The Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026 is designed to enable Commonwealth law enforcement to crack down on Australia's very serious problem of the growing illicit tobacco trade and the organised crime groups behind it, and to strengthen the government's ability to seize criminal profits and unexplained wealth. These are worthwhile objectives that address the supply side to reduce opportunities for illicit tobacco to enter the black market. But the government still hasn't tackled the demand side of illicit tobacco, and it fails to address the primary reason that the illegal tobacco trade is flourishing. That is because government policy, in trying to deter people from smoking through excessive tobacco excise, is driving law-abiding smokers to the illicit market because they can no longer afford legal, regulated tobacco products.

In 2017, illicit tobacco made up around 10 per cent of consumption. By 2025, that figure had exploded to about 80 per cent. Four out of every five cigarettes consumed in Australia are now estimated to come from the black market. Smokers in Australia have turned to illicit nicotine products because the price of legal tobacco has almost tripled, driven by relentless excise increases. Today, a legal packet of cigarettes costs around 50 bucks, with more than $30 of that price made up in tax. Meanwhile, illicit tobacco sells for as little as $15 to $20 a packet. These excise increases, made by successive governments, have handed a multibillion dollar market to organised crime. Labor's vape policy has been just as disastrous. Despite restrictions and bans, illegal vapes are available in shops across Australia. The government itself admits that almost 96 per cent of e-cigarettes sold in Australia are illegal, in a black market worth around $1.6 billion. The profits are staggering. Criminal gangs are making between $4.1 billion and $6.9 billion from illicit tobacco alone. That is truly astounding.

That money is funding drug-trafficking scams, money laundering, extortion and violence, and the illicit tobacco trade has led to arson in Wide Bay, with a tobacco shop on the corner of Hilton Terrace and Earl Street at Tewantin set alight on Good Friday in 2023. A few days later, a tobacco and vape shop in Mary Street in Gympie was firebombed. In Victoria, there have been almost 200 tobacco related firebombings and six homicides linked to this trade. What was a health issue has also become a full-blown law and order crisis. And, whilst criminal gangs get richer, taxpayers are paying the price. The government's own illicit tobacco and e-cigarette commissioner estimates that illicit tobacco represents 50 to 60 per cent of tobacco sold in Australia in 2024-25, with an estimated market value between $4.1 billion and $6.9 billion. Estimated excise and duty evasion was between $7.7 billion and $11.8 billion. The illicit market is costing Australian taxpayers billions that could be funding prevention programs, hospitals, schools and essential services. It's instead ending up in the pockets of organised crime.

The Labor government has no intention of tackling the root cause of the problem. When asked repeatedly whether he would rule out reducing tobacco excise, the Prime Minister has refused to give a straight answer. The coalition has a plan that will smash the organised crime business model. You do not defeat organised crime by protecting its profits; you destroy the profits. We will cut tobacco excise by 80 per cent, reducing the excise component on a packet of cigarettes from around $30 to roughly $6. We will also replace Labor's failed pharmacy-only vape model and end the ban on nicotine pouches by establishing a regulated, legal market for adults. If adults are already purchasing these products, they should buy them from legitimate Australian businesses operating under Australian laws, not from criminal networks.

But this is not just about tax; it's also about enforcement. The coalition will invest $200 million in a nationwide law enforcement surge to shut down illegal tobacco shops, stop illicit shipments at the border, seize criminal assets and target the gang bosses behind these operations. We will back that with a $60 million education campaign exposing the criminal links behind illicit tobacco and vapes. This is about taking billions of dollars out of the hands of organised crime and returning those dollars to the legitimate economy. Most importantly, it is about restoring common sense, because Australians deserve policies that improve health and economic outcomes. They deserve streets free from gang violence, and they deserve a government that is prepared to admit when a policy has failed and is prepared to take action to fix it.

I support the new enforcement powers to stifle supply of illicit tobacco. But the government must also take action to divert demand away from the illicit tobacco market and towards the legal retail market by taking action on tobacco excise.

It's certainly a different perspective when you're in the galleries. I had the great honour just a few moments ago to accompany young students from St Joseph's School Murray Bridge into the chamber. They watched the member for Berowra draw the Speaker to the state of the House. They were interested about why people piled into the chamber and were then just as interested in why they piled out. In any event, having explained the nature of proceedings in this building, I'm down here making a contribution.

I wanted to mention the students from Murray Bridge because overnight in the commercial precinct of Murray Bridge, we had a commercial building set alight. It was an arson attack. I've had the great privilege of representing the community of Murray Bridge for some 13 years, and I'm happy to say that arson of commercial buildings is not something that is common in or around the CBD of Murray Bridge yet last night it occurred. A local journalist has reached out to me. His suspicion is that it might be related to the illicit tobacco trade. We can't confirm that, but I'll be sure to update the House. It is perhaps likely given the circumstances that this is yet another example of the livelihoods of people living in regional communities being put at risk by this illicit trade.

