MATTERS OF PUBLIC IMPORTANCE
Mr REBELLO (McPherson) (15:43): I rise to support this motion moved by the member for Canning, and I'd like to also pay tribute to the incredible work of my colleague, the federal member for Monash. We all know that Australia's illicit tobacco trade is no longer simply a tobacco problem. It's an organised crime problem.
The sale of illegal tobacco is fast becoming one of this country's most lucrative criminal enterprises, and it's no longer confined to back alleys in our major cities. It's turning up in our suburbs and in our shopping strips right across the country, including in my electorate on the southern Gold Coast. The reason is not difficult to understand—or so I thought until hearing some of the contributions from those opposite.
For years, governments have continued to increase tobacco excise on an assumption that ever higher prices would simply drive people away from smoking, but public policy cannot be judged solely by what it's intended to achieve. It has to be judged by what it is actually achieving or what is happening on the ground. A legal packet of cigarettes can now cost around $50, with more than $30 of that price coming from tobacco excise.
An illegal packet can be bought for $15 or $20. That's an extraordinary price difference. For people already facing cost-of-living pressures, it's created an enormous incentive to move their purchasing away from legitimate retailers and into the black market, and the result is entirely predictable: organised crime has stepped into the gap.
We've effectively created a market in which criminals can dramatically undercut legitimate Australian businesses, pay no tax, comply with no regulation and then use the proceeds to fund further criminal activity. That's not a theoretical concern. We've seen the firebombings, we've seen extortion and we've seen violence and intimidation connected to the so-called tobacco wars.
In Victoria alone there have been almost 200 tobacco related arsons and six homicides directly linked to the trade. The government estimates that organised crime groups are making somewhere between $4.1 billion and $6.9 billion from illicit tobacco. Those profits don't simply disappear.
They're being fed back into organised criminal networks involved in drug trafficking, scams and money laundering. Behind those statistics are legitimate small businesses—family businesses run by people who pay their taxes, employ Australians, pay insurance and comply with the law—who increasingly find themselves competing against criminal organisations operating outside every single rule that applies to them.
More than 130 legitimate small businesses across this country have already been attacked in connection with this illicit trade, and we can't allow the rest of Australia to follow the same path. We've had thousands of small businesses that work hard, employ locals and do the right thing. They should not be left exposed while criminal syndicates are allowed to build a more profitable business model beside them.
None of this is about encouraging Australians to smoke—in fact, quite the opposite. Almost every family in this country has a story of losing someone to lung disease, heart disease or another illness connected to smoking. But pretending that the current approach is working does nothing to achieve that.
It legitimises what is happening. If legitimate sales collapse while illegal consumption grows, public health does not win; it is the criminals that do. That's why we need to have an honest conversation about price, and the coalition is doing that.
Prohibition and extreme price differences do not work when they simply push an enormous market underground. Returning excise to more realistic levels can take the oxygen out of the illegal trade whilst still discouraging smoking. And that's exactly what we're proposing.
Our plan will cut tobacco excise by 80 per cent, reducing the excise on a standard packet of 20 cigarettes from about $30 to around $6. The purpose is straightforward: you destroy the enormous price advantage that organised crime currently enjoys. But tax reform alone is not enough.
And that's why we've announced that we'll back it with a $200 million nationwide law enforcement surge—more raids, more seizures, more investigations and stronger action—to shut illegal shops, intercept illicit tobacco at the border, follow the money and dismantle all of the criminal networks behind this trade. This isn't a choice between public health and law enforcement, and it's not a choice between sensible tax settings and strong policy.
Australia needs both. Take away the gangs' massive price advantage, bring customers back into the legal economy and then concentrate our police, border and intelligence resources on the criminals who remain, because you can't smash organised crime while protecting its business model. So the coalition has put forward a serious plan.
For the sake of legitimate businesses, our communities and our families, that work cannot begin soon enough.