Senate debates

Tuesday, 14 August 2018


Customs Amendment (Illicit Tobacco Offences) Bill 2018, Primary Industries Levies and Charges Collection Amendment Bill 2018, Social Services Legislation Amendment (Drug Testing Trial) Bill 2018; Second Reading

6:50 pm

Photo of Nigel ScullionNigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—


The Government is committed to closing down the illicit tobacco market, introducing new and strengthened enforcement measures to deter those who profit from the trade in illicit tobacco.

In the 2016-17 Budget, the Government announced a suite of measures to address the growing trade in illicit tobacco and improve health outcomes for Australians. The Government announced annual increases of 12.5 per cent in tobacco duty that will continue until 2020. It also announced funding for the Australian Border Force (ABF) Tobacco Strike Team. These measures have helped to reduce the harmful impacts illicit tobacco has on society, and the deliberate and highly calculated defrauding of the Australian public by criminal organisations smuggling illicit tobacco into the Australian market.

It is evident, however, that these measures alone are not enough. While an increase in the price of cigarettes has contributed to the wellbeing of the Australian community, it has also fuelled the illegal activities of the black market. Increasing cigarette prices has inadvertently created a profit motive for those involved in smuggling activities due to the "low risk high return" view of criminal groups. This has led to a surge in black market activity.

Illicit tobacco smugglers undermine the Government's strategies to promote good public health outcomes, and threaten the viability of law-abiding, local business operators.

To disrupt these criminal groups, the Government has today introduced the Customs Amendment (Illicit Tobacco Offences) Bill.

The Bill is the final, critical piece of a framework that not only promotes the health of all Australians, but also serves as an effective deterrent to criminals involved in the illicit tobacco trade.

The Bill provides the means by which ABF Officers can investigate and enforce the illicit tobacco offences and strengthened penalties proposed in a related Bill led by the Minister for Revenue and Financial Services. Together the two Bills create a comprehensive set of offences targeting the importation, possession, purchase, sale and production of illicit tobacco.

The Bill strengthens the illicit tobacco enforcement regime by allowing the ABF to investigate offences in the Treasury-led Bill where the origin of the illicit tobacco is unknown. This will open opportunities to prosecute illicit tobacco offences as it will not be necessary to establish whether the illicit tobacco was imported or illegally manufactured.

Currently, the ABF can only prosecute tobacco smuggling offences under the Customs Act if knowledge or intention to evade customs duties can be proven. While the penalty is high, the standard of proof has created a barrier for enforcement and prosecution and is not an effective deterrent to those involved in the illicit tobacco trade.

This Bill also creates new offences in the Customs Act for those who are reckless as to whether importing tobacco results in the defrauding of revenue. The standard required to establish recklessness entails a lower level of culpability than that associated with intention or knowledge, alleviating any barriers to enforcement or successful prosecution of these criminal offences which are quite often committed by organised crime syndicates to fund other criminal activities.

This Bill provides an effective deterrence to those who defy Australian laws for their own personal gain, risk the health of the Australian community, and cheat the tax system. This has consequential impacts to the revenue available to put back into the Australian community and threatens law-abiding, local business operators that provide jobs to everyday Australians.

Illicit tobacco is a serious problem that only lines the pockets of organised crime. Criminal syndicates see the illicit tobacco market as a lucrative high return and low risk venture. The profits made by these syndicates can also potentially be used to fund other criminal activities. This needs to be addressed, and has been, through the proposed measures in this Bill and those led by the Minister for Revenue and Financial Services. Without these measures the trade in illicit tobacco will only continue to grow.


Australia's agriculture sector is a fundamental pillar of Australian society and one of the largest contributors to our national growth. The gross value of farm production is forecast to reach $59 billion in 2017-18. Australia's agricultural levy system is one of the foundations of the profitability and competitiveness of our primary industries. The levy system allows primary producers to respond to challenges and opportunities and embrace innovation through collective investment and cooperation.

This Bill makes amendments to the Primary Industries Levies and Charges Collection Act 1991 to support the effective operation of the levy system into the future.