While I'm talking about Murray Bridge, recently a social media video of mine attracted substantial attention. It was simply a video of two packets of cigarettes. One was an illegal packet that on which no excise was paid and another was a legitimate packet of cigarettes. Both were packets of 20. One cost $20 cash—no receipt, I'm told—and the other costs something in the order of $50. That social media video got something in the order of 800,000 views. But what happened in response, I expect from that video or attention otherwise, is that the illegal cigarette shops at Murray Bridge were raided. Now, that is appropriate and the right thing to do. But what I want to draw the House's attention to is my understanding from people living in Murray Bridge that the very next day or the day after, one of those illegal tobacco shops was open again. It was selling tobacco not out of the premises but out of the tin shed out the back. I want to draw that example to the House's attention because, as a former criminal barrister, police would often say to me, 'We're not going to be able to prosecute our way out of—insert particular criminal offence perpetrated by serious and organised crime.' That is the case here.

Serious and organised crime has entered and now dominates the illegal tobacco industry. Those opposite have created an environment in which there is an economic incentive, and that incentive is being enjoyed by criminals. And, whilst the coalition supports the bill's measures, we want to be very clear. These measures don't go far enough. Quite frankly, you can close down as many shops, you can strengthen enforcement and you can modernise those measures, but, if you take action and within days the serious and organised crime gangs that are selling these illegal cigarettes or illicit tobacco to Australians open up again, then quite frankly we're just on this merry-go-round.

So what is the coalition's solution? The coalition's solution is to take away that economic incentive, to reduce it by reducing excise on illicit tobacco. You won't smash the crime gangs unless you smash their business model. There's this fallacy that serious and organised criminals are people that don't understand business or don't have high degrees of business efficacy. Can I tell you, as someone who worked in criminal law, that is a fallacy. The way to crush these gangs and their activity in illicit tobacco trade is to take away the economic and financial commercial incentives for them to do so, and that's exactly what the coalition's plan will do.

As we just heard, that's not the only thing we'll do. We'll strengthen enforcements. We'll move to legitimise and legalise vapes. All of that will move what is a substantial commercial trade from the hands of organised criminals back into the hands of businesses that employ locals, businesses that pay staff appropriately and businesses that take the kinds of measures that are required to ensure young Australians don't access these products in circumstances where they're not—and, quite frankly, shouldn't be—permitted to do so. If a young person enters one of these illegal tobacco shops, I don't reckon anyone is checking for ID. They're not checking for ID.

I know there have been some opponents, including those opposite, who say: 'You're just going to create a new generation of Australian smokers. Smoking rates are in decline.' Cigarettes in this country have never been cheaper. I'm not happy about that, but I'm not blind to the reality of it. They have never been cheaper and, I'd argue, have never been more accessible. So, for those opposite and others in academia and NGOs to suggest that smoking rates in this country are in decline, I really think they need to spend more time where young people are. I, on occasion, do—football clubs, sporting organisations, front bars and other places—and I don't think smoking rates are in decline. I think smoking rates of legitimate cigarettes, those on which excise are paid, are certainly in decline. I heard a figure referenced then, but I've seen other figures that would suggest four out of every five cigarettes sold in this country are illegal.

We've got to smash these business models. Has anyone done some time thinking about what serious and organised crime put that revenue towards? I think we can accept there is more revenue flowing to these organisations courtesy of this trade than you can fly a rocket ship over. But has anyone paused for a minute to say, 'What will they apply that resource to?' I don't think they're building playgrounds. I don't think they're funding schools. They're certainly not funding hospitals. It's being diverted into activity that, by its very nature, no-one—and I mean no-one—in this place wants to see encouraged.

Now, when I was studying economics—I think it was 1995 at Flinders University. The member for Berowra will appreciate this: I did it to get some casual relief from my studies of the law. If someone had told me in macroeconomics 101 that you could reduce a tax by 80 per cent—tobacco excise is a tax—and drive up government revenues by $6 billion to $8 billion, I would have told them they'd spent a bit too much time down at the university bar and that they might have been smoking but it wasn't tobacco. But that's the reality here. The reality is that we've gone so far past the curve, we have created such a gap between legal and illegal products, that we can reduce excise on tobacco and yet we'll raise billions of dollars in additional revenue, which we can spend on the kinds of things that serious and organised crime absolutely won't spend it on.

I've had the great privilege of being the member for Barker for a tick over 13 years now, and, in all my time in this place, I don't think I can remember another time where a policy put to the Australian people had so much upside: more revenue for government; less money in the hands of organised criminals; making it harder for people under the age of 18 to access these products, because, of course, supermarkets and other things are going to be very careful about complying with the law for fear that they might lose licences and other activity; more jobs; less money in the cash economy; more money to legitimate businesses that pay tax otherwise—taxes over and above the excise that's on the packet of cigarettes; more money for businesses that support community sport and other organisations, which is so critical in rural, regional and remote Australia, the likes of which I represent across the electorate of Barker. Win, win, win, win.

