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

Ms BELYEA (Dunkley) (18:02): One Nation and the coalition want to tell the Australian people that their policies to cut excise are a step forward, but standing still on the edge of a cliff is not progress. Hearing contributions and discussions on this debate, there has been something that continues to get lost—the extraordinary progress Australia has made in reducing smoking rates in this country.

Twenty-five years ago, smoking was a much more ordinary part of Australian life. In 2001, 19.5 per cent of Australians aged 14 and over, smoked daily. Among adults aged 18 and over, the figure was 20.1 per cent.

Today, those numbers are dramatically different. The latest Australian Institute of Health and Welfare's National Drug Strategy Household Survey shows that in 2025, just 5.6 per cent of Australians aged 14 and over smoked daily. Among adults aged 18 and over, the rate was 5.8 per cent.

That is a fall of more than two-thirds since 2001, and that is good national policy. The number of Australians smoking daily has fallen from around three million to just 1.3 million. This is an important and excellent public outcome, which reduces the burden on our healthcare system.

Current vaping declined from seven per cent to six per cent over this period, 2025-2026. Dunkley is part of that story. That progress matters because tobacco remains one of Australia's major preventable causes of disease and death.

It is a burden on our health system. When we talk about illicit tobacco, we need to understand what is at stake. We're not simply talking about an unpaid tax bill.

We're talking about an illegal market operating outside the regulatory system that Australia has spent decades building. Illicit tobacco is a global problem. Countries with very different approaches to tobacco taxation and regulation experience problems with illegal tobacco markets.

Australia is not unique in confronting organised criminal networks that see tobacco as an opportunity for profit. In 1994 Canada sought to stop illegal smuggling by cutting the excise by 48 per cent. This resulted in 30,000 preventable and premature deaths and, later, a class action which saw a $32.5 billion settlement.

The coalition are proposing an 80 per cent cut to the excise. These so-called policies by One Nation and the coalition will lead to more smoking-related deaths and increased pressure on our health system. So my question to them is: how many deaths are you willing to accept?

With this policy, any shred of credibility that the coalition and One Nation claim to have on health goes up literally in smoke. The economics of the illegal market help explain why. A pack of cigarettes can reportedly be manufactured cheaply in parts of South-East Asia and then sold for several dollars a packet on Australia's illicit market.

That creates an enormous margin of profit for people prepared to break the law, and that is where the public policy problem becomes much bigger than tobacco excise. When criminal organisations can make substantial profits from importing, manufacturing and distributing illicit tobacco, they have an incentive to establish supply chains, recruit people, move money and find businesses through which to distribute their products illegally.

That is why the response cannot be simply about decreasing a tax rate; rather, it must be about not legitimising the black-market trade. This problem requires compliance and enforcement, it requires cooperation between Commonwealth agencies and state and territory authorities and it requires action at every stage of the supply chain. The government has committed more than $365 million since 2024 to tackling illegal tobacco and nicotine products.

That includes $188.5 million in the 2024-25 budget for the Australian Border Force to strengthen action against illegal tobacco imports. It also includes $156 million in the 2025-26 budget to strengthen compliance and enforcement against illicit tobacco and nicotine products. The 2026-27 budget includes a further $20 million for measures including supporting state and territory compliance.

The government has also established the national disruption group, led by the Australian Border Force, bringing together Commonwealth, state and territory agencies. That matters because the illicit market does not respect jurisdictional boundaries. The response therefore cannot be confined to one agency or one level of government.

There is work before tobacco reaches Australia. There is work at the border. The Australian Border Force is working with international partners to identify and disrupt shipments even before they reach our shores.

Between 2025 and 2026, that preborder work prevented more than 35 million cigarettes, 26 tonnes of illicit tobacco and around 500,000 vapes from entering Australia. At the border, the scale of seizures has also increased significantly. The ABF reports that in 2025-26 it seized more than 2,300 tonnes of illicit tobacco and 13 million vaping devices.

