Combatting Illicit Tobacco Bill 2026
Ms AMBIHAIPAHAR (Barton) (15:39): I rise today to speak on the Combatting Illicit Tobacco Bill 2026, which is an important and necessary reform that reflects the seriousness of the threat posed by illicit tobacco trade across this country. During my time as a councillor at Georges River Council, I recall many local residents raising this concern, particularly on the rise of tobacco shopfronts popping up everywhere in my local area, particularly within very close proximity to local schools.
This issue is not limited to my electorate, but I'm alive to the challenges within the local planning laws around permitted use, which are enabling the rise of tobacco shops in communities like ours. Parents, teachers and local residents are rightly concerned when these businesses appear near places where young people learn, play and travel each day. It sends the wrong message about tobacco use and it risks normalising products that we know can cause serious harm.
However, this legislation is about far more than cigarettes sold under the counter or untaxed tobacco entering the country illegally. It is about organised criminal networks exploiting gaps in our laws, undermining public health measures, threatening community safety and profiting at the expense of ordinary Australians. Here are some quick statistics from the Illicit Tobacco and E-cigarette Commissioner 2024-25 annual report that shows the seriousness of this problem.
Between 50 and 60 per cent of all tobacco products sold in Australia are illegal and a significant proportion of vape products purchased in Australia was illegal. We think that organised crime groups are earning between $4.1 billion and $6.9 billion in profit from this trade. For too long, illicit tobacco has been viewed by some as a secondary issue, merely a matter of lost revenue or regulatory noncompliance, but the reality confronting our communities today is vastly different.
The illicit tobacco trade has evolved into a sophisticated and highly profitable criminal enterprise. It is now deeply connected to organised crime syndicates that engage in a range of unlawful activities, including money laundering, fraud, intimidation, trafficking and violent offences. That means every illegal packet sold is not just a breach of the law; it is money flowing into the hands of criminals who do real damage in our communities.
The Albanese Labor government recognises this issue demands a strong and coordinated response, and that is precisely why this bill has been introduced. The legislation before the House will strengthen the ability of law enforcement agencies to investigate and disrupt illicit tobacco operations while also increasing the penalties faced by those who choose to profit from this illegal market.
It sends a very clear message: organised crime should not view illicit tobacco as a low-risk, high-reward activity. The bill amends a number of Commonwealth laws, including the Customs Act, the Excise Act, the Proceeds of Crime Act, the Taxation Administration Act and the Telecommunications (Interception and Access) Act. Together, these amendments modernise and strengthen the legal frameworks available to authorities in combatting the illegal tobacco trade.
At the core of this legislation are two objectives. Firstly, the bill seeks to rebalance the risk-and-reward equation for criminal actors involved in illicit tobacco. Criminal syndicates are currently generating enormous profits while facing penalties that are no longer proportionate to the seriousness of the conduct involved.
Those breaking the law would rather cop the fine because it does not actually affect their significant profits. Existing laws have simply failed to keep pace with the scale and sophistication of this market. Secondly, the bill aims to strengthen Australia's proceeds of crime framework so authorities are better equipped to seize and confiscate the profits generated through illicit tobacco activity.
These criminal organisations are motivated by profit. If we are serious about dismantling these networks, we must target the financial incentives that drive them. The scale of the problem cannot be understated.
It is worth repeating that the Illicit Tobacco and E-cigarette Commissioner report estimated that the illicit tobacco market in Australia was worth between $4.1 billion and $6.9 billion in the 2024-25 period alone. That is billions of dollars flowing into the hands of criminal groups rather than being invested in hospitals, schools, infrastructure and essential services for Australians.
These profits are not sitting idle. They are being used to bankroll wider criminal activity. The same organised syndicates involved in illicit tobacco are frequently linked to other forms of serious offending, including drug trafficking, scams, extortion and financial crime.
We have also witnessed disturbing incidents associated with illicit tobacco trade, including violent intimidation, firebombings of tobacco retailers, threats against business owners and criminal disputes spilling into local communities. These are serious threats to public safety and social cohesion. It is important to recognise that illicit tobacco offences are not victimless crimes.
Legitimate small businesses suffer when illegal operators undercut lawful retailers who comply with Australian taxation and public health laws. Workers and local communities are placed at risk when organised crime embeds itself within local economies. Consumers are exposed to unregulated products that may contain harmful or unsafe substances, and our local high streets are taken over by multiple tobacconists rather than the law abiding, community building small businesses.
Perhaps most concerningly, the growth of illicit tobacco threatens decades of progress in reducing smoking rates in this country. Australia has been long recognised globally as a leader in tobacco control and public health policy. Through education campaigns, regulation and taxation measures, smoking rates have steadily declined over time, saving countless lives.
However, the expansion of cheap illegal tobacco products risks undermining these hard fought gains. Criminal groups are exploiting price differences and weakened enforcement settings to distribute the unregulated tobacco products more broadly throughout the community, including potentially to younger Australians. That is why stronger action is required.