If there was ever an opportunity for those opposite to extend the hand and simply say, 'Let's agree that this is a good approach,' this is it. Like I said, it's less money in the hands of criminals; more money in the hands of government in terms of tax receipts; making it more difficult for people who ought not, must not and should not be accessing this product to access it; more money in the hands of legitimate businesses that pay tax—again, more revenue to government—and that employ Australians and do it legitimately and appropriately. Win, win, win, win.

When I get the opportunity, I will update the House on whether the arson that took place in Murray Bridge overnight was a consequence of this illicit trade. If it was, I'll remind the House that, in addition to all the harm I mentioned, this trade is putting the lives and livelihoods of Australians at risk. It is not an uncommon sight now, on our news bulletins of an evening, to see that a delicatessen or a small retail shop has been set alight. I'm not suggesting that it relates to this illicit trade in every case, but I am suggesting that a whopping proportion of them do. There is a serious turf war going on all over this country. The people who are running this trade are rotten, mean and nasty, and they will stop at nothing.

The first responsibility of government and those of us in this place is to keep Australians safe, so the action that we must take—not that we could take or should take—is to strip these criminals of the revenue model that they're operating. We've got to smash their business model, because seeking to prosecute or enforce our way through this to the other side simply won't work. As I said at the beginning of this contribution, one of these illegal stores was shut down in Murray Bridge, only to open up days later. These criminals are agile, and the only way to beat them is to smash their business model. That's our proposal. It'll be good for Australians. It'll be good for Australia. It's putting Australians first, and it's not before time that those opposite reconsider their position and adopt ours.

The explosion in the sale of illegal tobacco and vapes across our country is set to go down as one of the greatest policy failures in Australia's history. This is not only a health crisis; this is not only a revenue and taxation crisis; this is now a full-blown law and order crisis. Right across our country, from our smallest country towns in regional Australia to our largest city streets, illegal tobacco shops are the new boom industry, and the government's policy of repeatedly hiking taxes on tobacco has clearly failed catastrophically. The tax on tobacco has been made so high that it has created a thriving market in illegal tobacco products around Australia. It has created a boom industry for the crooks, criminals and organised crime syndicates. It is outrageous.

We have seen a 4.3-fold increase in the excise on tobacco since 2013. Back in the middle of last year, when I first brought up a policy proposal to slash the excise, the tax on a single pack of 20 cigarettes was $28.06. Today, following further tax hikes through automatic indexation, that excise has ballooned to over $31 per pack. That's more than $1.55 per single cigarette just in tax. We need to slash the tax on tobacco. We need to pull the rug out from under the feet of the organised criminal syndicates and gangs that are running this industry.

Since calling for the slashing of the excise on tobacco last year, I'm pleased to see that my policy position has been plagiarised by One Nation, the Liberals and the Nationals. It's very heartening to see that my ideas are once again being lifted by these political parties. Originality is not their strong suit, and I can look back on bills that I brought to this place. My bill to stop the buying of residential property in Australia by foreigners for two years—that's the ban on foreign buying of residential property—was plagiarised by the opposition and then plagiarised by the government, and it is now, in fact, policy. You have my bill to protect prime agricultural land. As soon as the Nationals got a whiff that that was in here, they had to rush in with their own. I'm not sure that it's going to save them. Then you had my gas reservation policy, which I took to the last election. It was very clearly set out in the election platform that I took to the people of Calare. Again, it was plagiarised by the Liberals and Nationals and then plagiarised by the government. So there you go—they are getting the message.

But the point is that when you push this tax on tobacco to eye-watering levels you do not eradicate demand. You simply hand a multibillion-dollar market to criminal networks. That is what is happening here. It's created a boom industry for crooks. The ABS, the Australian Bureau of Statistics, has estimated that 80 per cent of cigarettes and vapes consumed in Australia last year were illegal. Even if that is at the higher end of estimates, the figure is still unbelievably high; we all know that. How much federal excise has been lost through this misguided policy? Estimates vary, but it's between $7.7 billion and $11 billion. Do you have any idea how many Great Western Highways we could have fixed with that, or how many roads and hospitals and schools we could have built and fixed with that money?

Then there is the violence: the firebombings, the extortion and the hold-ups that are plaguing our communities, from our smallest villages and towns to our largest cities—more than 200 firebombings since 2023; that is staggering. And this is all through a government policy. This has been created by the government. It's the greatest policy fail of its type since prohibition in the United States. I feel really sorry for the legitimate businesses out there who work hard and do their best to employ people. Recently I was at the opening of the new SPAR supermarket at Bloomfield near Orange Hospital. One of the issues the owners raised with me was illegal tobacco and how their sales have plummeted because the sales of illegal tobacco have skyrocketed, and all it has done is enrich criminals. These business owners are hardworking people who employ local people, make big investments—major investments in our area—and what are we doing to support their businesses? We are handing a new business to organised crime.

