Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026

Mr HASTIE (Canning) (12:02): In general terms, the coalition will support the parliamentary passage of the Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026. However, we are also strongly opposed to the Albanese government's hapless and ham-fisted overall approach to the illegal tobacco crisis in Australia.

That's a matter to which I will return in a few moments. In short, the coalition will always be prepared to endorse measures that will potentially give our border and law enforcement agencies more effective powers to tackle the scourge of illicit tobacco. There is a very clear public interest in ensuring that the Australian Border Force, the Australian Federal Police and other Commonwealth agencies have the legal tools they actually need to disrupt illicit tobacco supply chains, prosecute those who profit from them and prevent weaknesses in our customs system from being exploited by organised crime.

This bill makes a small set of changes in pursuit of those objectives. It revises offences under the Customs Act 1901 relating to the unlawful importation and subsequent possession, movement, sale and supply of tobacco. It also adjusts the evidentiary framework applying to illegal tobacco offences, including the circumstances that might be relied upon to establish that tobacco is illicit.

Those are reasonable reforms. Additionally, the bill amends the Proceeds of Crime Act 2002 to expand access to relevant documents and strengthen provisions dealing with assets that may otherwise be structured or shielded from confiscation. It also makes changes to the regulatory framework for custom depots and warehouses, including licensing, compliance and oversight arrangements and the fitness and propriety requirements applying to licence holders, associated persons and those with access to customs controlled premises and goods.

Again, those are worthwhile measures, albeit that some industry stakeholders are already and perfectly justifiably expressing that there is a need for more clarity on what the definition of 'take all reasonable steps' is. All of us in this parliament should be making it harder for organised criminals to infiltrate— Honourable members interjecting— The DEPUTY SPEAKER ( Dr Freelander ): Order!

The member is entitled to be heard in silence. It's a bit disrespectful. Mr HASTIE: Not the first time, and I'm sure it won't be the last time!

All of us in this parliament should be making it harder for organised criminals to infiltrate legitimate supply chains, exploit weaknesses in customs controlled environments and divert tobacco into the domestic black market—so the coalition won't oppose the broad direction of the bill. However, we should also be very clear about what this bill does not do. It is not a comprehensive solution to Australia's illicit tobacco crisis.

It does not address the root causes of that crisis at all, including the economic ones. These have transformed Australia into one of the most lucrative and profitable illicit tobacco markets in the world. And the introduction of the bill certainly does not detract from the wanton incompetence and negligence of the Albanese government in allowing Australia's illegal tobacco problem to deteriorate so dramatically.

This is no longer some peripheral black market activity; it is a major organised crime problem, a border security problem, a community safety problem, a public health problem and a revenue problem. The Australian Bureau of Statistics has calculated that around 80 per cent of all tobacco and nicotine products consumed in Australia now come from the illicit black market.

It's an astonishing figure. The government's own Illicit Tobacco and E-cigarette Commissioner has also estimated that the value of that market was between $4.1 billion and $6.9 billion in 2024-25, and that the excise and duty evasion for the same financial year was between $7.7 billion and $11.8 billion. It's a huge amount of money forgone in revenue through that excise.

Australians have witnessed the disastrous consequences for themselves. They have seen tobacco shops firebombed, legitimate businesses destroyed, a mass of extortion, intimidation and violence, and organised crime groups fighting rapaciously over territory and profits in suburban shopping areas. Across this country, we've all seen the rise of these illicit tobacco shops, the massage parlours which are really illegal brothels next door, and the associated crime that grows up around it.

It's a real problem, and it's compromising community safety across our great country. This is no longer simply a question of people buying cheap cigarettes under the counter; it is a gigantic organised crime industry, with major consequences for entire communities. Yet the Albanese government continues to behave as though the solution is simply another enforcement announcement, another taskforce, another penalty or another legislative amendment, when that is clearly not the right way forward.

