their premises.

I have two tobacco stores in the street where my Wauchope office is. One of them is legitimate. I can say that only one is legitimate; it has been there a long time. The other one has what we see in all these shops—all the windows have got branding over them and I have no idea how they can make money from having one fridge with a few drinks, a couple of packets of chips and some chocolate bars. I have seen plenty of people walking outside the store with a lovely white paper bag, only to open it and pull out a packet of cigarettes that are not the Australian branded ones and open it up there on the street. That is what we are seeing. On either side of that shop are legitimate businesses operating in our community, and I fear for them and I fear for their safety.

The Australian Criminal Intelligence Commission has warned that illicit tobacco is now one of the country's fastest-growing criminal markets, and economically the cost of the illicit tobacco trade is significant. The government's own figures show that the illicit tobacco market is worth between $4.1 billion and $6.9 billion annually. That is billions flowing straight into the hands of organised crime cartels and syndicates, whereas it could be flowing into the Commonwealth's revenue base.

You would think that this government, which has created an unprecedented budget deficit, would do everything in its power to re-appropriate these funds, but it is not. So whilst the Treasurer is going after hardworking Australians with record taxes and rebate reductions, making life increasingly difficult and unfair for them, he is also letting the criminals, the illicit tobacco underworld, get off pretty well scot-free. It is also worth noting that even the government itself, in the explanatory memorandum, concedes the financial impact of this bill is small and unquantifiable. That tells you almost everything you need to know.

Even Labor state governments are exasperated. The New South Wales health minister, Ryan Park, has publicly and repeatedly expressed disappointment at the federal government's failure to act. When even its own Labor colleagues are pleading for action and getting none, it is clear that the Albanese government is out of its depth.

I support strong enforcement against organised crime. I support stronger penalties for criminal syndicates. I support targeting the money that fuels these operations. And I support giving law enforcement the tools they need to dismantle criminal networks, because if criminals lose the profits they lose the incentive. I will support the passage of the bill because any improvement is better than none, but it is not at all sufficient. Labor has lost control of illicit tobacco, and this bill does not provide the comprehensive solution that is now required.

Labor had the chance to implement far stronger action. Instead, they have run scared. So I call on the government to go further, to be tough. Incorporate real enforcement action into this legislation. Actively coordinate responses with state and territory governments to support frontline enforcement efforts. Take action to enforce store closure orders, lease terminations for illegal outlets and meaningful disruption of criminal supply chains. Actively confiscate and disrupt revenue streams. And confront the issue of the pricing signals, demand-side drivers and the problems that have flowed from their catastrophic changes to tobacco excise. Australia now has some of the highest tobacco taxes in the world. The intention behind those taxes was to reduce smoking rates, and, of course, reducing smoking is an important public health objective, but governments also have a responsibility to confront unintended consequences.

When the legal price of tobacco becomes extraordinarily high, organised crime sees opportunity. That is exactly what has happened. Illegal products are now being sold for a fraction of the legal retail price, and criminal syndicates have stepped in to exploit that gap. Under Labor, illicit tobacco has proliferated across Australia. Criminal gangs and syndicates have been empowered, and communities are at risk. Now, after years of causing that mess, it is scrambling to look like it is doing something. We're being asked to get behind an inadequate bill and pretend that this will fix it. It is a partial, belated and wholly inadequate response to a crisis that has exploded on Labor's watch.

Australians expect governments to keep communities safe, they expect organised crime to be confronted, not tolerated, and they expect criminal syndicates not to build billion-dollar black markets while taxpayers lose billions in revenue. The Combatting Illicit Tobacco Bill 2026 sends an important message, but it must deliver more than rhetoric. The Australian government cannot allow organised crime to profit on illicit tobacco unchecked. This parliament must stand firmly with law enforcement, with legitimate businesses and with communities affected by organised criminal activity. We must ensure Australia remains a country where the rule of law prevails over criminal enterprise. I commend the bill to the House.

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

I rise to speak on the Combatting Illicit Tobacco Bill 2026. I've met with members of the community—genuine, legal tobacconists. My friend Tim is a good guy, and his wife ran the coffee shop next to my office in my previous life, where I would go in the morning and chat. We'd chat a bit about basketball, a bit about life. He kept bringing the same thing up: 'These illegal shops, Matty. They're doing us in.' These laws have to be stronger. This is a man who'd built his life legally, who had multiple tobacconists, who sold his wares and did his work. Criminals came in to snatch his livelihood. We would all like to see smoking rates reduced. This is a big part of the process, but it is not at the expense of honest, hardworking Australians who are selling legal wares.

This is not just a federal government thing. Local councils have a part to play; state governments have a part to play. In my own region, Leichhardt, right across the road from my house, an illegal tobacconist sprung up. The Cairns Regional Council acted and shut them down. They tried again and were shut down again. That shop is now a florist. I look forward to it opening; I look forward to buying flowers. It was a legal response to an illegal problem. That is what happens when all three levels of government take responsibility to deal with what this is—a criminal organisation, a response that is not appropriate in our cities and our towns, peddling wares that we know to be dangerous to our children. I am pleased to be able to commend this bill to the House. It is another example of what we're doing to stop crime in our community.

This bill expands the law enforcement powers to investigate tobacco related offending and increases the consequences for criminal actors involved in the tobacco market. We have to reset the risk and reward. At the moment, it's been tilted the other way. This bill goes a long way to rectifying that. If criminals are looking at an enterprise, or racket, they need to understand that, if you mess up and we catch you, you are done. We will take it. We will take those opportunities from you, and you will serve time. This is a crucial step because it's not a revenue problem, it's an organised crime problem. It is bringing people who don't belong here, doing terrible things to our communities and terrible things to our small businesses—the people who've been working hard their entire lives—racketeering. It is believed that the illicit tobacco and e-cigarette market is valued between $4.1 billion and $6.9 billion. That's why they've arrived. That's what they think they can get a part of, and we're here to stop them. Organised crime groups are putting around $4 to $7 billion in profits, and they don't use that money to put into their pockets; they use that money to fund other criminal activities for whatever that might be.

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

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, and the member will have leave to continue speaking when the debate is resumed.