Nobody in government seems to know which stores are selling legal products and which are selling black-market goods. I mean, you can see them driving around our areas. It is not a secret. In fact, some of them even boldly put up signs advertising vapes—which are illegal, because vapes need to be sold through pharmacies. That's how blatant the disregard for the law is and how ineffective the enforcement has been. And every few months we get a new announcement from the government saying, 'Yep, we're going to do it this time; we're going to crack down on the illegal trade in tobacco and vapes.' It always comes out with a press release, and sometimes there's a press conference. They do a bit of work here and there, but the illegal trade flourishes nevertheless.

So, as I said, since last year I've been calling on the government to take direct, commonsense action and slash this excise and back it up with genuine enforcement. That also needs to be backed up by resources. I know that in the past the federal government has tended to push this onto the states—in my case, the New South Wales government—but there's only so much they can do. I think they're trying. But, honestly, they're fighting a losing battle. The reality is that you cannot tax your way out of this law-and-order crisis. You cannot simply try enforcement on one hand while creating business opportunities for criminals on the other.

So I'm pleased that other parties have now copied, plagiarised, my proposal to slash the excise on tobacco. I'm pleased to see them coming around to the reality on the ground. But talk alone will not fix this crisis. The state and federal governments need to follow through with an effective enforcement regime and system that stamps out the illegal trade coupled with a complete overhaul of these exorbitant taxes that have been the default position and that are creating this flourishing trade in illegal tobacco, which has been a major boost for organised crime. I think that is undeniable. While the government assures us that action is being taken, I don't think government action on this has been anywhere near enough. It hasn't been effective. It's as simple as that.

The safety of our communities and the health of our residents are too important to risk. This cannot go on. Twenty-four thousand people a year die from smoking related illnesses. This is a health crisis. This is a 'law and order' crisis. This is a massive policy fail. We cannot keep handing organised crime a flourishing business. We need to be supporting legitimate businesses in our states and in Australia. Action is needed on this issue now, and the government has dragged its feet on this for too long. So I would urge the government to take action to not only protect the health of Australians but also protect Australians safety and clamp down and do something on this 'law and order' crisis that is sweeping the country through government policy settings. If you do that, you'll actually get more revenue to pay for the schools, roads, hospitals and all of the things that our communities so desperately need. Action on illegal tobacco and vapes is needed right now. What the government has done so far has not been good enough. Fix this problem. Take effective action immediately.

I agree that we need to fix this problem and take action on the illegal trade of tobacco and vapes, but I strongly disagree with the contribution of the member for Calare and the coalition in this place. The hypocrisy is staggering when claiming that it is all the fault of excise that has brought us to the crime crisis that we have. For the benefit of listeners, I will point out that tobacco excise in Australia has gone up under both sides of the major parties whenever they have been in government. In fact it was in 2013, under a coalition government, that the Commonwealth accelerated the tax trajectory by legislating a series of four annual 12½ per cent tobacco excise increases. My understanding is the member for Calare was a member of the coalition at the time. In 2016, the government announced a further multi-year plan for 12½ per cent annual tobacco excise increases running through to 2020, and then under Labor in 2023-26 we've had another round of legislated five per cent annual tax increases over three years.

What we have now is all of the proponents who have gotten us to this situation purporting—without any evidence before this House, I might add. I haven't heard any speaker bring any data that suggests that, by lowering the excise, you will get into a price war with crime and somehow you are going to have legitimate and legal tobacco sales that are going to price beat illegal tobacco which will end up with people choosing to buy legal tobacco and thus revenue will be raised through the excise. What we've seen in other jurisdictions, like in Canada, where the excise has been dropped is a significant increase in smoking rates, which comes at a cost through increased health consequences. What we need to do is make sure that there is strong enforcement. For that reason, I do support the Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026, but I am calling on the government to do more. I agree; this is a huge problem in our communities, and there has to be a way to do more.

I've talked to a local constituent who tells me that illegal tobacco is $9 a pack, and she has no idea what she's smoking. She has no idea what rubbish is in it. When I hear the previous speaker from the coalition even talking about legalising the sale of vapes again—my goodness. Is there no limit to the harm you want to do to Australians? I look at the students that come here, and we know the impact getting sucked into vapes and smoking has on young people. I and the community in Warringah have deep, deep concerns about the resurgence of tobacco and smoking. It's a massive public health issue, and the association with vaping and crime extends deep into every community in Australia.

The bill seeks to amend the Customs Act and Proceeds of Crime Act to uplift the deterrence of criminal conduct with respect to the unlawful importation of tobacco to Australia and to support more effective enforcement and prosecutions. I think this is an important bill. It's the most significant modernisation of Australia's illicit tobacco customs enforcement framework since 2018, and I support the central intent of this bill to strengthen enforcement—more effective penalties, improved seizure and forfeiture arrangements, strengthened investigative powers and greater capacity for law enforcement agencies to pursue the proceeds of crime. It's what we need to work towards stamping out illegal tobacco importation.

