Jenny McAllister (NSW, Australian Labor Party, Shadow Assistant Minister for Families and Communities) Share this | Link to this | Hansard source

This piece of legislation, the Customs Amendment (Collecting Tobacco Duties at the Border) Bill 2018, is part of a range of measures to crack down on the proliferation of illicit tobacco in Australia. This bill, along with two others which are due to be debated later this week, implements measures in the 2018-19 budget under the banner 'Black Economy Package'.

Labor is supporting the passage of this bill to stop illicit tobacco and ultimately improve health outcomes for Australians. Our commitment on this side of the house is to stop the scourge of tobacco, and that speaks for itself. Smoking is the single most important preventable cause of ill health and death in Australia, accounting for more than 15,000 deaths each year. Labor governments have led the way and made significant advancements towards drastically reducing that number.

The bill will require tobacco importers to pay import duty on tobacco products upon importation into Australia from 1 July 2019. This removes the option of imported tobacco products entering Australia and a licensed warehouse without the payment of import duties. Labor supports these measures to tackle the black economy and to stop illicit tobacco entering the supply chain. Illicit tobacco is tobacco sold to Australian consumers without the payment of relevant taxes, and it's reported that close to a quarter of the illegal tobacco sold in Australia is actually leakage from licensed warehouses. By applying duties at the border rather than when tobacco leaves the warehouses, we're closing this loophole and the potential for illicit tobacco to be spreading in Australia. I support the bill.

Anne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I too rise to speak on the Customs Amendment (Collecting Tobacco Duties at the Border) Bill 2018 and thank the member opposite for her contribution on this important matter. The Australian government is absolutely committed to combating the black market in illicit tobacco. In fact, in October 2017 the Black Economy Taskforce delivered its final report to government. The 2018-19 'Black economy package—combatting illicit tobacco' budget measure gives effect to the report's recommendations, including establishing a new framework to protect tobacco duty, a permit system to import tobacco and the Australian Border Force led Illicit Tobacco Taskforce.

Together, these measures will disrupt illicit tobacco supply chains and deny criminal groups access to illicit profits that fund their other criminal and black economy activities. To give effect to the new framework to protect tobacco duty, the government is introducing the Customs Amendment (Collecting Tobacco Duties at the Border) Bill. Current legislation allows duties on tobacco to be paid at the point when tobacco products leave licensed warehouses, as well as when they are imported. Leakage from these warehouses to the black market contributes to around a quarter of illicit tobacco in Australia.

From 1 July 2019, tobacco importers will be required to pay all duties on tobacco upon importation. From that date, the option to put imported tobacco into a licensed warehouse and delay the payment of duties will no longer be available. This will deny criminal groups the opportunity to defraud the Commonwealth of revenue that secures essential services for all Australians and prevent criminals from undermining government strategies to improve public health outcomes, and it will protect law-abiding local business operators. The bill will also include transitional arrangements for the treatment of tobacco that is in warehouses currently as at 1 July 2019. By tackling black economy activities in the tobacco warehouse environment, the government will protect Australian revenue, protect the health of Australians, reduce criminal activity and provide an estimated $3.3 billion in revenue to the Commonwealth. I thank members for their contribution to this very important debate and commend the bill to the Senate.

Question agreed to.

Bill read a second time.