Combatting Illicit Tobacco Bill 2026

Ms PENFOLD (Lyne) (13:15): I rise to speak on the Combatting Illicit Tobacco Bill 2026. This bill matters because the illegal tobacco trade in Australia is no longer a minor black-market problem. It's become a major organised crime industry and it's funding criminal syndicates, it's fuelling violence and it's hurting legitimate small businesses.

It's costing Australian taxpayers billions of dollars in lost revenue. Instead of flowing into the government's coffers, revenue generated through the illicit tobacco trade flows straight into criminal networks. That means less money for hospitals, roads, aged care, regional services and national security.

Australians have seen the headlines—firebombings, extortion, violence linked to tobacconists and police raids uncovering warehouses packed with illegal cigarettes and vapes. This is organised crime operating openly in our communities. That is why a bill that confronts the issue of the illicit tobacco crisis is so important.

Whilst I will be supporting this bill, I must say that it is disappointing that, given the opportunity to fix the illicit tobacco crisis I just noted—something like 80 per cent of tobacco and cigarettes being consumed in this country are illegal; that's an enormous figure—Labor, in typical form, have fallen short. The government says this bill will increase penalties, expand investigative powers and target the profits of organised crime.

The government says this bill will create new criminal offences for large-scale illicit tobacco activity linked to organised crime. It says it will substantially increase penalties across the entire supply chain—importing, manufacturing, producing, processing, buying and selling illegal tobacco. They say that the bill will strengthen proceeds-of-crime and unexplained wealth laws so law enforcement agencies can go after the profits and assets generated by illegal tobacco operations.

They say it will expand law enforcement powers, including telecommunications interception powers—in plain language, wiretap powers—so agencies can better investigate criminal syndicates involved in the trade. On paper this bill certainly does sound strong, but in reality it is not. Trust Labor's rhetoric to be completely out of step with reality.

The bill is heavily focused on increasing maximum penalties and not on actually improving enforcement outcomes, and there lies the problem. Penalties without enforcement are useless, just as enforcement without penalties is meaningless. You cannot have one without the other and expect to make a meaningful dent in the illicit tobacco trade.

Furthermore, the imposition of penalties on offenders is determined by the courts and they already do not impose the current maximum penalties. So simply increasing penalties on paper is not going to do anything when the instinct of the courts is leniency. Critically, this bill does nothing to address the core structural issues that have created the illicit tobacco trade in the first place.

Instead, it has actively fuelled this crisis. Labor's 2023-24 budget imposed further increases in tobacco excise on top of already high levels. That decision widened the price gap between legal and illegal tobacco, drove consumers into the black market and made illegal tobacco more profitable than ever for organised crime.

Does this bill attempt to change these disastrous excise settings? No, it doesn't. There is no reconsideration or reconfiguration of the very policy settings that drove consumers to the black market in the first place.

There is likewise no significant new investment of any kind in the already weak border enforcement, in domestic compliance, in operations or in the active disruption of criminal supply chains. And there is no explanation about what the federal government intends to do about a host of practical on-the-ground problems. We have all seen illegal shops shut down only to reopen days later and the criminal networks operating with impunity.

Without stronger enforcement, better coordination and real consequences this bill will not change the overall trajectory of this national catastrophe. We will still have a situation where criminals are getting richer, violence is escalating, small legitimate retailers are suffering and excise revenue is collapsing. Without stronger action illegal tobacco will continue to fund organised crime; drive fire bombings, ram-raids and extortion; and place small businesses and communities across the country at risk.

In my own electorate, there have been break-ins and arson attacks which present economic and safety issues for neighbouring small and family businesses that are legitimate. Real estate agents in Lyne have spoken to me about being under significant pressure because, due to the state of the local economy and the number of empty stores, they're getting frequent requests from supposed convenience stores that do not have a tobacco licence wishing to set up a shop in their premises.