The Act sets out arrangements for the collection of levies and charges on primary products. Levies are collected by the Department of Agriculture and Water Resources and disbursed to 18 levy recipient bodies. These bodies invest in research and development, marketing, residue testing and biosecurity for the benefit of levied industries and the broader economy. By value of production, about 92 per cent of agricultural industries have chosen to have a levy. There are currently 113 levies collected across 77 commodities.

Depending on the structures of each industry, levies are generally collected from individual primary producers by intermediaries at a narrow point in the supply chain—usually at the first point of transfer of the primary product. An intermediary might be a wool broker, or an abattoir. These intermediaries are then required to pass the levies they have collected on to the department.

Australian agriculture's uptake of new technologies means that primary products are now being bought and sold in ways that do not clearly fall within the legal framework established in 1991. To provide clarity for industry, the Bill will allow the Secretary of the Department of Agriculture and Water Resources to determine certain acts which, when performed, would make a person liable to collect and report levies.

The Bill also amends the Act to further support the effective operation of levy payer registers. Levy payer registers will allow the fifteen rural research and development corporations, as key levy recipient and investment bodies, to identify and engage directly with the primary producers who pay the levies that fund their activities. In 2016 the government amended the Act to allow the department to disclose levy payer information to the RDCs for the purpose of establishing levy payer registers. A pilot levy payer register project for the grains industry has since been completed in partnership with the Grains Research and Development Corporation.

Australia's agricultural industries are diverse and there cannot be a 'one size fits all' approach to levy payer registers. The Bill allows for the collection of commodity-specific information in addition to basic levy payer information, in limited circumstances and where it will be of clear benefit to levy payers.

The Act currently allows the disclosure of levy payer information by an eligible recipient to a third party only with the written approval of the Secretary. The Bill facilitates the further protection and proper use of levy payer information by allowing the Secretary to impose conditions on such a disclosure, and revoke the approval if conditions are breached. These decisions will also be made subject to the Act's reconsideration and review provisions.

The Bill will allow the department to publish statistics about levies and their collection to inform industry about the cost effectiveness of individual levies and the system generally.

This Bill will further support the effective operation of Australia's agricultural levy system. The government is committed to a levy system that continues to enable agricultural industries to invest collaboratively and drive future productivity gains.


This Bill will establish a two year trial of drug testing for 5,000 new recipients of Newstart Allowance and Youth Allowance (other) from 1 July 2018.

This is a key component of a suite of measures announced in the 2017 Budget to strengthen and simplify the welfare system. These changes will help people with drug and alcohol abuse issues to get treatment, rehabilitate and get a job.

Research shows us that substance abuse is directly impacting the ability of some job seekers to undertake job search or other activities to get them into work:

      The community has a right to expect that taxpayer-funded welfare payments are not being used to fund drug and alcohol addiction and that job seekers do all that they can to find a job.

      The welfare system is designed to provide a safety net for those who find themselves out of work or unable to participate in the workforce – not to help perpetuate people's drug habits.

      The Australian Institute of Health and Welfare's 2016 National Drug Strategy Household Survey shows that those who were unemployed were three times more likely to have recently used drugs such as ice and other amphetamines than those who were employed.

      For too long, not enough has been done to try and deal with the real connection between drug abuse and unemployment.

      While there are some existing mechanisms in place for identifying job seekers with substance abuse issues and assisting them to seek treatment, the data clearly shows that more needs to be done to help these people.

      The trial established by this Bill will assess the use of drug testing as a means of identifying job seekers with substance abuse issues that may be preventing them from finding a job, and supporting them to get treatment.

      Importantly, the drug testing trial is complemented by the Government's other substance abuse measures.

      This includes, for the first time, ensuring that all job seekers are able to undertake drug or alcohol treatment as an approved activity in their Job Plan.

      Since the commencement of that measure on 1 January 2018, 259 Stream A and B job seekers have had drug or alcohol treatment included in their Job Plan.

      Other measures to ensure job seekers with drug or alcohol abuse issues remain connected to their employment services provider are contained in the Social Services Legislation Amendment (Welfare Reform) Bill 2017 currently before the Senate.