We know enforcement alone isn't going to solve this problem. It has to sit alongside a public health education campaign, quitting support, coordinated state and federal enforcement, transparent oversight and proper resourcing. When I was talking to my local constituent who was telling me she was choosing the $9 illegal cigarettes, I pointed out the risks that she was taking—that she was supporting organised crime. She hadn't even thought about it that way. So we need a campaign to remind people of just what it is that they are choosing when they are supporting illegal cigarettes and vapes.

Along with my community, I've been steadfast in calling for stronger controls to control illegal tobacco sales. In 2023, I raised concerns that illegal vape shops were popping up in Warringah. Parents remain deeply worried about vapes in schools and shops operating close to schools. I called for stronger action on importation, disposable vapes and retail proximity to schools, and government assured us that they were doing that. That comes back to a question of changing zoning requirements—for example, so that convenience stores that are going to sell these products cannot just get approval from local government to open in certain locations.

In 2024, I again spoke in support of vaping reforms—the regular concern raised by Warringah parents, carers and educators about young people accessing vapes and the need for strong national legislation to ban importation, marketing, distribution and commercial possession and the much greater marketing or information campaign for people to be aware of and understand the dangers and the toxicity and the risks of vaping. Some of these concerns have been addressed by ramping up enforcement on illegal tobacco, but it has been a piecemeal approach, and the widespread availability of illegal vapes and illegal cigarettes remains incredibly concerning.

We have a great track record in Australia of building one of the most successful tobacco control systems in the world. We have established plain packaging, advertising restrictions, public health campaigns, excise settings, quit support and strong regulation. That is a great achievement, but that success is absolutely being challenged by the fast-growing illicit tobacco and vaping market.

The rapid rise in vaping among young Australians is particularly alarming. NSW Health reports that 16- to 24-year-olds have the highest vaping rates of any age group, at around 20 per cent, and according to the Australian Institute of Health and Welfare, in 2023, 28 per cent of 14- to 17-year-olds had tried an e-cigarette, almost triple the rate from just before, in 2019. More than 87 per cent of 14- to 17-year-olds who used nicotine e-cigarettes obtained them without a prescription. More significantly, tobacconists are popping up within 300 metres of schools, all over the place in our areas and communities. Products that should never be in the hands of children are being sold through ordinary-looking shopfronts, often with little regard for the law. That is unacceptable.

There are vapes for sale at pocket-money prices. I'm regularly contacted by parents and carers whose teenage kids are addicted to illegal vapes. Parents feel powerless. One local mother described it as being 'traumatic to be battling an addiction and facing dealers at every street corner'. At a local government level, they can't do anything to deter tobacconists from opening close to schools in their area. So we need some strong leadership and some change to town planning rules, and that comes back to working with state jurisdictions around where we can and can't have these stores. We have to make sure we deter tobacconists from opening up.

I'm supportive of the government's response to the illegal tobacco trade. Legislative reform to tackle illegal tobacco remains important to disrupt the criminal supply chains, making illegal tobacco less profitable. I also support the second reading amendment moved by the member for Kooyong, Monique Ryan. We cannot ignore years of enforcement failures and then claim that reducing tobacco excise is the solution. Again I say: we haven't actually seen any data or any PBO costings that would even suggest the link that is being proposed by many members in this place. Tobacco excise has been a critical part of Australia's successful public health approach to reducing smoking. There is no good reason to cut tobacco excise at this point in time. Rather than making smoking cheaper, we need to make illegal tobacco harder to obtain and less profitable to sell. Making smoking cheaper will just kick the can down the road and make sure we have greater rates of smoking, and we will then pay the price of a public health crisis.

The priority must be stronger enforcement, effective retail licensing and meaningful penalties that deter criminal activity. But legislative reform for enforcement is only part of the solution, so I urge the minister and the government to consider the four areas that need to have more focus. Commonwealth, states and territories need a nationally coordinated enforcement model. We need stronger controls on retail locations, ensuring that tobacco and vape shops are not opening up near schools. We need urgent, sustained public health advertising and education in schools and workplaces about nicotine addiction and vaping harms, particularly for young people—they simply do not think that vaping is as bad as smoking, and that is horrendous. We need better public information on enforcement outcomes and illegal sales. We must make it harder to sell illegal tobacco and vapes and harder to profit from it, and we have to make it easier for young people and all people to quit.

The bill provides better tools to disrupt criminal tobacco importation and recover criminal proceeds. Those powers need to be backed up by adequate resources for the Australian Border Force, the Australian Federal Police and other relevant enforcement agencies. Stronger penalties will only deter criminal conduct if there is a credible prospect of detection, prosecution and enforcement. The measure of success must be fewer illegal products on our streets, fewer young people becoming addicted and less money flowing to organised crime. Without these complementary measures, we risk strengthening enforcement at the border while leaving serious gaps in the domestic market.

