I move:

That this House notes the:

(1) $41.9 billion collapse in revenue from tobacco excise in this year's budget, and that downgraded forecasts now reveal the Government expects to collect just $2.1 billion, the lowest tobacco excise collection this century, despite a 282 per cent increase in the excise rate since 2013;

(2) Government's failure to arrest smoking rates;

(3) continued and rapid escalation of violent crime from the illegal tobacco trade, including over 200 firebombings of supermarkets and tobacconists since 2023 under this Government as well as the proceeds funding terrorist activities; and

(4) calls by the New South Wales State, Premier Chris Minns, and former Deputy Australian Chief Medical Officer, Dr Nick Coatsworth, for a complete overhaul of tobacco excise and law enforcement resourcing to combat illegal tobacco.

There's an old saying: 'insanity is doing the same thing over and over again and expecting a different result'. That is exactly what this Albanese Labor government is doing. Same excise policy, same enforcement-only rhetoric, same denial—and every single day Australian lives are being put at risk. Let me start with Sunshine in Melbourne's west. Recently, people were inside a building when a suspected illegal tobacco shop was torched in a suspected arson attack. Five people—not statistics and not a regulatory issue, as this government likes to call it, but five human beings—could've died in their sleep, at work or by simply going about their day because organised crime is now waging a war on our streets, and it's funded by a market that this government's own policy has created, is driving and is sustaining.

Sunshine isn't an isolated case. It's one entry in a ledger that now runs to hundreds of firebombings across this country—Melbourne, Sydney, Perth, Adelaide, Brisbane. This is not a Victorian problem or a 'Melbourne's tobacco wars' headline to be shrugged off like the government tried to do last week. This is a national crisis, and, while Victoria is the capital, Australians in every state now live with the consequences of a Commonwealth government policy failure. Consider who is actually paying the price here. It's retail staff. They're often young, and it's often their first experience in a workplace. For many, they are standing behind a counter as part of their job, but it's with roller doors and CCTV cameras. Many of them, after being held at gunpoint for a 20-pack, are too scared to come to work. For a government that is supposed to be the parliamentary wing of the union movement to stand up for workers, this is a shameful omission. There are retail workers across this country that are bearing mental and physical scars of abusive attacks in their workplaces, and they deserve better. These are kids. They're somebody's daughter; they're somebody's son. They didn't sign up to be at the front line of a criminal economy. This government's policy has put them there, and this prime minister's arrogance and obstinance is keeping them there.

I'd like to talk about Kaz Hamad for a moment, who the AFP has linked to a terrorist act that was carried out on Australian soil and who has built and maintained an illicit tobacco empire that's been funded by the very price gap this government's excise settings have created. Let's just sit with that for a moment. Money that should be going nowhere near organised crime is instead flowing to a network that's connected to terrorism, bikie gangs and firebombings, and successive excise increases—the tax excise is up nearly 300 per cent from 2012—have made the illegal product simply too profitable to ignore. I'd say this. Prohibition didn't stop Al Capone in the 1920s, and it won't stop Kaz Hamad in the 2020s.

The government's own figures now show that the illicit market has surged past half of total tobacco consumption worth billions of dollars every year, and every dollar of that is not going to roads, schools or hospitals as part of general revenue. It's going to fund criminal syndicates. Meanwhile, smoking rates are up. The entire justification for this policy, which was to slow smoking rates and hopefully reduce them, has failed.

For the first time in decades, Western Australia has recorded an increase in their smoking rates. In New South Wales, the most populous state, the New South Wales department of health, no less, has found that smoking rates have tipped over 15 per cent. So it's not working. If you really care about driving down smoking rates in this country, this policy is not working. We've seen the Australian Criminal Intelligence Commission wastewater report showing a four per cent increase over a 12-month period in regional and metro areas. Small-business owners—many of whom, may I say, are migrants who have come to this country seeking a better life, started and built small businesses to help raise their families and worked 16-hour days—are now being ram raided, firebombed and bullied into stocking illegal products. (Time expired)

Is the motion seconded?

I second the motion and reserve my right to speak.