The bill introduces increased maximum penalties for a range of illicit tobacco related offences. These enhanced penalties reflect the serious harm caused by this activity in line with the recommendations made by the Illicit Tobacco and E-cigarette Commissioner. Importantly, the stronger penalties will also enable law enforcement agencies to utilise a broader range of investigative tools when targeting illicit tobacco networks.
This includes access to enhanced surveillance and investigative capabilities under existing legislative frameworks. The amendments to the Telecommunications (Interception and Access) Act are particularly significant. By recognising key illicit tobacco offences as serious offences under the act, the amendments ensure agencies will be able to access telecommunication interception powers already available in relation to other forms of organised crime.
This is not about creating unprecedented or extraordinary powers; it is about ensuring consistency across the law enforcement framework and recognising the reality that illicit tobacco crime has become a major organised criminal activity. Law enforcement agencies must be equipped with appropriate powers to investigate criminal syndicates that are increasingly sophisticated, technologically capable and highly organised.
Criminals involved in this trade are not operating in isolation. They use encrypted communications, complex financial arrangements and coordinated distribution networks. Our agencies must have the tools necessary to keep pace.
At the same time these amendments maintain appropriate safeguards and oversight mechanisms, the bill does not impose unnecessary burdens on ordinary Australians, community organisations or legitimate businesses. Rather, it strengthens targeted enforcement against serious criminal conduct. This legislation forms part of the Albanese Labor government's broader and ongoing efforts to combat illicit tobacco and vaping products across the country.
Since 2023-24, the government has invested $346 million into the Australian Border Force to strengthen efforts aimed at detecting and intercepting illicit tobacco and vaping imports. This funding has supported enhanced enforcement activities at the border and within the community. The government has also established the nation's first Illicit Tobacco and E-cigarette Commissioner, backed by $21.3 million in funding allocated in the 2025-26 budget.
This role is critical in coordinating national efforts and ensuring stronger cooperation with Commonwealth, state and territory agencies. The government's approach is built around three central priorities. The first is disrupting and dismantling threats at the border to prevent illicit tobacco and vaping products from entering Australia in the first place.
The second is improving the detection, disruption and destruction of illegal tobacco and vape products both at the border and within local communities. And the third is enhancing coordination and intelligence sharing across jurisdictions through initiatives such as the National Disruption Group and the National Illicit Tobacco and E-cigarette Coordination Forum.
These efforts are already producing results. Since January 2024, the Australian Border Force has seized more than 14 million vaping products and related accessories. In the final six months of last year alone, authorities also seized more than one billion illicit cigarettes.
These figures demonstrate both the scale of the challenge and the importance of sustained enforcement activity. However, no single level of government can address this issue alone. Strong cooperation between the Commonwealth, states and territories is absolutely essential.
Over recent months we have seen encouraging progress in interjurisdictional collaboration. Governments across Australia are increasingly recognising the need for a united response to organised crime in the illicit tobacco market. Through the National Illicit Tobacco and the E-cigarette Coordination Forum, governments have identified priority actions to strengthen enforcement and close legislative loopholes.
These actions include the introduction of stronger licensing schemes, tougher closure orders for illegal operators, increased penalties for landlords knowingly facilitating unlawful activity and expanded on-the-ground enforcement operations. There are signs that these strategies are already having an impact. South Australia and Queensland have reported reductions in illegal trade activity in areas where intensive enforcement measures have been implemented.
Victoria is also progressing reforms to strengthen closure powers and landlord accountability measures. This demonstrates what can be achieved when governments work together with a shared purpose, and the Albanese Labor government remains committed to continuing this cooperative approach. We understand that combating illicit tobacco requires coordination across borders, agencies and jurisdictions.
Criminal networks do not respect state boundaries, and our enforcement efforts cannot operate in silos. Ultimately, this bill is about protecting Australians. It's about protecting communities from organised crime and violence.
It's about protecting legitimate businesses that are doing the right thing. It is about protecting public health outcomes that generations of Australians have worked very hard to achieve. it's about ensuring that criminal organisations cannot continue to exploit weaknesses in the law for massive financial gain. The government understands that strong laws alone will not solve every aspect of this challenge.
Our ongoing enforcement, cooperation and investment will remain essential, but legislation such as this provides the necessary foundation to ensure our agencies have the powers and tools required to respond effectively. We cannot allow Australia to become an attractive operating environment for criminal syndicates seeking to profit from illicit tobacco. We cannot allow organised crime to continue generating billions of dollars while communities bear the consequences.
We cannot allow decades of public health progress to be undermined by illegal and unregulated products flooding the market. Smoking still kills, on average, 66 Australians every day and accounts for 20 per cent of the nation's cancer diagnoses. Two out of three long-term smokers will die of a tobacco related illness.
This bill represents a measured, targeted and proportionate response to a growing national problem. It strengthens penalties, improves investigative powers, enhances proceeds-of-crime mechanisms and reinforces cooperation between governments and law enforcement agencies. Most importantly, it sends a very clear message that illicit tobacco crime will be treated with the seriousness it deserves.