We've all seen the evidence. Even the agencies charged with enforcing these laws acknowledge that reality. The Australian Border Force now describes illicit tobacco as 'a low-risk, high-reward commodity'.

It has also conceded that the market is still continuing to increase in scale, complexity and profitability. In short, criminal networks are exploiting enormous and profitable price differentials. Accordingly, they can absorb seizures and enforcement activity as another cost of doing business because the underlying profits remain so large.

Having established these ratlines that come through our borders, who knows what else is coming to our shores illegally—not just illicit tobacco but also drugs, guns and other tools that terrorists opposed to our country will use to commit acts of violence. These facts are at the heart of the problem. You cannot fix the illicit tobacco crisis by only changing the potential consequences for criminals if you're not equally prepared to address the massive economic incentives that keep drawing criminals toward such a massive honey pot.

Yet Labor has made those incentives even more enticing to criminals. In the 2023 budget, the Albanese government imposed an additional five per cent increase in tobacco excise every year for three years. Those increases took effect in September 2023, September 2024 and September 2025, and they came on top of the existing twice-yearly indexation of tobacco excise.

At the time, the Treasurer and the health minister said that they expected those measures would raise an additional $3.3 billion over the forward estimates. Instead, legal tobacco revenue has completely collapsed from almost exactly that very moment with a phenomenal acceleration in the share of consumers buying the illegal products. These aren't adults who can smoke legally.

We're talking about our youth, our kids, the very people we should be protecting from these illicit tobacco sales. The black market has flourished, organised crime has exploded in association with it, and the government, far from making money, has lost billions of dollars of revenue in the process. These are just some of the many reasons why the coalition has proposed a fundamentally different approach.

Our policy is not based on the fantasy that the government can simply keep increasing tobacco taxes indefinitely, watch the legal market all but disappear and then somehow magically police its way out of the consequences. Our objective is very clear. Our objective on the coalition side of the House is to destroy the business model of the criminal gangs.

That's why the coalition has proposed an 80 per cent reduction in tobacco excise. That would reduce the excise component on a standard packet of cigarettes from around $30 to around $6, with the rate to be reviewed after two years. That is a policy designed to remove the extraordinary price differential that has driven consumers out of the legal and regulated market and into the hands of organised crime.

It is designed to radically alter the current dynamics of the market, to make legal tobacco competitive with illicit tobacco again and to deprive revenue from the criminal gangs and return it to the Commonwealth, to be put to use elsewhere through public health campaigns against smoking, to enforce the law and to also invest in schools and hospitals and infrastructure—all of those things that this Labor government is neglecting right now.

But our policy does not stop with excise reform. We have also proposed a $200 million nationwide law enforcement surge. Yes, we're going to hit them economically, we're going to destroy the business model and we're also going to come after them with the law.

We're going to hit them hard with the law. That will mean more raids, more investigations, more arrests, more seizures, more shop closures and more border disruption. Our work will be designed to give enforcement agencies a fighting chance.

We will enable a stronger operational focus across the Australian Border Force, the Australian Federal Police, the Australian Criminal Intelligence Commission and AUSTRAC. Notwithstanding how well in particular the Queensland government has done in this area without any meaningful help from the federal government, we will also give the state and territory governments much more support than they have received over the past four years.

We have also proposed a legal, regulated and taxed adult market for nicotine vapes and nicotine pouches while maintaining strong protections for children. We live in a world where people are going to smoke and use tobacco products, regardless of the health risks. Everyone knows the health risks of tobacco: lung cancer, emphysema, blood clots, heart disease, throat cancer, mouth cancer, tongue cancer—all sorts of complications.

Please don't smoke. But people will still smoke. That's why we have to be realistic and why we have proposed $60 million for a national public awareness and education campaign.

It is to expose the organised crime behind illegal tobacco and vapes while reinforcing the health dangers of smoking. It is to move people from an illegal black market onto a legal market which at least, in the end, is regulated by the Australian government, delivers revenue to the Australian government and keeps people operating within the law. That's what we want, ultimately.

