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

Mr TEHAN (Wannon—Manager of Opposition Business) (17:19): The coalition thinks that taking good, sensible law enforcement measures to deal with illegal tobacco is a good start, and we support it. But we also will make very clear, and we do so through some of the amendments in this bill, that just taking these measures will not fix the problem of illegal tobacco in this country.

The problem of illegal tobacco in this country comes down to one simple fact: we've taxed tobacco to death. And what's happening is the criminals have stepped in, have found a market and are exploiting it to the tune of somewhere between $4 billion and $6 billion and potentially $8 billion or more. What has happened is criminal revenue has gone up, through to the sky, and the government's revenue has fallen through the floor.

You don't need to have a PhD in economics to understand what the solution to this is. Excise is killing government revenue. Excise is absolutely lining the pockets of the criminals, so much so that—and I know the members on our side know this because we see it in our constituencies—we're seeing illegal tobacco shops pop up everywhere.

This is bad enough that these criminal gangs are making a motza. They're making billions and billions of dollars. But it's worse than that.

It's actually causing serious security issues in our communities because a lot of these tobacco shops are in main streets. I've got them in towns right throughout my electorate, and guess what? You've got the shop, and then, especially in rural communities, you'll often have a flat on top which is rented out.

Those people, unbeknownst to what's happening in the shop below, could sadly be victims of firebombings. They could be asleep at night and all of a sudden—bang! There's a firebombing.

Their safety is seriously at risk, and the government won't address the fundamental problem. We get enforcement modernisation; we're happy to do that. Our policy actually touches on that as well.

We think what you need to do is, and the sensible approach is to, cut the excise. Government actually makes more revenue by cutting the excise. That's how bad things have got out of proportion.

So you cut the excise, and the government makes more revenue. Why do they make more revenue? Because more legal tobacco is sold and less illegal tobacco is sold, so the government makes more revenue.

Then what do you do with that revenue? You have an antismoking campaign—good, sensible stuff—and you make sure you invest in law enforcement to deal with the rogue criminal elements which are left. This isn't 'way out there' policy.

This isn't policy where the government should sit and say, 'For this reason and that reason we're not going to go anywhere near it.' What the government should do is say, 'The coalition's had another good idea.' Coalition MPs have put a lot of time and work into making sure that we've come up with this good policy, and I commend those MPs for having done that.

I particularly single out the member for Monash. They've done a lot of hard work. And what you should be able to do, government, is something like happened with the previous bill: a bit of bipartisanship, and all of a sudden you've got $8 billion in revenue that you don't have now and you desperately need, because that could go to savings, and we would be getting rid of all the criminal elements.

I don't understand why your ego, your pride won't allow you to realise that we've come up with a ripping policy and you should adopt it. I say to all those in government, on the government benches: you need to seriously think about this, because it's the type of policy that would make the Australian people think, 'For once they're getting it; for once the government understands.' And I can tell you, out there at the moment the Australian people think the government has its priorities completely and utterly wrong.

One of the areas where they think you've got it wrong is around crime, and what's causing a lot of the crime is that you are funding criminal activity, criminal gangs through your failed policies. And this one is the doozy of all doozies: you're funding up to $8 billion to criminal activity in this country. We've all seen the photographs: the Lamborghinis and Ferraris they're buying, the overseas holidays they're having—how this network actually funding overseas holidays.

As a matter of fact, some of the criminal heads live overseas. This is what this policy is doing. We need to deal with crime in this nation.

We have to make sure we're doing everything we can to limit it, to restrict it, not to fund it. That's what this policy is doing. It is funding it.

That's why we will support what you're doing here in terms of your enforcement modernisation, but we say to the government, this isn't enough; you've got to address the underlying problem. And what's the underlying problem? There is a tax policy.

We all know that the policy was put in place with the right intentions. The excise was put in place to make tobacco more expensive so people would say, 'I don't think I should smoke, because I can't afford it.' But there are some people—and I get this; I understand—who want to smoke, and it's legal for them to do so. They want to keep doing it, and that's their right.

They know the health impacts; it's made very clear to them. But they decide they want to do it. For those people, we've got to make sure that they're being supplied with tobacco legally rather than illegally.

There are actually some good health arguments for why this should be so. With illegal tobacco, no-one knows what the hell's in it. Through tests that have been done, we know there is some awful stuff in it.

There's some stuff that is carcinogenic beyond belief. People who legally want to smoke but, because of the cost-of-living crisis we're in because the government, through their spending addiction, keep driving inflation through the roof, are now forced to go onto the black market to buy their tobacco, and they're doing more harm to their health by doing that.

How can that be a good thing? Not only are we funding criminals; we're actually leading to detrimental health outcomes for Australians through this policy. I can't see how this makes any sense whatsoever, especially when there is a policy that's fixed this and the policy has been through the Parliamentary Budget Office.

They have said, 'Yes, coalition, you have this right.' Cut the excise by 80 per cent and increase revenue to the government by $8 billion. And guess what? You'd be selling legal tobacco to those people in Australia who want to smoke so you'd actually get better health outcomes for those people.

With the $8 billion that you get back in revenue, you can have an anti-smoking campaign, like the good ones we used to run in this country, and everyone's a winner. At the moment this illegal issue is like an elephant, and all this approach, your enforcement modernisation bill, is doing is removing a little pimple off that elephant's back. You have to address the fundamental problem, and that is the elephant size of excise on tobacco in this country.

You've got to deal with that. If you deal with that, then you deal with the criminal gangs and the criminal activities and you make the community safer. That means that all those illegal tobacco shops, which are springing up left, right and centre right across this nation, all of a sudden don't have a business model anymore.

We've all seen it. They are usually gift shops, those tobacco shops, and you'll see people walking in to get gifts at eight in the morning. They're not going in there to buy their illegal cigarettes.

They're going in there to get gifts. Well, you start to put pay to that because people who want to smoke can afford to do it and can afford to do it legally. So once again, I say to the government: just think about the national interests.

Don't think of your political interests. Think about the national interests. Think about what's in the interests of the community.

Think about what's in the interests of law enforcement. Imagine if law enforcement didn't have to deal with illegal tobacco. Imagine if law enforcement didn't have to deal with criminal gangs which are funded to the tune of $4 billion to $6 billion, maybe $8 billion, by this policy.

Imagine if they could go about keeping communities safe. Imagine if people who lived above tobacco shops didn't have to worry about their flat catching on fire or being firebombed and their lives and their kids being put at risk. Imagine if communities didn't have to worry about some of the money that is used by those criminal gangs to recruit young Australians to get them to do their errands and start them on a life of crime.

Imagine if we were able to deal with all that. We can. We just need the government to open its eyes.

We need the Prime Minister to get out amongst the community. I'm happy, if he wants to come to Wannon, to show him where the illegal tobacco shops are. I'm happy to say to him that there's a better way to deal with this.

I'm happy to introduce him to local police officers who can explain to him what's fundamentally wrong with the current approach. We can do all that by just making sure we have a prime minister who gets out and about and knows what's going on in the community, and then he might come back and say to the relevant ministers: 'You know what? We need to fix this.' The coalition stands ready.

We've got a policy ready to go. It's a costed policy ready to go. It will deal with this issue.

Bipartisan support means the criminal gangs stop getting funded. Bipartisan support means smokers who want to legally smoke in this country can do so and can do so knowing what's in their cigarette rather than not knowing what the criminals have put into the illegal tobacco they're smoking. There's a sensible way forward on this policy.

I look forward to hearing from the next government speaker on this, saying that she's seen the light, and that the coalition has the right path.