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

Ms ROBERTS (Pearce) (12:19): The incorporated speech read as follows— I would like to speak in strong support of the Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill. This bill is the next step in the Albanese Labor government's crackdown on the criminals behind the illicit tobacco and vaping trade. It is the most comprehensive modernisation of Australia's illicit tobacco customs enforcement framework since 2018.

It ensures laws designed for a very different market can keep pace with increasingly sophisticated criminal enterprises. Illicit tobacco is not a victimless crime. It undermines public health, harms legitimate businesses, deprives governments of critical revenue and provides significant profits for serious and organised crime.

The trade is being fuelled by a massive surplus of cheap global production. Tobacco can be produced for less than a dollar a packet, and that surplus is being weaponised by transnational criminal networks. These syndicates operate like multinational businesses.

They are sophisticated, well-resourced and commodity agnostic. They do not care whether they are trafficking methamphetamine, tobacco, counterfeit luxury goods, wildlife or human beings. They want to make money and will exploit any weakness in our borders, laws or regulatory systems.

But as we go after these criminals, it is important to recognise that Australia is continuing to make progress in reducing smoking. The latest evidence from the Australian Institute of Health and Welfare shows that daily smoking among Australians aged 14 and over fell to 5.8 per cent in 2025, down from 8.3 per cent in 2022-23. Daily vaping remained broadly stable at 3.6 per cent.

These are hard-won public health gains. They must not be surrendered to criminal enterprises trying to get Australians—particularly young Australians—hooked on nicotine. Smoking remains the leading cause of preventable death and disease in Australia and contributes to around 20 per cent of our cancer burden.

Two in three long-term smokers will die from a smoking related illness. This bill follows the passage last sitting week of the Combatting Illicit Tobacco Bill, which raised penalties, opened up new law enforcement techniques and updated proceeds-of-crime laws. This legislation builds on that work and further raises the stakes for criminals involved in the illicit tobacco trade.

Current tobacco offences often require prosecutors to prove that tobacco was imported with an intention to defraud the revenue. They may also need to demonstrate that the person involved knew the tobacco was subject to customs duty and that duty was payable. That approach is increasingly unfit for purpose.

Organised crime groups have adapted by distancing themselves from the border and importation process. They use layers of intermediaries, shell companies, freight operators, warehouses and retail outlets. Direct evidence of a person's intention or knowledge can therefore be extremely difficult to obtain.

This bill creates new offences for importing, possessing or conveying illicit tobacco. The new framework focuses on unlawful conduct and better reflects the reality of concealed and distributed supply chains. It also introduces observable indicators of illicit activity.

An established indicator may satisfy the reasonable suspicion element; it does not, by itself, establish guilt. Importantly, reasonable suspicion is an objective test. It focuses on observable facts rather than requiring officers to prove every hidden detail of a criminal supply chain.

Indicators include non-compliant retail packaging; non-compliant tobacco products, including products concealed in plain packaging; tobacco concealed to avoid detection; missing import invoices or required paperwork; and tobacco sold for less than the combined value of applicable excise and GST. That final indicator is particularly important. The fact that tobacco is being sold below the excise and GST payable can, by itself, establish reasonable suspicion that it was unlawfully imported.

This will be a powerful tool for the Australian Border Force and state and territory police forces. Anyone involved in the illegal tobacco and vaping trade should take notice. If law enforcement enters a retail premises and establishes one of these indicators, action can be taken.

The focus will be on serious criminals and organised networks. However, the framework will also make it easier to target retail businesses that possess or sell illicit tobacco. The offences apply to a 'person', and under Commonwealth law that includes a corporation.

A tobacconist company, warehouse company, distributor, transport business or logistics company may be investigated and prosecuted where appropriate. Anyone involved in this trade—from senior figures in criminal networks to retailers—should be looking for a new line of work. The bill also introduces stronger consequences for serious offending, ensuring organised criminals receive penalties that properly reflect the gravity of their conduct.

The bill closes an important loophole affecting duty-refundable tobacco. This tobacco is supplied to duty-free operators for export or sale to eligible travellers. Under the current framework, it is not subject to customs control in the way it should be, creating opportunities for diversion into the black market at duty-free prices.

The bill restores customs control until the tobacco is exported or sold to an eligible traveller. This will reduce opportunities for diversion and ensure appropriate oversight throughout the supply chain. For legitimate duty-free operators, these reforms largely formalise existing expectations and practices.