Australia has demonstrated that strong, evidence based tobacco regulation works. We have reduced smoking rates, protected public health and saved lives through decades of reform. The growth of the illegal tobacco and vaping market demands a stronger and more coordinated response. Every day the illegal retailers continue operating, more young people are exposed to nicotine addiction and criminal networks continue to profit. Schools should not have to compete with illegal vape sellers operating just down the road, and communities should not have to live with the consequences of organised crime exploiting gaps in our regulatory system. I support the bill, but I urge the government to go further. In particular, we should be banning any donations from these harmful industries in relation to tobacco or vaping. I note that the National Party remains the party that accepts donations from the tobacco industry, so that puts in question a number of things. I urge the government to be tough and to continue with sensible reforms.

I rise to speak in support of the Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026. This bill creates new offences for importing, possessing and conveying illicit tobacco, including an aggravated offence carrying up to 10 years imprisonment for large-scale and organised offending. It closes the loophole that has led to duty-refundable tobacco leak from duty-free shops into the black market. It streamlines seizure and forfeiture powers. It tightens obligations on the customs depots, warehouses and brokers that sit in the gateway of our supply chain. It also strengthens proceeds-of-crime laws so that the profits of this trade can be stripped from the people who make them. I do support this bill wholeheartedly.

I've spoken in this House before about Australia's illicit tobacco problem, so I won't repeat the evidence today, but it is serious. I've consulted widely, spoken to people on all sides of this debate and looked at the evidence, including the experience in Canada and elsewhere. And I'll be honest: I'm frustrated by where this debate is heading and by the stubbornness on all sides about solving this properly. Successive governments have watched a slow-motion car crash, and this government has watched it accelerate. Excise rates have gone up while excise receipts have gone down. Crime has grown. And, seriously, I never thought I'd hear so much mainstream reporting about the Laffer curve. We have passed enforcement measure after enforcement measure, and we are not seeing the progress that we need. That is my fundamental concern in relation to this bill. While I support the measures, I do not yet have the confidence that this is actually going to fundamentally address the issues nor do I have clear guidance from the government about under what circumstances it will consider going forward, including reviewing the excise as a potential measure.

I want to protect public health. Of course I do. Australia's low smoking rates are something that we should be celebrating, because this is about outcomes that are good for Australian families. But health is no longer the only objective at play. We are also talking about organised crime, community safety and billions of dollars in lost tax revenue. These matter too, particularly the organised crime element of this and community safety. That really matters in our community.

On price, let me be clear I don't believe we will ever really undercut the criminals, but we can stop making the gap worse. At the very minimum the excise should be frozen. I do not understand why the government hasn't taken the action to at least freeze the excise now rather than continue to increase the gap between the cost of cigarettes on the black market and the cost of cigarettes on legitimate markets. I am open to considering a reduction beyond that, but I want to see the modelling and I want to see greater detail in terms of that first. The numbers put forward by One Nation and coalition are about as scientific as a finger in the air, and that is why I won't be supporting the amendments here. I want to see the government take these options in terms of excise cutting seriously. What I want to see the government do is, honestly, come up with a goal that is measurable in a time period after which they will change or not make further changes in terms of illicit tobacco, including excise cuts, because we don't have enough clarity about what the government is seeking and what the government's own success measures that are in this bill are seeking to achieve.

I think we're also not talking about how easy these products are to get. There are estimated to be more than 40,000 tobacconists in Australia. That's more than fast food or takeaway outlets. It is now easier to buy a packet of cigarettes in this country than a cheeseburger. It's simply incongruous with the advertised rates of smoking. Equally, we cannot realistically expect underresourced police and health officials to monitor that many outlets. The Commonwealth should be working with the states and territories to substantially tighten retail licensing. Tobacco should be sold by fewer businesses and only by those with diversified product ranges and the reputational considerations that outweigh the incentives to break the law.

I think it is irresponsible for the coalition to be considering introducing new legal nicotine products before first considering how to make these products harder to get in the first place. Yes, some legitimate businesses will be affected. I don't say that lightly, but this problem has gone so far that we have to be prepared to make hard choices. Some bad operators will reopen as mixed businesses. That's, again, something we'll need to accept, but it will stop the neon advertising of tobacco on every street corner and make consumers less certain of which products are and are not selling.

That is what a comprehensive response to this problem looks like. Stop widening the price gap. Make it harder to access these products legally or illegally, and be ruthless on enforcement. Let's be honest. We may need to make adjustments to these approaches over time. We are in uncharted territories, and we don't know what is going to work or what isn't. International case studies are few and far between, and the most representative one is 30 years old. The system isn't working currently, and the government needs to be honest about that and tell the public when and by what measures they are going to consider altering their approach, including considering changes to tobacco excise. It is up to the government now to do this and to make sure that what they're putting in place this time actually works.