Offshore seizures of cigarette sticks increased by 496 per cent, compared with an increase of 232 per cent in the previous financial year. Those numbers represent products that did not reach Australian communities and revenue that criminal organisations did not receive. But seizures are only part of the response.

Once illicit tobacco has entered Australia, state and territory authorities have an important role to play. More than 1,000 stores have been shut down nationally under state and territory enforcement regimes. The Commonwealth has also been working to follow the money.

The AFP-led Criminal Assets Confiscation Taskforce has restrained more than $47.5 million in assets since June 2026. The Illicit Tobacco National Disruption Group has identified more than 100 people of interest associated with the illicit tobacco industry. AUSTRAC has received more than 700 suspicious-matter reports relating to illicit tobacco.

And the Multi Agency Strike Team, involving agencies such as the AFP and the ATO, has charged seven people in operations targeting two multimillion-dollar criminal organisations involved in the illicit tobacco trade. These are examples of what a disruption strategy looks like when it moves beyond the border and follows the criminal enterprise through its finances and distribution networks.

But there is another group that deserves attention in this debate: local retailers. The overwhelming majority of small businesses in communities like Dunkley are legitimate businesses. They employ local people, pay rent and wages, comply with the law, and contribute to their communities.

An illicit tobacco market can put those businesses in a very difficult position, particularly when illegal products are sold through premises operating outside the rules that legitimate retailers are expected to follow. That is why enforcement cannot stop with Commonwealth border operations. States and territories need effective compliance teams and powers that allow them to close premises where illegal tobacco is repeatedly being sold.

Landlords also have a role to play when premises are knowingly being used for illegal activity. Long-term closure orders and appropriate landlord penalties can form part of a broader enforcement response. But enforcement is only one side of tobacco policy.

The other side is helping people quit. It's important that we do not turn smokers into the target of this debate. Nicotine dependence is an important part of the picture.

It's an addiction. The public policy objective is to reduce smoking and nicotine dependence while ensuring that people who want to quit can access appropriate support. The latest national figures give us reason to continue that work.

The decline in daily smoking means Australia has made enormous progress. But 5.6 per cent still represents around 1.3 million people smoking daily. There are people who have smoked for decades, there are people who are trying to quit and there are others who have tried several times and not yet succeeded.

Then there are families supporting someone they love through the process. That is why tobacco control has to combine prevention, regulation, enforcement and cessation support. We also need to recognise that nicotine use is changing.

The 2025 survey found that daily vaping among Australians aged 14 and over is around the same level as it was in 2022-23. That gives us an opportunity to respond to the evidence rather than treat every nicotine product as though it presents exactly the same policy challenge. The principle remains straightforward: Australia's public health policy should be based on reducing tobacco related harm, preventing young people from becoming dependent on nicotine and supporting people who want to quit.

And illicit tobacco should not be allowed to undermine that work. The government's approach is, therefore, about disruption before the border, at the border, after the border and through the financial system. It's about cooperation between agencies and governments, making illegal supply chains harder to operate and removing criminal profits.

We are ensuring that legitimate businesses are not left to compete with an illegal market. There is no single measure that will eliminate illicit tobacco. The scale of the international market means that enforcement will remain an ongoing task.

But that is not an argument for giving up, like those opposite proposed we do. It's an argument for continuing to improve intelligence, border enforcement, financial disruption, and state and territory compliance. Australia has spent decades building a tobacco-control system that has delivered one of the most significant public health challenges of our generation.

The task now is to make sure that progress continues. We should not confuse a declining smoking rate with a problem that has disappeared. For Dunkley, as for communities across Australia, the goals should be clear: fewer people taking up smoking, more people able to quit, legitimate businesses protected from illegal competition, and organised criminal networks prevented from profiting from tobacco.

The measure of success will be whether fewer young Australians become addicted to nicotine, more smokers are able to quit, and the next generation is smoking even less than the current generation. And that is progress worth protecting.