They are designed to close a regulatory gap, not impose unnecessary burdens on responsible businesses. The bill also streamlines the seizure and disposal of illicit tobacco. The amount detected by the Australian Border Force has increased significantly, yet seizure processes remain heavily administrative and resource intensive.

Frontline officers can spend hours documenting and processing individual seizure notices. That is valuable operational time that could instead be spent stopping illicit drugs, weapons and other dangerous goods from entering Australia. These reforms will support faster seizure and disposal processes.

They will also ensure that tobacco imported in breach of permit conditions can be dealt with as swiftly as tobacco imported without a permit. The legislation strengthens integrity across the customs supply chain. Illicit tobacco operations often depend on facilitators and intermediaries that provide access to storage facilities, freight networks, depots and warehouses while maintaining an appearance of legitimacy.

The bill introduces additional licensing conditions for Customs brokers and Customs controlled depots and warehouses. Licence holders will be required to refrain from conduct that facilitates, assists or enables the importation of prohibited tobacco products. They will also have a positive obligation to take all reasonable steps to prevent such conduct within their operations.

The bill elevates existing tobacco related licensing obligations into the legislation and expands the role of the National Customs Broker Licensing Advisory Committee to include applications for new depot and warehouse licences. This will provide a more consistent approach to licensing integrity and compliance, ensuring legitimate operators are not disadvantaged by businesses that facilitate criminal activity.

The second major part of the bill strengthens Australia's proceeds-of-crime framework. Prosecutions should be pursued where the evidence supports them, and illicit tobacco should be seized and destroyed. But these measures alone are not enough.

Organised crime is driven by profit. What hurts criminal syndicates is the loss of their cash, houses, cars, boats and other assets. To create a lasting deterrent, law enforcement agencies must be able to recover criminal profits efficiently.

Monetary penalty orders require offenders to repay the financial benefits derived from criminal activity and help ensure that crime does not pay. This bill clarifies how those benefits are calculated, ensures penalties are reduced only in appropriate circumstances and allows restrained property to be used more effectively to satisfy court ordered penalties. A criminal should not be able to deduct a fine from profits made through criminal activity and claim that the benefit has been repaid.

A penalty is a penalty. The offender must repay the profit and face the penalty. The bill also updates production orders, which help law enforcement obtain information relevant to criminal investigations.

These reforms clarify existing powers, strengthen offences for interfering with production order processes and allow authorities to seek orders during proceedings when new information arises. They also support a more consistent approach across Australia's eight jurisdictions, where rules can currently differ or conflict. Finally, the bill strengthens the unexplained wealth framework by clarifying how a person's total wealth is calculated.

This will support a more realistic assessment of wealth and ensure property owned or controlled by a person can be considered. Together, these reforms will better equip law enforcement to identify, restrain and recover the financial rewards that make organised crime attractive. This bill comes at a time when illicit tobacco networks continue to grow in sophistication.

The reforms modernise enforcement, strengthen supply chain integrity, improve operational effectiveness and ensure organised criminal groups face stronger consequences. Action is being ramped up pre-border, at border and post-border. The best container of illicit tobacco is the one that never reaches our shores or passes through our border.

The Australian Border Force is disrupting increasing quantities of illicit tobacco offshore and at the border. But the most urgent area for action is post-border. State and territory governments must shut the illegal shops.

Australians would not accept a methamphetamine laboratory operating in the middle of a local shopping centre. They should not be expected to accept criminal businesses openly selling illicit tobacco and illegal vapes to children and young people. I acknowledge the nation-leading work of Queensland and South Australia in disrupting this trade.

I also welcome Victoria's new laws, which took effect this week and give inspectors and police the power to close businesses found selling illegal tobacco. Six Melbourne stores in Footscray and Richmond have already been ordered to close for up to 90 days. It does not matter whether the premises is a tobacconist, convenience store, lolly shop, gelato shop, service station, barber, clothing store, restaurant or any other retail outlet.

Any business that chooses to engage in the illegal tobacco trade must be subject to enforcement action. It is deeply disappointing that the coalition has supported an approach that risks allowing the vaping market to expand and undermining Australia's public health progress. This government will not allow criminal syndicates or vested interests to undermine Australia's public health achievements.

I urge all members of this House, and the other place, to support the swift passage of this bill. Our law enforcement officials have asked for these powers. They need the tools to disrupt criminal networks, seize illicit products, confiscate criminal profits and protect our communities.

This bill strengthens Australia's borders, supports legitimate businesses and ensures organised crime cannot exploit weaknesses in our laws or treat penalties as simply another cost of doing business. I commend the bill to the House.