The coalition wants this chamber to believe that the government has surrendered the fight against illegal tobacco. This government has fought and will always fight to stop the illicit tobacco trade, but we will not do so by giving in to big tobacco. The coalition would have us bending the knee to an industry that has spent decades hurting Australians. The coalition wants to cut the tobacco excise by 80 per cent, which would see a guaranteed rise in daily smoking and vape rates and, just as awful, a guaranteed rise in revenue for big tobacco.

Medical experts and academics have warned for decades that smoking is the No. 1 leading cause of preventable death. Professor Simon Chapman, a public health expert at the University of Sydney, said last week that the single most important thing that a person could do for their health is to quit smoking. Smoking kills 66 Australians every single day. Those opposite want to legalise vapes, the gateway to smoking cigarettes. Disposable vapes have surged in this country since COVID, flooding the market in every imaginable flavour, like lollies at the corner store deli, and marketed as sleek and harmless. This government has recognised the danger and acted in 2024 to ban the importation of disposable vapes. The member for Monash accuses the government of failing to arrest smoking rates. Yet the coalition's own policy is to legalise vapes, the very product driving people towards smoking in the first place.

Professor Mike Daube from Curtin University in my electorate of Swan has led the fight against tobacco for four decades. He warns that we are facing an extraordinary tobacco resurgence that risks undoing decades of progress and overloading our hospitals for years to come. Their own colleague the member for Mallee told this parliament that young people who vape are three times more likely to take up smoking. Even those opposite know what this policy does, yet they still want to legalise vapes and other nicotine products.

This motion points to the symptoms of illicit tobacco crime but not the cause. You can't cut a legal price and expect an illegal one to disappear. Illicit tobacco will always be cheaper because it pays no excise at all. Cutting the excise does not shrink the market. Economics 101 says that this will do the opposite. It will grow the whole market, both legal and illegal, by adding more smokers in the first place. That is not a solution. This is gambling with the country's health by still funnelling money into the same criminal trade that this motion claims to be worried about.

The excise is working to protect Australians. According to the 2025 National Drug Strategy Household Survey, daily smoking among adults has fallen to a historic low of almost six per cent, and, for the first time ever, daily vaping has stabilised at nearly four per cent. These reforms are working but there is more work to do before we can say that we have fully protected Australians from the harms of smoking and vaping.

We are not denying what's happening in Victoria and around Australia and that this needs addressing. This is the work of organised criminal syndicates who would deal in drugs, weapons or counterfeit goods just as readily if tobacco stopped being profitable. That is why this government has already committed more than $365 million since 2024 to stop illegal tobacco before it arrives, when it arrives and after it arrives in this country. This year alone, the Australian Border Force has seized more than 230,000 tonnes of illicit tobacco, nearly a 500 per cent increase from the year before. We raised penalties, we gave police new power to pursue these criminals, and we introduced a bill last week to make it easier to prosecute anyone in the supply chain and to take away the cash, cars, houses criminals cannot explain. That is what a real plan against organised crime looks like, because the solution to fighting crime is not about sacrificing public health. Enforcement is how you stop organised crime, not a tax cut.

I rise to speak in support of the motion moved by the member for Monash. Under the Albanese government, Australia's illicit tobacco market has become a serious organised crime problem. Gangs have flourished, making an estimated $4.1 billion to $6.9 billion, using the profits to fund drugs, scams, money laundering and violence. This is not a problem confined to one city or one state; this is being felt right across Australia, including in regional Australia.

Law-abiding small and family businesses are the targets of this criminal activity, whether it is through fire bombings and arson or simply just through a serious loss of revenue off cigarette sales. The economic impact on lawful businesses has been devastating. Lawful retailers are being forced to compete against illicit tobacco sellers offering cigarettes for a fraction of the price of legal products. A legal packet of 20 cigarettes can cost more than $40, with around $31 of that price coming from tobacco excise. Meanwhile, illicit cigarettes can be sold for as little as $10 to $15 a packet. That means legitimate retailers are being asked to compete with operators who don't pay the same taxes, don't comply with the same regulations and don't bear the same costs of doing business. This simply isn't a level playing field. It is legitimate small businesses that are paying the price.