      Measures include removing exemptions from mutual obligations due to drug and alcohol use, and tightening the use of drug and alcohol issues as a reasonable excuse for not meeting obligations.

      These measures are due to commence on 1 April 2018, subject to the passage of that Bill.

      Together, these measures recognise that supporting job seekers to address their substance abuse issues through appropriate treatment is a crucial first step to getting a job.

      Supporting job seekers to take action to overcome their substance abuse will improve their chances of finding a job. This will benefit not just the job seekers themselves but also their families, the wider community and the economy.

      The trial will operate in three locations: Canterbury-Bankstown in New South Wales; Logan in Queensland; and Mandurah in Western Australia.

      Trial sites were chosen based on careful consideration of the available evidence and data, including:

                For the trial to be robust and successful, the Government identified locations with varying profiles and sufficient support services.

                To complement this, the Government has announced a dedicated treatment fund of up to $10 million to support job seekers in the drug testing trial across all three locations.

                The Government will establish this fund to provide for additional treatment support in the trial locations where the existing state or Commonwealth services and supports are not sufficient to meet additional demand as a result of the trial.

                This is in addition to the almost $685 million the Commonwealth Government has already committed over four years to reduce the impact of drug and alcohol abuse on individuals, families and communities.

                This includes an investment of almost $300 million over four years as a part of the National Ice Action Strategy to improve treatment, after care, education, prevention, support and community engagement to tackle ice.

                Comprehensive rules will be set out in a legislative instrument relating to any additional illicit drugs tested for and the protocols for conducting the drug tests, including safeguards to ensure that testing is conducted appropriately and in accordance with relevant standards.

                This legislative instrument will provide the flexibility to ensure that expert advice from the contracted testing provider and the drug and alcohol sector can be taken into account in developing these protocols and safeguards.

                An exposure draft of the Drug Test Rules was tabled at the Senate Community Affairs and Legislation Committee's public hearing into the Welfare Reform Bill on 30 August 2017, and feedback has been gathered for input into further development of the rules.

                There will be appropriate consequences for people who deliberately miss an appointment without a reasonable excuse or refuse a drug test in order to avoid a possible positive result.

                If a job seeker refuses to take a drug test, having acknowledged that they may be required to do so as part of their condition of payment, their payment will be cancelled and they will not be able to re-apply for a four week period.

                Job seekers who test positive to a drug test will have their payments placed on Income Management. This is designed to restrict their access to cash and limit their ability to use their payments to fund further harmful drug use, while not reducing the amount of payment they receive.

                Job seekers who test positive will also be subject to a second drug test within 25 working days and may also be subject to further subsequent tests. This will help to identify those for whom drug abuse is an ongoing problem that may require treatment.

                Job seekers who test positive to more than one drug test during the trial will be referred to a Department of Human Services contracted medical professional with experience in drug and alcohol treatment who will assess their particular circumstances and identify appropriate treatment or support options.

                If the report from the medical professional recommends treatment, the job seeker will be required to participate in one or more treatment activities to address their substance abuse as part of their Job Plan.

                This could include activities such as rehabilitation, counselling or case management.

                This trial is not about penalising job seekers with drug abuse issues. It is about finding new and better ways of identifying these job seekers and ensuring they are referred to the support and treatment they need.

                This measure has been specifically designed as a trial – so we can assess the value of drug testing job seekers as a way of identifying those for whom drug abuse might be a barrier to work and supporting them to undertake treatment.

                There will be a comprehensive evaluation of the trial to determine which aspects have been successful in addressing welfare recipients' substance abuse and barriers to employment.

                The drug testing trial will test an innovative method of assisting people with drug abuse issues.

                I ask the Opposition and the crossbench to support this trial as it will find ways to support and treat people with substance abuse.

                It is imperative that we help these people so that they can find work and not live their lives on welfare.

                Be brave enough to change your mind because if we always do what we've always done, then we will always get what we've always got, and that is simply unacceptable.

                The Government wants ensure that the welfare system provides strong incentives for people with substance abuse issues to get treatment, rehabilitate and find a job.

                Debate adjourned.

                Ordered that the bills be listed on the Notice Paper as separate orders of the day.