I thank the previous speaker for her thoughtful, intelligent contribution, and I'll thank all but one of the members who've contributed to this debate on the Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026. I was on chamber duty last night and I had an OH&S issue as I listened to the member for Goldstein screaming in an unhinged way, drifting, to the point where he was just really goading us to take points of order as he offensively compared the government to a bunch of organised criminals. It reminded me of when Peter Dutton compared us in opposition to a bunch of paedophiles, but I wasn't going to give him the satisfaction of making him withdraw. It was offensive. But everyone else, I think, has made genuine contributions.

This bill delivers a comprehensive package of reforms to modernise Australia's response to illicit tobacco and strengthen the tools available to law enforcement agencies to combat a growing and increasingly sophisticated criminal enterprise. The reforms address elements in the current framework that have been exploited by organised criminal groups involved in the importation, distribution and sale of illicit tobacco. They will improve enforcement outcomes, strengthen supply chain integrity and ensure that criminal groups face stronger consequences for their conduct.

The bill strengthens the illicit tobacco offence framework by introducing new offences that better reflect the realities of modern illicit tobacco offending. Current offences often rely on proving what an offender knew or intended at the time of importation yet, of course, criminal groups have adapted their methods to make this increasingly difficult. The bill focuses more closely on the unlawful conduct itself, and this will make it far easier to hold offenders to account, and will improve deterrence against illicit tobacco activity.

The bill will also help ensure that the seriousness with which prohibited tobacco imports are treated under the customs framework is elevated. This will ensure that enforcement responses more appropriately reflect the harms caused by illicit tobacco and the profits generated by organised criminal activity. This bill closes a legislative loophole that allows duty refundable tobacco to fall outside customs control while it remains in Australia. This was a result of the 2018 reforms, which were well intentioned, but it needs to be closed. This reform will reduce opportunities for diversion of cheap tobacco into the black market, while improving a practical compliance framework for legitimate duty free operators.

The bill modernises seizure and disposal processes for illicit tobacco, enabling more efficient enforcement action and preventing criminals from exploiting administrative procedures to delay or frustrate the destruction of illicit tobacco. The bill also strengthens integrity across the customs supply chain by introducing additional statutory obligations for customs brokers, depots and warehouses, and establishing new oversight mechanisms for applications for depot and warehouse licences. These reforms support legitimate businesses while targeting those who facilitate illicit tobacco activity.

Finally, the bill strengthens Australia's proceeds of crime framework by clarifying and strengthening production order powers used to investigate criminal assets and recover the proceeds of crime. The bill also improves the operation of pecuniary penalty orders so that offenders are more effectively deprived of the financial benefits derived from their criminal conduct and can no longer exploit uncertainty in the current framework to retain illicit profits. And the bill clarifies the operation of unexplained wealth provisions.

All of this is important, because, as the Federal Police and state police have explained to us, prosecutions are important but they're slow and expensive. What really hurts these crooks is to go after them immediately and take their cash, their houses, their cars, their boats and their toys away, and the bill will modernise the proceeds of crime framework to make that easier for the authorities to do that. Together, these reforms as a package will strengthen Australia's ability to identify, trace and take away the proceeds and benefits of crime, making the illicit tobacco trade less profitable for criminals. The theme here, as we've said before in the debate on the previous bill a few months ago, is to change the equation and reverse the equation and make it more risky and less profitable as a trade.

I'd like to now just record the government's response to the coalition and Greens senators' recommendations in the Senate Legal and Constitutional Affairs Legislation Committee's report. This bill was referred to the Senate Legal and Constitutional Affairs Legislation Committee for consideration and report, and the committee recommended that the bill be passed. I thank the committee for its careful consideration of these important reforms and support of the bill. Some senators raised issues relating to the implementation of the new supply chain integrity measures in schedule 5, including consultation with industry, the provision of guidance material, education and compliance support and ensuring that obligations remain practical and proportionate for legitimate operators.

The government recognises the important role played by customs brokers, depot operators, warehouse operators and other law abiding supply chain participants. Since the introduction of this bill, the Australian Border Force has engaged with these affected stakeholders, and schedule 5 will be implemented in consultation with them. I actually met this morning with the customs brokers and freight forwarders association and had further productive discussions. Broadly, I think they support the bill as long as they're consulted about the implementation, which is what's happening. Compliance arrangements will be designed to focus on reasonable and practical steps that support supply chain integrity while minimising unnecessary regulatory burden on legitimate businesses.

Senators also highlighted the importance of ensuring that legislative reform is complemented by broader operational and policy measures to combat illicit tobacco. The government agrees—and the previous speaker made the point, rightly—that no single measure alone can resolve the illicit tobacco problem. This bill forms part of a broader government response that now includes several rounds of legislative reform and significant investment in border enforcement, with the Australian Border Force achieving record levels of seizures at the border through Campaign Printwall and now Operation Printwall; criminal investigations, which have accelerated; proceeds-of-crime action, which is being increased by all jurisdictions; disruption of illicit tobacco supply chains, now led by the national disruption group led by the Australian Border Force; cooperation with the states and territories, which continues apace; and public health measures.