I was told by a local business in Durack recently, who in just six months suffered a $200,000 weekly loss—that's $200,000 weekly loss in sales—this goes beyond just financials. It affects staffing. It affects foot traffic and the long-term viability of their business. This is serious. Lawful retailers have always played by the rules. They've absorbed the excise increases. They've updated their compliance practices and adhered to every legislative change yet they are being left exposed with no support, while illegal traders have monopolised the market. Nationally, the current system is bleeding the budget. In this year's budget, there has been a $41.9 billion collapse in revenue from tobacco excise. Downgraded forecasts now reveal the government expects to collect the lowest tobacco excise this century, despite a 282 per cent increase in the excise rate since 2013.

It is important to note that, beyond the financial impacts, the government has failed to arrest smoking rates. The current policy has failed Australians' health. Tobacco consumption has increased by 30 per cent since the end of 2021. It is clear that we need an overhaul of the tobacco excise and law enforcement resourcing to combat illegal tobacco. These calls come not just from me and the member for Monash but from New South Wales Premier Chris Minns and former deputy Australian chief medical officer Dr Nick Coatsworth. I'm very pleased to inform this House, as well as Premier Minns and Dr Coatsworth, that the Liberal Party does have a plan and has the policies to do just that.

We will attack the gangs where it hurts—their profits. The tobacco excise will be cut by 80 per cent, reducing the excise on a packet of 20 cigarettes from $30 down to $6, stripping away the huge price advantage that is driving smokers into the black market. This is on top of a nationwide $200 million law enforcement surge delivering more raids, arrests and seizures; shutting illegal shops; stopping shipments at the border; and following the money through the AFP, Border Force, ACIC and AUSTRAC. I have long believed—

A division having been called in the House of Representatives—

Sitting suspended from 12:35 to 12:45

I have long believed that the government's decision to implement a pharmacy-only model for nicotine vapes has not worked. This move had only fuelled criminal activity and illegal vapes. That is why I support legislating, regulating and taxing vapes and nicotine pouches for adults only, to replace the failed black market. There is only one way to kill the illicit tobacco market and smash the gangs, and that is by taking away the gangs' price advantage and customers, then hitting the remaining criminals with the full force of the law. The current government has let down our small businesses, the economy and the health system with the current policy settings. We need a better way forward, and it is being provided by the Liberal Party. I absolutely support this motion moved by the very excellent member for Monash, and implore others to do the same.

Australians should be proud of our record in reducing the harmful impacts of smoking over more than two decades in a bipartisan approach which has resulted in a significant reduction in smoking related deaths and a massive decrease in the Australian daily smoking rate. These outcomes have been good for our nation's health; they put less pressure on our hospitals, put less pressure on the budget and have delivered healthy outcomes for Australians. The three conservative parties—the Liberals, the Nationals and One Nation—all want to undo these hard-fought achievements with a harmful policy: a dramatic reduction in the tobacco excise.

I'm old enough to remember a time when the MCG would be clouded in a grey haze of cigarette smoke while VFL games were played, battling for supremacy with giant advertising ads circling the ground. I remember a time when cigarette butts littered our footpaths and clogged up our waterways. I remember when it was acceptable for people to smoke in workplaces. We've come a long way in changing the culture and behaviours around smoking, but the coalition's dangerous proposal to reduce the tobacco excise gives greater acceptance of smoking and greater social licence for a return to the bad old days.

I acknowledge smoking is an addiction. It is a disease, which means that, as a nation, we don't want smoking to be more accessible, particularly for young people. Instead of giving in to the illicit tobacco trade, our government—the Albanese government—is acting. Since 2024 our government has committed more than $365 million to tackling illicit tobacco and nicotine products. We've established the National Disruption Group, led by the Australian Border Force, bringing together Commonwealth, state and territory agencies to target the illicit tobacco trade across the supply chain, and we're seeing results. In 2025-26 the Australian Border Force seized more than 2,300 tonnes of illicit tobacco and 13.2 million vaping devices.

Those seizures are important, because these are products that have not made it into Australian communities, and this is money that has not gone into the hands of criminal syndicates. The AFP-led Criminal Assets Confiscation Taskforce has also confiscated more than $47 million in assets, and state and territory authorities have closed more than 1,000 illicit tobacco stores.

