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

Mr SMALL (Forrest—Opposition Whip) (13:20): The Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026 is one word for another bandaid on the bullet hole that is the illicit tobacco market in Australia today. Unfortunately, our illicit tobacco crisis has spiralled so far out of control and it has become so serious that this parliament can't reject any practical improvement to enforcement mechanisms, regardless of the fact that this bill represents a failure to comprehensively tackle this problem.

We have seen some 300 firebombings. We've seen kidnappings and extortion. We have seen Australians killed on the front line of the black market for tobacco in Australia today.

Unfortunately, this bill represents only a step in the right direction and is far from a smoking gun, if you'll forgive the pun. The bill does make various changes to Commonwealth enforcement frameworks applying to tobacco and the movement and possession of that tobacco within Australia. It establishes clearer offences, and government speakers have spent some time articulating that.

The issue—and the reason that we have such little confidence in the government's ability to respond to this—is that, after all of their horrendous mistakes and missteps, the failed predictions and the repeated mismanagement of this issue, these changes make Commonwealth laws only slightly more effective in terms of their enforcement. But they fail to deal with the fact that excise is pushing Australians to seek out black market cigarettes.

It is plain human nature that, where they can obtain cigarettes at a fraction of the cost of lawful cigarettes in Australia, Australians who are doing it tough under this government's homegrown, inflation-driven cost-of-living crisis will do so. Throughout human history we have seen that punitive measures on enforcement alone can never address a problem that is as far out of control as it is today.

Indeed, the ABF themselves have said that you can't seize your way out of this crisis by playing some sort of whack-a-mole operation with limited resourcing. Albeit this bill increases their resourcing and addresses some of the measures under the Proceeds of Crime Act that we've seen play out, it again falls short of what a truly comprehensive response to this crisis would be.

The reason we know that this falls well short of a truly comprehensive solution is that we have tabled one. Rather than—as we have under the Albanese government—watching illicit tobacco develop into a major organised crime issue for border security, community safety and public health and, ultimately, into a revenue problem, we've seen them ignore our calls for a comprehensive response, which includes dealing with excise.

The government's own Illicit Tobacco and E-cigarette Commissioner estimates that illicit tobacco represented some 50 to 60 per cent of tobacco sold in Australia in the 2024-25 financial year. The problem with that is that it's on the low end of estimates. Indeed, we see public estimates that indicate that, in the current environment, some 80 per cent of cigarettes sold and smoked in Australia are illegal.

Not only does that mean that they are not paying excise—which, again, depending on the estimates you believe, ranges from some $8 billion to $11.8 billion a year in forgone revenue, which is desperately needed for a budget that's so deeply in deficit, as we see today—it also means that those tobacco products and cigarettes don't carry the health warnings that the Labor Party, when last in government, mandated.

So, not only do they have the sexy branding and gold embossed packaging and the like; each cigarette, when lawfully sold in Australia, must carry its own health warning—failing to do so in some 80 per cent of cases. This is a crime crisis, it's a health crisis, and it's a revenue crisis. That's why the Australian Criminal Intelligence Commission describes illicit tobacco as one of the most significant organised crime commodities in Australia.

It's remarkable that you'd see an Australian government agency talking about black market cigarettes as a commodity in Australia today. This problem, unfortunately, is not simply about people buying cheap cigarettes under the counter. As I said, hundreds of firebombings, intimidation, extortion and violence associated with this market have seen legitimate small businesses and innocent community members caught in the crossfire.

This is across the country, including in my own electorate of Forrest. In the south-west corner of WA, even in smaller communities like Margaret River, we have seen organised crime seizing upon the extraordinarily lucrative and profitable opportunity that a market which is so deeply taxed and so underenforced has created. The ABF has also described illicit tobacco as a low-risk, high-reward commodity—again, that commodity word, it's remarkable!—whilst observing that the market continues to grow in scale, complexity and profitability and that organised crime networks are exploiting the profitable price differentials that are presented through that extortionate tax and in the form of excise on cigarettes.

So, despite the fact that there have been various bandaids slapped on this problem by the government—repeated penalty increases, funding announcements and new enforcement measures—we continue to see the problem spiralling out of control. We continue to see billions of dollars foregone in revenue that should be benefiting the budget and should be invested in health outcomes for Australians.

We see legitimate businesses doing it tough, and we see innocent community members caught in the crossfire. Senior ABF officers have described in Senate estimates to this very parliament that the government's response was a chronically underresourced and 'whack-a-mole' operation, alleging that there were no real intelligence collection and not enough experienced people left to do it.

That's the central problem at the core of this bill. While we keep talking about trying to strengthen laws and at the same time organised crime figures can continue to achieve extraordinary profit margins, of course they will continue to enter and ruthlessly exploit the market, which effectively makes criminals out of ordinary Australians who are doing nothing except what could be reasonably expected when they're under such financial duress.

It's not illegal to smoke tobacco in Australia, so why are we persisting with a regime that effectively makes criminals out of ordinary Australians who are making the choice to smoke? We have presented a comprehensive and costed alternative, one that delivers some $8 billion of benefits in a budget, that includes an 80 per cent reduction in tobacco excise and that makes the cost of lawful cigarettes in Australia approximately comparable with those available on the black market.

We also proposed a nationwide law enforcement blitz, supporting additional raids, arrests, seizures, investigations, shop closures and border disruption, with a stronger operational focus across all agencies including the ABF, the AFP, the ACIC and AUSTRAC. What that would do is deliver a comprehensive solution to address this multifaceted problem. At the same time, we would invest $60 million in a national public awareness and education campaign to address, in public, the rise of the issues associated with organised crime behind illicit tobacco and vapes and reinforcing the dangers of smoking.

We seem to have missed a trick with a whole generation of younger Australians who haven't grown up with the smoke aware campaigns that my generation certainly did. I think that's one of the glaring holes that I personally would love to see filled because, whilst I say that it is not illegal to make that decision, Australians should be fully informed about the risks to their own health and indeed the health of those around them and those near and dear to them that smoking represents.

We're not going to stand in the way, because this is a step—another bandaid on the bullet hole—but it is far from a comprehensive and costed solution to the problem overall. I thank the House.