There are many differences between the coalition's approach and Labor's. For reasons that defy logic, Labor sees illicit tobacco purely as an enforcement problem. The coalition sees the full picture, the big picture, and is addressing excise, regulation, demand, public health, organised crime, border security, revenue and enforcement.

It's great to see young kids up there, Deputy Speaker, as we speak about tobacco. Kids, please don't smoke. It's not good for your health.

The coalition here is working to kill and break the illegal tobacco market and also make the legal tobacco market work for Australians. For reasons that defy logic, Labor sees illicit tobacco purely as an enforcement problem. However, we see the big picture.

You cannot solve this crisis by addressing only one of those things. That's why the coalition intends to use the consideration of this bill to put elements of our policy directly before the parliament. We will move a consideration in detail amendment.

If passed, this amendment will give legislative effect to some of the key components of the coalition's policy package. This amendment includes our proposed 80 per cent reduction in tobacco excise and the necessary legislative changes to establish a properly regulated adult market for nicotine vapes and nicotine pouches. Of course, not every component of our policy can be delivered through amendments to this bill.

Our $200 million law enforcement surge and our $60 million public campaign on educating Australians about the risks of tobacco and smoking use are principally administrative and funding measures. But where this parliament has the opportunity to address and reform the settings that have contributed to this crisis, the coalition believes it should do so. This bill should also be referred to the Parliamentary Joint Committee on Law Enforcement for inquiry and report.

That committee has examined illicit tobacco before. Its remit encompasses the performance and activities of Commonwealth law enforcement agencies, changes in criminal activity and the effectiveness of law enforcement methods. At a time when illicit tobacco has become one of the most lucrative markets for organised crime in this country, there is every reason for that committee to examine whether the government's latest measures are adequate and, more broadly, whether Commonwealth agencies have the full suite of resources, structures and powers they require.

The government should have nothing to fear from that scrutiny. If these laws are as important as the government says they are then they should withstand serious examination. And if there are more lessons to be learned from the catastrophic growth of this illegal tobacco market, parliament should hear from them.

The coalition's position on this legislation is clear. We support stronger enforcement, better laws, tighter customs and border controls, and improved pursuit of the criminal profits generated by illicit tobacco. For those reasons, we will not oppose the bill.

But this bill, again, is nowhere near enough. Australia cannot arrest, seize and prosecute its way out of a market in which organised crime continues to enjoy extraordinary profit margins. Unless the federal government tackles the economic incentives, improves enforcement, restores integrity to the legal market and gives consumers lawful and regulated alternatives, organised crime will continue to adapt and sustain itself.

The choice is very clear: on that side of the House, more illicit tobacco, more organised crime, more Australians breaking the law in purchasing those illegal tobacco products; on this side of the House, reimposing the law, breaking the economic model used to sell illicit tobacco, and enforcing the law and crushing these organised criminal gangs. That's what we want to see: more Australians operating within the law.

The coalition has put forward a comprehensive plan designed to achieve exactly those things, so we won't oppose the measures contained in this bill, and we will seek to drastically improve them by pushing for a much broader response. It will be a response that is capable not merely of, fairly trivially, inconveniencing the criminal gangs behind illicit tobacco but of smashing the market and the model that keeps them in business.

I commend the sensible elements of this bill to the House. However, I also condemn the government for its ongoing unwillingness and ineptitude when it comes to destroying the criminal gangs behind this currently entrenched and evil trade. The DEPUTY SPEAKER ( Dr Freelander ): I thank the member for Canning.

If I can just add, as a deputy speaker, please, kids, don't smoke. It will ruin your health. It will ruin your lives.

Don't smoke. I understand the member for Pearce would like to present a copy of her speech for incorporation into Hansard, in accordance with the resolution agreed to on 6 November 2025.