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

Ms MASCARENHAS (Swan) (18:27): When people think of their childhood, often the sense that they relate to, that brings up old memories, is smell. My dad was a metalworker. When I smell grease, I always think of my dad.

But my dad was also a pack-a-day smoker, and I'm going to say that when I smell tobacco I do not think about my dad whatsoever. He was a pack-a-day smoker but I'm going to say that, with good support from Australian public health professionals, he gave up smoking. This is a part of Australia's good story of what we do when we have good policies in place.

It's interesting because what we see is that the people who are running illegal tobacco trades are organised and adept and they change quickly. They are criminal syndicates that operate across borders, funding shops within our communities that have the ability to pop up and disappear and then pop up again like a bad case of teenage acne that won't go away. These are syndicates that keep on evading harsh penalties, over and over again.

They do not care about Australians, they do not care about public health and they certainly don't care about Australians' lungs. In my electorate of Swan, local businesses are doing the right thing and they should not be undercut by criminals selling illegal tobacco. That is why this government will keep on modernising our laws and it's why I rise to support the Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026.

This Labor government will go after these criminals with the full force of the law. We've been doing this through a step-by-step legislative uplift. This bill is the third instalment.

The first instalment, the Combatting Illicit Tobacco Bill 2026, lifted penalties and fines and improved our ability to intercept illegal product. The second instalment, the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2026, will give AUSTRAC the power to shut down the laundering that this trade enables. This bill creates new offences for importing, possessing and conveying illicit tobacco.

Until now, federal agents had to prove that someone intended to defraud the Australian government of revenue. This was hard to prove because the big players in these networks diluted their accountability by keeping their distance from the importing, transporting and selling of illicit tobacco products. For too long, the rewards were high and the risks were low, which allowed these transnational criminal organisations to take advantage of Australian people.

The new offences introduced in this bill come with a list of observable indicators. Where any one of them is established, it satisfies a reasonable suspicion test. This can include trying to hide tobacco from detection at the border, deceptive packaging or selling prices below excise and the GST combined.

This last one is simple. If a pack costs less than the tax that should be paid on it, officers have reasonable grounds to suspect it came in illegally. These indicators let the Australian Border Force and state and territory police go after the supply chain on the facts in front of them, rather than a complex burden of proof, and it reaches the shops themselves.

Where officers find any one of those signs in a shop, they can take action. We are also building capacity across agencies so they can work together, sharing intelligence and centralising data so that the picture is clearer. This bill also tightens the rules on duty-refundable tobacco.

This is tobacco supplied to duty-free operators for the export or sale to travellers. Right now it sits outside customs control, which opens the door for it to be diverted onto the black market at duty-free prices. This bill restores custom controls until tobacco is exported or sold to an eligible traveller.

For legitimate duty-free operators, very little changes. This bill also streamlines how illicit tobacco is seized and destroyed. The Australian Border Force is detecting record amounts, yet officers lose hours of work because of paperwork on a single seizure.

Cutting red tape frees them up to stop drugs and weapons and other dangerous goods at the border. It also stops criminals using claim and notification processes to delay the destruction of what's been seized. The bill goes after people who give these networks a way in.

Illicit tobacco relies on storage, warehouses, freight and depots that are run to look like legitimate businesses, so the bill adds new licence conditions for custom brokers, depots and warehouses. Licence holders must not help bring prohibited tobacco in the country, and they must take reasonable steps to stop it happening in their own operations. That means these businesses are now accountable for what moves through their operations, and they cannot afford to look the other way.

It also means being more careful about who they do business with. The new offences reach companies as well as individuals, so a distributor, a warehouse operator or a freight business can face charges. The Australian Federal Police have told us that what really hurts these syndicates is taking their cash, their houses, their cars and their assets, so the bill strengthens orders which make offenders pay back what they have made from crime.

It makes clear that criminals cannot subtract the fines they pay from the profits they owe. It updates the production orders so agencies can get the information they need to follow the money, including the proceedings, across every state and territory. It clarifies how unexplained wealth is calculated so that agencies can go after wealth that criminals cannot explain.

But none of this works unless it's enforced where the shops actually are, and that is largely the job of the states and territories. The Albanese Labor government will support every one of them in the fight against the illegal tobacco trade, regardless of politics. We are focused on coordinated disruption at street level to shut down illegal markets and drive consumers back to legitimate products.