The government has already introduced major tobacco and vaping reforms and enhanced enforcement capabilities and resourcing across Commonwealth agencies. It continues to provide law enforcement agencies with the tools they need—the powers in this bill reflect the requests and advice of our law enforcement agencies—to investigate, disrupt and dismantle organised criminal networks involved in illicit tobacco and vapes.

Some senators proposed additional measures relating to track-and-trace, retail regulation and state and territory enforcement arrangements. I want to assure the House that the government will continue to work collaboratively with the states and territories on measures that strengthen the integrity of tobacco supply chains, improve compliance and enforcement outcomes and support efforts to disrupt the sale of illicit tobacco through retail channels.

Previous assessments have not identified sufficient operational benefits, however, to justify the very significant cost to industry of a track-and-trace regime. The government is conducting a cost-benefit analysis of the requirements under the World Health Organization Framework Convention on Tobacco Control's Protocol to Eliminate Illicit Trade in Tobacco Products, including track-and-trace. This consultation is currently underway. Track-and-trace is unlikely, though, to materially disrupt illicit tobacco markets at this time—you've always got to look at the cost-benefit of these things—as criminal actors already operate outside regulatory frameworks, and a track-and-trace scheme, on the advice we have at present, would not impact consumer demand for cheap illicit tobacco. Intelligence, compliance and enforcement activities remain the key drivers of illicit-tobacco detection and disruption. The government will also continue to consider measures that enhance visibility and transparency across the tobacco supply chain.

Senators also emphasised the importance of reducing demand for tobacco products and supporting smoking cessation, and this is incredibly important. The previous speaker and, I know, a number of speakers, including those on the coalition side—some of them may have a different view on some aspects of policy, and I heard a range of views, but there are some coalition members that remain very committed to Australia's longstanding policies over generations to reduce tobacco consumption and therefore save lives. The government remains committed to a comprehensive public health approach to tobacco control. This includes maintaining strong tobacco control measures, supporting smoking cessation initiatives, promoting evidence based approaches—not 'the vibe of the thing'—to reducing smoking prevalence and continuing public education efforts aimed at improving health outcomes and reducing the harms associated with tobacco use.

It is still the leading cause of preventable death in our country. I don't want to see the next generation return to what my grandpa's generation suffered. Frankly, I know the communities you represent, Deputy Speaker, have the highest rates of adult smoking anywhere in our country. The Northern Territory has by far the highest rates of adult smoking anywhere in the country. Today, 66 Australians will die of a smoking related illness; tomorrow, 66 more Australians will die of a smoking related illness. This government will not surrender the gains which have been hard-won over generations in driving down adult smoking rates.

Finally, some senators also advanced alternative policy proposals concerning tobacco excise, vaping regulation, public awareness initiatives and operational enforcement settings. The government is working with and supporting all jurisdictions to overhaul their laws, scale up enforcement and shut the shops. Frankly, I'll say it again, the big states have been too slow to act. But I acknowledge action is now happening, which is welcome. Just last week, I released data showing that sales of legal tobacco in Queensland have increased and that the Queensland model, which was built on the pioneering South Australian model of enforcement, is driving people to then call the Quitline. We've correlated that there's a spike in calls to the Quitline when they go out and enforce in a particular region, and that's a good thing. These laws will make it easier for all jurisdictions, right across the country, to go after any business involved in this trade. It doesn't matter whether they're a tobacconist, a convenience store, a lolly shop, a gelato shop, a servo, a barber, a clothing shop, a restaurant or any retail outlet. Any retail premises that chooses to engage in illegal tobacco trade and support organised crime can be targeted for closure, and they'll lose their business and livelihood under these laws.

We can win this fight against organised crime. It is a disgrace that the coalition has decided to get into bed with One Nation, big tobacco and criminal syndicates to let vapes rip through a new generation of Australians and then make money by taxing them as the market grows, which it will. I'll finish on this point. I do accept that views differ as to the most appropriate policy settings. The government considers that this bill delivers important and necessary reforms that will strengthen Australia's response to illicit tobacco, better protect the community from organised criminal activity and provide law enforcement agencies with more effective enforcement tools. I commend the bill to the House.

The question is that the member for New England's amendment to the member for Kooyong's amendment to the second reading motion be agreed to.

A division having been called and the bells having been rung—

As there are fewer than seven members on the side for the ayes, I declare the question resolved in the negative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

The question now is that the member for Kooyong's amendment to the second reading motion be agreed to.

Question negatived.

The question now is that this bill be now read a second time.

Question agreed to.

Message from the Governor-General recommending appropriation announced.