Combatting Illicit Tobacco Bill 2026

Mr LITTLEPROUD (Maranoa) (12:50): I rise to support the intent of the Combatting Illicit Tobacco Bill 2026, but, unfortunately, this bill doesn't have the courage to face up to the facts. The fact is that our society has changed and is continuing to change, particularly with respect to its market habits. Governments of all persuasions for many years have failed to have the courage to address the real elephant in the room, which is excise.

This is entrenching market behaviour that is tearing away at a regulatory model that has protected Australians and has ensured that we have the revenue to be able to pay for the health problems that eminently come from tobacco use and from vapes. The challenge that we now have is that only about 20 per cent of the market—in fact, it's probably gone under 20 per cent of the market—uses a regulated product.

They are using the black-market product because it's cheaper. We have priced this commodity out of the reach of many Australians. The perverse outcome of that is that we are seeing organised crime benefit from this and we are seeing the sheer reduction in excise revenue that goes into the Commonwealth and then, through funding of our health system through our states, to the ability to futureproof Australia's health challenges from the use of tobacco and vapes.

While this is commendable in terms of taking on organised crime with increased penalties, you also need to be able to police it. Consider what we did at the last election, particularly around vapes. This government moved to have vapes sold only through pharmacies, which is pure madness because you can't charge excise once it becomes a prescribed product through the health side of the equation.

It means that we miss out even on the excise of vapes that are prescribed through a pharmacist who did not even want this anyway. There are not too many pharmacists that believe in vapes or believe in nicotine full stop. It's one of the products they don't necessarily want to have to sell, but this government thrust it upon them without any consultation whatsoever.

Yet there is still no excise even out of the vapes that are being sold through our pharmacists. The excise piece is one that we have missed. The reality is that even if you had gone down the path of a regulated model, like cigarettes—a sensible, regulated model through the convenience stores and supermarkets, where only those under 18 could continue to get vapes as well as cigarettes—and you had a regulatory model around the product that was being sold—one of the challenges we are seeing not just with chop-chop but with the vapes is that there is no regulatory control about what the content is.

That adds to the health issues that we're going to have to pay for as a Commonwealth into the future. The challenge is that we have opened up this front without the common sense and understanding of the marketplace and understanding of what has happened. If we had also regulated vapes the way that we do cigarettes, through licensed retailers, we would have collected an extra $3 billion to $4 billion worth of excise.

Of that, we'd prescribe $500 million to law enforcement to be able to go and attack organised crime. While you can lift penalties and you can get a warm, fuzzy feeling in here saying, 'We're going to beat our chest and we're going to bring down this organised crime,' it costs money. Unless you're allocating funds to that, I can tell you that our good friends in the state jurisdictions are not as excited about spending their money on chasing down illicit tobacco.

Their problems in tackling many of the social issues that our police forces around the state are facing up to, such as domestic violence, street crime and youth crime, are far greater. The reality is that they do not have the resources, and they will not have the resources unless someone is prepared to pay. What we have missed in all this is that not only are we losing our revenue stream for the future health problems that we are going to experience but we are missing the opportunity to fund our law enforcement agents properly.

That's why we should be looking at vapes and illicit tobacco in totality. Those products, as many medical professionals say, try to exchange the tobacco, get you off it and onto vapes, and then get you off those altogether. But if you don't include them in the regulatory framework and align how that is achieved from the point of sale through to excise, then you have a marketplace that is out of whack and you have educated a marketplace to fall apart because you have priced one commodity, a regulated commodity, to be out of the reach of many Australians.

In fact, only around 14 per cent of the people who use vapes today actually have a prescription, so prohibition hasn't worked. I was part of the Morrison government that went down this model of prohibition on vapes. We were wrong: prohibition does not work.

But what does work, and what has worked, and we've seen it in the reduction in youth use of tobacco, is—I think, it was actually Nicola Roxon, who, as the health minister, brought this in—sensible reforms around points of sale and advertising. That has seen a reduction of around 70 to 80 per cent in youth usage of tobacco. Having a regulated model through a point of sale of registered retailers meant that, much like alcohol, you had to be above 18 to get it.

