Susan McDonald (Queensland, National Party, Shadow Minister for Resources and Northern Australia) Share this | Hansard source

The Customs Legislation Amendment (False Trade Marks Infringement Notices) Bill 2026 deals with a serious and growing issue, the importation of counterfeit goods into Australia. At its core, the bill does two things. Firstly, it introduces a new strict liability offence for importing goods that bear false trademarks. Secondly, it brings that offence within the customs infringement notice scheme. In practical terms, this means that the Australian Border Force would be able to issue a financial penalty notice in relevant cases rather than relying only on seizure of goods or court action.

The government's argument is that many importers of counterfeit products currently face no real consequences beyond losing the goods themselves and, for some, that seizure may simply be treated as a minor cost in a much wider overall trade. The coalition recognises that counterfeit imports are a serious problem. They undermine legitimate Australian businesses, they distort fair markets, they expose consumers to unsafe or substandard products, and they are frequently linked to organised crime. Globally, counterfeit and pirated goods are estimated to account for around 2.5 per cent of world trade, amounting to hundreds of billions of dollars annually. Here in Australia, relevant authorities seize millions of dollars worth of counterfeit products each year, ranging from clothing and electronics to cosmetics, pharmaceuticals, vehicle parts and children's products.

These goods are not merely cheap imitations. Counterfeit medicines may be ineffective or dangerous, counterfeit electrical goods may not meet basic safety standards, counterfeit vehicle parts may put road users at risk and counterfeit children's products may expose vulnerable Australians to harm. So, on the surface, the government's proposal to strengthen enforcement in this area is reasonable. The idea of giving the Australian Border Force an additional enforcement tool, particularly one that sits between seizure and prosecution, has logic to it. For those reasons, the coalition will support this bill. But support for the objective of the bill does not mean the parliament should simply wave it through without scrutiny.

When the coalition first considered this legislation we believed there were several important questions to examine. The first concerned the use of a strict liability offence. Strict liability means there is no need to prove intent or knowledge. The offence turns on the fact that the goods were imported and bore a false trademark. That is a significant step. Strict liability can be appropriate in some regulatory contexts, but it also carries risk. It can capture inadvertent or low-level conduct and affect small businesses or individuals who may not have deliberately set out to do the wrong thing. That raised various questions about proportionality, fairness and the practical operation of the law.

The second issue was the apparent absence of a clear trigger for this legislation. There has been no major public incident, no clearly identified enforcement failure, and no new data or report that explains why this reform is being brought forward now. That did not necessarily mean the reform was wrong, but it did mean the parliament was entitled to ask, Why this bill? And why now?

The third issue was consultation. The evidence available to us suggested there had been limited recent formal stakeholder engagement. Some key stakeholders who were contacted in the preparation of the coalition's response were not even aware of the bill's existence. For a reform that creates a new offence and expands penalty powers, that was concerning. That is why the coalition took the responsible step of referring the bill to a Senate inquiry on the papers. That process allowed us to hear directly from affected stakeholders, examine the strict liability approach and test whether there may be unintended consequences. Importantly, that was a proportionate course of action. It did not unnecessarily delay the bill but ensured proper additional scrutiny before its final passage. As a result of that inquiry, the parliament is now better informed. We therefore sincerely thank every individual and organisation that contributed to that inquiry.

While some organisations proposed potential amendments, the coalition has chosen not to move them, in part because it was clear that they would not have had sufficient numbers in the Senate to pass. However, that does not mean these concerns should be overlooked. We will keep a close eye on the operation of this legislation and how these new powers are used in practice.

The coalition supports action against counterfeit goods and stronger enforcement where appropriate, but we also support getting the law right. Counterfeit importing is not a victimless issue. It harms legitimate businesses, undermines consumer confidence, distorts markets, supports organised crime and can endanger public safety. However, effective enforcement must be balanced with fairness, proportionality and proper safeguards. We will therefore support the bill while continuing to closely monitor how these new powers operate in practice. I thank the Senate.