We all know there is more work to do. The Commonwealth has a role, but so do the states and territories. We need effective closure orders and landlord penalties, and we need properly resourced compliance teams, so that when an illegal tobacco shop is identified, governments have the capacity to act. That matters, because enforcement punishes people who are involved in this trade. It means it's harder to operate and harder to sell products illegally.

There is another part of this motion that I want to address. The opposition has pointed to the fall in tobacco excise revenue as evidence that the government's approach has failed, but fewer people smoking means less tobacco being sold legally, and that means less tobacco excise being collected. The purpose of tobacco policy is not to maximise the amount of tax collected from smokers. The purpose is to reduce smoking rates and the enormous health burden that comes with them. That's why I'm so concerned about proposals to make tobacco significantly cheaper.

We need to deal with the illicit market, but cutting tobacco excise does not deal with the criminal networks behind that market. That requires enforcement. It requires government working together to close businesses that are selling illicit tobacco. We also need to keep the focus on young people. Australia has made enormous progress in reducing smoking rates, and we must ensure the next generation does not become addicted to nicotine. That means continuing the public health measures that have brought smoking rates down, tackling illicit products being sold to our communities and strengthening the mechanisms to catch those who are doing the wrong thing.

I don't think anyone is suggesting that the illicit tobacco problem has been solved. There is more work to do. Our federal government will continue that work. We're focused on supporting communities and legitimate businesses and protecting the progress we have made in public health. That's what the Albanese government is doing, and that is why I oppose this motion.

I thank the member for Monash for bringing this very important motion before the House. Tobacco excise raised $8 billion last year and $16 the year before. This year it is expected to be $2 billion. If that collapse meant Australia had quit smoking, I would be the first here to celebrate it. But that is not what the data says. The ABS says tobacco consumption has risen around 30 per cent over the last four years. More children are smoking. In 2017, illegal tobacco had a 10 per cent market share. Last year it hit 80 per cent. Australians have not stopped smoking. Organised crime has swallowed the market. Smoking rates are up. Vaping is up. Billions of dollars have been hand to criminals. Honestly, I do not know how Labor could have made the situation any worse if they'd tried, and now they're trying to defend a clearly broken system.

This is not exclusively a capital city problem. This trade has embedded itself into all corners of this nation. While police and enforcement agencies are doing as much as they can, the black market is continuing to grow. Shut one shop, and another one opens. It has turned into a recurring game of Whack-a-Mole. Every packet of illicit cigarettes is funding criminal gangs and organised crime. The government's own estimate is that these gangs are raking in somewhere between $4 billion to $7 billion a year to organised crime. No police force can arrest its way out of numbers like those.

A legal pack of cigarettes costs around 50 bucks, with more than $30 of that being tobacco excise. An illegal packet sells for around $20 or, some say, even less. That price gap is the entire business model. Until that gap is closed, the gangs will keep coming back, so the coalition will close it. Deputy Speaker Wilkie, if you told me that a policy could (1) cut tax, (2) smash organised crime and (3) improve the budget by $8 billion, I would tell you that you were absolutely dreaming. But dream no more. That is the situation under this current Labor government. It is common sense.

The coalition's plan to kill the illicit tobacco market and smash gangs will do four things. It will (1) cut tobacco excise by 80 per cent, drastically reducing the price advantage enjoyed by the black market; (2) back this with a $200 million law enforcement surge: more raids, more seizures, more arrests and stronger marching orders for Border Force, the AFP and AUSTRAC to go after the supply chains and the money; (3) legalise, regulate and tax vapes and nicotine pouches—plain packaging, Australian rules and stronger protections for children—criminals do not check for an ID when you go and buy a vape; and (4) fund a $60 million national awareness campaign so Australians know the dangers of smoking and exactly where the money from an illegal packet ends up. The Parliamentary Budget Office here in this place has modelled this policy. It is set to improve the budget bottom line by $8 billion over four years and by more than $20 billion over a decade. That is not a choice between cutting a tax and enforcing the law; it is both. The government's response to this plan has been to attack it. Two weeks ago, the Minister for Health and Ageing called our plan 'grossly irresponsible'. Then, just days after, the Saturday Paper reported that the Labor government has asked the Illicit Tobacco Commissioner to model a tobacco excise cut. It's 'grossly irresponsible' in public, but worth modelling in private.