There were checks at that point of sale. That had a serious and lasting impact, and I congratulate that health minister for those initiatives. But what we missed and did wrong was to deviate from that model.

We thought that we could simply make doctors prescribe vapes. No-one's going to pay to go and see a doctor to get a vape when they can go down the main street and pick one up anyway. The common sense was not there.

We missed that, and we're to blame for that. There is an opportunity to fix it, but you've got to understand that the market dynamics have changed. We've got to be courageous enough not to sit here and beat our chests and say, 'Yes, we've lifted the penalties.' We've actually got to look at how we take back this marketplace, because we have created a behaviour in the marketplace now that will make it very, very difficult for the regulated product to come back and for consumers to go back to the regulated product, and that is a challenge.

While many of you may want to stand and attack big tobacco, just understand you are hitting a trigger point where big tobacco will leave. If their stranglehold on the market is reduced and they lose their percentage of market in Australia to organised crime, they will pack up and leave. If we are not careful and we do not tackle excise, we will not have a regulated product at all in Australia.

The challenge that we will see is that big tobacco will pack up and go to another international market because Australia is lost. This is the challenge that I don't think we as legislators can see coming. If you take away that regulated product and you take away the regulated point of sale, all that happens is that you get perverse health outcomes.

This is where the bill has missed the mark. The intent is commendable, but the practical reality of the lived experience that we've seen for the last five or six years should be screaming at us that we have to make radical change. There needs to be radical movement towards addressing illicit tobacco and illicit vapes and towards making sure we put in a framework that ensures a regulated product and a regulated point of sale, which is what has served us well and is the model that we should return to.

An ideological model might seem great within these four walls, but out there in the real world it's not happening at all. That's why you're seeing the perverse outcomes of organised crime taking over streets and small businesses and knocking them down. They see the opportunity—the opportunity that's been vacated by governments that have not had the courage to face up to the practical reality of this problem, where it is taking our nation and where it's taking our finances and our health system into the future.

And so, while this may sound good as a bill on the surface, I fear that in another three or four years we'll be back again. If we see that the regulated tobacco market reduces even further, well below 20 per cent to five or 10 per cent, you won't have a regulated tobacco market in this country, and that is a perverse outcome. As funny as that may sound, it will be a perverse outcome, because we won't have those regulated products that protect Australians.

And you can look at that and work that through with vapes. This addiction that governments of all persuasions have had for many years on excise is now being lost because we have now skewed the market to make significant perverse impacts on health crime. I say to this government that, while we support this, it's a very superficial bill.

It doesn't have the backing, the grunt, the intent or the intellectual rigour to shift the dial, as I think we all come to this place with the right intent to do. It ignores the reality of the real world. It is great that you are trying, but have more courage to understand that the market has changed and we need to change with it.

We need to take more radical steps in aligning tobacco and vape excise, reducing that and understanding the elasticity of the market—that, if you reduce that and try to bring that illicit market back into the regulated market, it does have elasticity that will benefit and bring people back to a regulated product, giving us the opportunity to regulate that product, to earn the excise and to invest that excise into our health systems into the future and also in law enforcement.

That would be the commonsense, real solution. This is window dressing at best, and I think we as legislators will fail unless we're prepared to be honest with ourselves and be honest with the Australian people that this is a problem that's got away from us. It's going to take the collective wisdom and courage of this building to understand that tinkering at the edges, making ourselves feel good, beating our chests for five minutes in saying we're coming down on organised crime, means we're going to be back here in three or four years debating the same thing.

All I say to those opposite is: I'm prepared to admit that I was part of a government that got something wrong. I'm asking you not to repeat the mistakes of the past, to understand that this market has got away from us and that it will take collective courage. Unless we have that, I fear Australians will hurt from that not financially but in their health.

We won't have the financial resources to support that and help them when they need it. Thank you for the opportunity to speak on this bill. While I'll support the bill, I ask the government to please understand that the challenges that we are facing are far more significant than what this bill tries to address.

Unless we have the courage to look that in the eye, face up to it and legislate for it, we'll be back here again, unfortunately, with even more perverse outcomes.