MOTIONS

Senator SHARMA (New South Wales) (17:24): I'm here to talk about an absolute masterclass in policy design that we've seen from the Albanese Labor government. It's almost a miracle that they've come up with a set of policy approaches like this. Normally, when governments tax a product, they intend either to raise revenue or to discourage the consumption of it.

Normally, when governments ban or restrict a product, the intent there is to stop people from using it. But, under the Labor government, the policy framework with respect to tobacco has managed to completely collapse Commonwealth revenue, with taxes falling through the floor; hand an entire industry over to organised crime and criminal syndicates and a black market; and do nothing to actually reduce consumption or the harm from smoking.

So this is a triple crown of policy failure. What we've seen under the Labor government's relentless rises in excise is a legal packet of cigarettes now costing somewhere north of $40. What's happened to Treasury's tax collections from this measure during that time?

Are they overflowing? Far from it. Their revenue has plummeted from about $16 billion to about $5 billion, so the bottom line has gone up in smoke.

They've lost about $11 billion in revenue. But where did all those billions of dollars that were previously collected go? Does that mean Australians are smoking less?

Well, no. The Australian Bureau of Statistics tells us that, overall, nicotine consumption in Australia has actually gone up. The money didn't vanish, though.

What's happened is that it's been appropriated by organised crime and criminal syndicates. The market has effectively been seized by privateers who are now reaping the profits of what is not even a growing but a dominant illicit market. What this approach has done is that it's created the most lucrative low-risk black market we've seen in a Western economy probably since the days of prohibition.

Today we have a situation where almost 80 per cent of all cigarettes smoked in Australia are illicit. They're coming in on yachts, on cargo ships or through smuggling networks. We've got bikie gangs and crime cartels running suburban shopfronts, selling $10 or $15 imported packs, completely tax free, with no revenue being collected there, while legal small-business newsagents, old-style tobacconists, petrol stations and supermarkets are no longer making any sales from tobacco, because it's all gone to the black market.

Part of the result of the involvement of these criminal syndicates is that we've seen turf wars, firebombings and extortion. In the state of Victoria alone, there have been about 200 arson attacks related to the tobacco turf wars, and six homicides are suspected to be linked to this. This is all happening because there's been a complete regulatory failure on this market.

What we've had so far from the government on this issue is complete denial—denial that they are presiding over a failure of this magnitude, with a policy that is doing nothing to reduce smoking or tobacco consumption, is encouraging massive expansion in reach of criminal syndicates and crime gangs, and is hurting government revenue. It's time for this chamber and this parliament to face reality and deal with the world as it is.

It's time for us to stop subsidising organised crime. It's time for us to fix this absolute mess. That is what the coalition is proposing to do.

We're proposing to cut the excise by 80 per cent, which will bring legal cigarettes again in line with illegal tobacco and send people back to the legal market instead of the illicit market. We are going to put more into law enforcement to help clamp down on these criminal gangs. We're going to put more into education, because we don't believe people should be smoking or using vapes or pouches or anything else.

We want to discourage that. But the situation we've got at the moment is failing on all fronts, and we need to get to grips with it. I notice Prime Minister Anthony Albanese has been very careful not to rule this out.

He's sent out his senior ministers to pour scorn on our policy, on the idea that if something's not working, maybe you should try something else. He's been very quick to send his other ministers out, but he has left the door open to engage constructively and thoughtfully on this issue. As my colleague Senator Duniam said, we are open to that because we think this is a public health scourge on Australia, a law-and-order scourge on Australia and a health scourge on Australia.

We would like to fix it. The ACTING DEPUTY PRESIDENT ( Senator Polley ): Senator Sharma, you will be in continuation.