Don't just take my word for it. Even the New South Wales Premier, Chris Minns, reaffirmed his support for cutting the excise last week. A Labor premier can see the issue, the police can see it, and the community living with the ongoing firebombings can see it, yet the Albanese Labor government cannot face the reality of this situation. The coalition's plan is not about encouraging the uptake of smoking. Nobody here wants a new generation of smokers. It is about deciding who controls the market: Australian law or criminal gangs.

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

The incorporated speech read as follows

I would like to oppose this motion. While it notes real concerns about illicit tobacco, it misdiagnoses the cause and prescribes a dangerous cure that would hand organised crime a permanent foothold in our communities and reverse decades of public health progress.

The motion treats falling excise revenue as evidence that high taxes are no longer effective without commensurate enforcement. That is backwards. Revenue has collapsed because criminal syndicates have built a parallel, untaxed supply chain, not because Australians suddenly need cheaper legal cigarettes.

Treasury and the Illicit Tobacco and E-cigarette Commissioner estimate that the illicit market now accounts for around 50 to 60 per cent of tobacco sales—with ABS estimates up to 80 per cent when all nicotine products are included—worth billions in untaxed profits that fund further crime. Cutting excise to chase that lost revenue would legitimise the black market's price advantage and lock in criminal control.

Australia's tobacco controls have saved lives. Daily smoking is at a record low, with 5.6 per cent of Australians aged 14 and over in 2025, down from 8.3 per cent in 2022-23. Plain packaging, point-of-sale restrictions and sustained excise increases have driven that success. The motion's implied solution, slashing excise, would make nicotine cheaper and more accessible, risking a new generation of addiction. Health authorities, including the Cancer Council and Quit, warn that lowering price and legalising more nicotine products would unwind hard-won gains and increase harm. We do not solve a crime problem by making a deadly product easier to buy.

The motion rightly highlights firebombings and intimidation linked to illicit tobacco. In my own community and across Australia, families have watched illegal storefronts spread through shopping strips, with neighbouring bakeries, cafes and pharmacies caught in the crossfire. But the answer is not to subsidise criminals by cutting their cost base; it is to dismantle their business model with stronger enforcement, proceeds-of-crime action, and coordinated national disruption.

Since early 2024, the Albanese Labor government has invested hundreds of millions in border enforcement, appointed an Illicit Tobacco and E-cigarette Commissioner, and strengthened national coordination to seize large quantities of illicit cigarettes and vapes before they reach our streets. The Combatting Illicit Tobacco Act 2026 expands investigative powers, raises penalties, and targets criminal profits because, if we take away the money, the cars, the warehouses and the laundering channels, the trade becomes unprofitable. That is how you break a cartel, not by cutting the tax that makes their product illegal in the first place.

Proponents of excise cuts argue that it will smash the black market. Evidence suggests otherwise. Criminal networks are agile. They can lower prices further and still undercut any reduced legal price, turning policy into a race to the bottom. Meanwhile, they retain their distribution networks and may pivot to other illicit goods. The coalition's own modelling assumes an 80 per cent excise cut, a two-year trial and a massive enforcement surge, acknowledging that tax cuts alone will not work. If the solution were simply to cut excise, we would not need a $200 million enforcement surge on top of it.

Yes, excise forecasts have been downgraded. But that is precisely why we must double down on disruption at the border, shop closures, licensing reform, and asset confiscation. Every billion dollars we recover by shutting down illicit supply is a billion dollars denied to gangs that fund violence, money laundering, and other serious crime. Surrendering public health policy to criminal pricing strategies would cost far more than lost revenue; it would cost lives.

In Pearce, people want safe shopping centres, honest businesses, and confidence that the law means something. They do not want their local tobacconist competing with an illegal outlet run by a syndicate, nor do they want their kids targeted by unregulated nicotine products. That is why I support the Albanese Labor government's approach: stronger penalties, better coordination, and relentless enforcement against the criminals, not concessions that make their trade easier.

This House should not note this motion. It rewards failure, risks public health, and misunderstands the nature of organised crime. We must confront illicit tobacco with the full force of the law, protect our communities, and preserve the health gains we have fought so hard to achieve.

Thank you.

Debate adjourned.