That matters because ease of access and convenience are a major driver of smoking rates. We have recently seen that enforcement is working in Queensland. Since November last year Queensland Health can shut down an illegal shop for up to 90 days without even going to court.

Landlords who knowingly rent these to these operators face hefty fines and up to 12 months' jail. To stop these shops from popping back up after a brief shutdown, these enforcement blitzes hit every illegal shop in the area at once. In one recent 10-day operation 148 stores were issued with three-month closure orders and nearly 12 million cigarettes were taken out of circulation.

Legal tobacco sales in Queensland rose by 55 per cent in the first month after those powers began. Interestingly, calls to Quitline more than doubled in the 10 days after the major enforcement of these operations. This data suggests that when illicit tobacco gets harder to find people move to legitimate retailers and some might even decide to quit.

South Australia showed the way, and Queensland has followed its lead. Across the country state and territory governments have announced over 1,000 illegal tobacco shop closures. Enforcement is what works.

We welcome the opposition's support for this bill, but this government will not support policies that echo what tobacco lobbyists want. The coalition's plan to cut tobacco excise by 80 per cent and legalise vapes does exactly that. Take the excise first.

The coalition's 80 per cent cut is an incredibly risky gamble with the health of Australians, and we have seen no modelling of what it would do to smoking rates. You cannot cut a legal price and expect an illegal one to magically disappear. Illicit tobacco can be made for less than a dollar a packet, and it pays no excise at all.

It will always be cheaper, and a tax cut will not put these criminals out of business. We are not interested in joining a price discounting war with organised crime with a race to the bottom. Criminals who pay no tax and follow no rules will always be able to go lower.

A legal price can never beat that. We are not the only ones who see it that way. The Australian Council on Smoking and Health has acknowledged the substantial work this government has done to strengthen the national framework.

These new laws are designed to strengthen border enforcement and help agencies disrupt the criminal networks importing and distributing illicit tobacco. Yet the coalition's answer to the problem is the tax cut. But those opposite don't stop there.

They also want to legalise vapes. Disposable vapes surged in this country during COVID, with bright packaging and flavours like bubblegum, grape and cherry. They were intentionally marketed to young people, and the nicotine in them is highly addictive.

We know that young people who vape are three times more likely to take up smoking. That is why the government banned the importation of disposable vapes in 2024. This side of the chamber is taking practical steps to fight illicit tobacco at every stage of the supply chain through stronger enforcement.

We are working with every state and territory to scale up enforcement and shut down shops. Australia prides itself on having access to some of the best healthcare in the world. Labor introduced Medicare, and protecting people's health is what this government will always do.

Medical experts and academics have warned, as they have done for decades, that smoking is the leading cause of preventable death. It makes up 20 per cent of the cancer burden. Smoking kills 66 Australians every single day.

That's around 24,000 families every year who lose someone that they love. But we've made real progress. In 1991, just over 24 per cent of Australians aged 14 and over smoked every day.

In 2025, the National Drug Strategy Household Survey found it is now under six per cent. Daily vaping has stabilised at nearly four per cent. Those gains are hard won, and this government intends to protect them.

But we also must support people to quit and to never take up smoking in the first place. Smoking remains legal, and this is not about telling anyone what to do. It's about making illicit tobacco harder to get and backing the people who want to quit.

We saw in Queensland what happens when illicit tobacco gets harder to find. Some people move to legitimate retailers and some may decide to quit. Criminals are chasing the next generation of customers, so we want it to be harder for young people to get a hold of this product.

If I think about my 20s, when I used to go out nightclubbing, it was a time when smoking was acceptable in nightclubs. There was lots of alcohol, lots of tobacco smoking, and when you went home and you smelled your hair and your clothes, they would smell like an ashtray. They smelled absolutely disgusting.

What's funny is that, when that policy changed, everyone just got to go home and feel a little bit brighter and cleaner and less disgusting. Australia always is at the forefront of thinking about the way we protect our fellow Australians, whether it relates to plain packaging—we were the first country in the world to do that—or to the banning of smoking in nightclubs.

In making sure that we protect Australians, this is another feather in our cap, because, let's face it, the tobacco industry does not have Australians in its heart, soul or mind. What they really want is your money, and the price you pay for that is your lungs. It's the Albanese Labor government that will keep on modernising our laws and reviewing how they work in practice, making make sure that we protect Australians not just for today but for tomorrow as well.

I commend the bill.