I have two tobacco stores in the street where my Wauchope office is. One of them is legitimate. I can say that only one is legitimate; it has been there a long time.

The other one has what we see in all these shops—all the windows have got branding over them and I have no idea how they can make money from having one fridge with a few drinks, a couple of packets of chips and some chocolate bars. I have seen plenty of people walking outside the store with a lovely white paper bag, only to open it and pull out a packet of cigarettes that are not the Australian branded ones and open it up there on the street.

That is what we are seeing. On either side of that shop are legitimate businesses operating in our community, and I fear for them and I fear for their safety. The Australian Criminal Intelligence Commission has warned that illicit tobacco is now one of the country's fastest-growing criminal markets, and economically the cost of the illicit tobacco trade is significant.

The government's own figures show that the illicit tobacco market is worth between $4.1 billion and $6.9 billion annually. That is billions flowing straight into the hands of organised crime cartels and syndicates, whereas it could be flowing into the Commonwealth's revenue base. You would think that this government, which has created an unprecedented budget deficit, would do everything in its power to re-appropriate these funds, but it is not.

So whilst the Treasurer is going after hardworking Australians with record taxes and rebate reductions, making life increasingly difficult and unfair for them, he is also letting the criminals, the illicit tobacco underworld, get off pretty well scot-free. It is also worth noting that even the government itself, in the explanatory memorandum, concedes the financial impact of this bill is small and unquantifiable.

That tells you almost everything you need to know. Even Labor state governments are exasperated. The New South Wales health minister, Ryan Park, has publicly and repeatedly expressed disappointment at the federal government's failure to act.

When even its own Labor colleagues are pleading for action and getting none, it is clear that the Albanese government is out of its depth. I support strong enforcement against organised crime. I support stronger penalties for criminal syndicates.

I support targeting the money that fuels these operations. And I support giving law enforcement the tools they need to dismantle criminal networks, because if criminals lose the profits they lose the incentive. I will support the passage of the bill because any improvement is better than none, but it is not at all sufficient.

Labor has lost control of illicit tobacco, and this bill does not provide the comprehensive solution that is now required. Labor had the chance to implement far stronger action. Instead, they have run scared.

So I call on the government to go further, to be tough. Incorporate real enforcement action into this legislation. Actively coordinate responses with state and territory governments to support frontline enforcement efforts.

Take action to enforce store closure orders, lease terminations for illegal outlets and meaningful disruption of criminal supply chains. Actively confiscate and disrupt revenue streams. And confront the issue of the pricing signals, demand-side drivers and the problems that have flowed from their catastrophic changes to tobacco excise.

Australia now has some of the highest tobacco taxes in the world. The intention behind those taxes was to reduce smoking rates, and, of course, reducing smoking is an important public health objective, but governments also have a responsibility to confront unintended consequences. When the legal price of tobacco becomes extraordinarily high, organised crime sees opportunity.

That is exactly what has happened. Illegal products are now being sold for a fraction of the legal retail price, and criminal syndicates have stepped in to exploit that gap. Under Labor, illicit tobacco has proliferated across Australia.

Criminal gangs and syndicates have been empowered, and communities are at risk. Now, after years of causing that mess, it is scrambling to look like it is doing something. We're being asked to get behind an inadequate bill and pretend that this will fix it.

It is a partial, belated and wholly inadequate response to a crisis that has exploded on Labor's watch. Australians expect governments to keep communities safe, they expect organised crime to be confronted, not tolerated, and they expect criminal syndicates not to build billion-dollar black markets while taxpayers lose billions in revenue. The Combatting Illicit Tobacco Bill 2026 sends an important message, but it must deliver more than rhetoric.

The Australian government cannot allow organised crime to profit on illicit tobacco unchecked. This parliament must stand firmly with law enforcement, with legitimate businesses and with communities affected by organised criminal activity. We must ensure Australia remains a country where the rule of law prevails over criminal enterprise.

I commend the bill to the House.