Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026
Mr HILL (Bruce—Assistant Minister for Citizenship, Customs and Multicultural Affairs and Assistant Minister for International Education) (17:14): I thank the previous speaker for her thoughtful, intelligent contribution, and I'll thank all but one of the members who've contributed to this debate on the Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026.
I was on chamber duty last night and I had an OH&S issue as I listened to the member for Goldstein screaming in an unhinged way, drifting, to the point where he was just really goading us to take points of order as he offensively compared the government to a bunch of organised criminals. It reminded me of when Peter Dutton compared us in opposition to a bunch of paedophiles, but I wasn't going to give him the satisfaction of making him withdraw.
It was offensive. But everyone else, I think, has made genuine contributions. This bill delivers a comprehensive package of reforms to modernise Australia's response to illicit tobacco and strengthen the tools available to law enforcement agencies to combat a growing and increasingly sophisticated criminal enterprise.
The reforms address elements in the current framework that have been exploited by organised criminal groups involved in the importation, distribution and sale of illicit tobacco. They will improve enforcement outcomes, strengthen supply chain integrity and ensure that criminal groups face stronger consequences for their conduct. The bill strengthens the illicit tobacco offence framework by introducing new offences that better reflect the realities of modern illicit tobacco offending.
Current offences often rely on proving what an offender knew or intended at the time of importation yet, of course, criminal groups have adapted their methods to make this increasingly difficult. The bill focuses more closely on the unlawful conduct itself, and this will make it far easier to hold offenders to account, and will improve deterrence against illicit tobacco activity.
The bill will also help ensure that the seriousness with which prohibited tobacco imports are treated under the customs framework is elevated. This will ensure that enforcement responses more appropriately reflect the harms caused by illicit tobacco and the profits generated by organised criminal activity. This bill closes a legislative loophole that allows duty refundable tobacco to fall outside customs control while it remains in Australia.
This was a result of the 2018 reforms, which were well intentioned, but it needs to be closed. This reform will reduce opportunities for diversion of cheap tobacco into the black market, while improving a practical compliance framework for legitimate duty free operators. The bill modernises seizure and disposal processes for illicit tobacco, enabling more efficient enforcement action and preventing criminals from exploiting administrative procedures to delay or frustrate the destruction of illicit tobacco.
The bill also strengthens integrity across the customs supply chain by introducing additional statutory obligations for customs brokers, depots and warehouses, and establishing new oversight mechanisms for applications for depot and warehouse licences. These reforms support legitimate businesses while targeting those who facilitate illicit tobacco activity. Finally, the bill strengthens Australia's proceeds of crime framework by clarifying and strengthening production order powers used to investigate criminal assets and recover the proceeds of crime.
The bill also improves the operation of pecuniary penalty orders so that offenders are more effectively deprived of the financial benefits derived from their criminal conduct and can no longer exploit uncertainty in the current framework to retain illicit profits. And the bill clarifies the operation of unexplained wealth provisions. All of this is important, because, as the Federal Police and state police have explained to us, prosecutions are important but they're slow and expensive.
What really hurts these crooks is to go after them immediately and take their cash, their houses, their cars, their boats and their toys away, and the bill will modernise the proceeds of crime framework to make that easier for the authorities to do that. Together, these reforms as a package will strengthen Australia's ability to identify, trace and take away the proceeds and benefits of crime, making the illicit tobacco trade less profitable for criminals.
The theme here, as we've said before in the debate on the previous bill a few months ago, is to change the equation and reverse the equation and make it more risky and less profitable as a trade. I'd like to now just record the government's response to the coalition and Greens senators' recommendations in the Senate Legal and Constitutional Affairs Legislation Committee's report.
This bill was referred to the Senate Legal and Constitutional Affairs Legislation Committee for consideration and report, and the committee recommended that the bill be passed. I thank the committee for its careful consideration of these important reforms and support of the bill. Some senators raised issues relating to the implementation of the new supply chain integrity measures in schedule 5, including consultation with industry, the provision of guidance material, education and compliance support and ensuring that obligations remain practical and proportionate for legitimate operators.
The government recognises the important role played by customs brokers, depot operators, warehouse operators and other law abiding supply chain participants. Since the introduction of this bill, the Australian Border Force has engaged with these affected stakeholders, and schedule 5 will be implemented in consultation with them. I actually met this morning with the customs brokers and freight forwarders association and had further productive discussions.
Broadly, I think they support the bill as long as they're consulted about the implementation, which is what's happening. Compliance arrangements will be designed to focus on reasonable and practical steps that support supply chain integrity while minimising unnecessary regulatory burden on legitimate businesses. Senators also highlighted the importance of ensuring that legislative reform is complemented by broader operational and policy measures to combat illicit tobacco.
The government agrees—and the previous speaker made the point, rightly—that no single measure alone can resolve the illicit tobacco problem. This bill forms part of a broader government response that now includes several rounds of legislative reform and significant investment in border enforcement, with the Australian Border Force achieving record levels of seizures at the border through Campaign Printwall and now Operation Printwall; criminal investigations, which have accelerated; proceeds-of-crime action, which is being increased by all jurisdictions; disruption of illicit tobacco supply chains, now led by the national disruption group led by the Australian Border Force; cooperation with the states and territories, which continues apace; and public health measures.
The government has already introduced major tobacco and vaping reforms and enhanced enforcement capabilities and resourcing across Commonwealth agencies. It continues to provide law enforcement agencies with the tools they need—the powers in this bill reflect the requests and advice of our law enforcement agencies—to investigate, disrupt and dismantle organised criminal networks involved in illicit tobacco and vapes.
Some senators proposed additional measures relating to track-and-trace, retail regulation and state and territory enforcement arrangements. I want to assure the House that the government will continue to work collaboratively with the states and territories on measures that strengthen the integrity of tobacco supply chains, improve compliance and enforcement outcomes and support efforts to disrupt the sale of illicit tobacco through retail channels.
Previous assessments have not identified sufficient operational benefits, however, to justify the very significant cost to industry of a track-and-trace regime. The government is conducting a cost-benefit analysis of the requirements under the World Health Organization Framework Convention on Tobacco Control's Protocol to Eliminate Illicit Trade in Tobacco Products, including track-and-trace.
This consultation is currently underway. Track-and-trace is unlikely, though, to materially disrupt illicit tobacco markets at this time—you've always got to look at the cost-benefit of these things—as criminal actors already operate outside regulatory frameworks, and a track-and-trace scheme, on the advice we have at present, would not impact consumer demand for cheap illicit tobacco.
Intelligence, compliance and enforcement activities remain the key drivers of illicit-tobacco detection and disruption. The government will also continue to consider measures that enhance visibility and transparency across the tobacco supply chain. Senators also emphasised the importance of reducing demand for tobacco products and supporting smoking cessation, and this is incredibly important.
The previous speaker and, I know, a number of speakers, including those on the coalition side—some of them may have a different view on some aspects of policy, and I heard a range of views, but there are some coalition members that remain very committed to Australia's longstanding policies over generations to reduce tobacco consumption and therefore save lives.
The government remains committed to a comprehensive public health approach to tobacco control. This includes maintaining strong tobacco control measures, supporting smoking cessation initiatives, promoting evidence based approaches—not 'the vibe of the thing'—to reducing smoking prevalence and continuing public education efforts aimed at improving health outcomes and reducing the harms associated with tobacco use.
It is still the leading cause of preventable death in our country. I don't want to see the next generation return to what my grandpa's generation suffered. Frankly, I know the communities you represent, Deputy Speaker, have the highest rates of adult smoking anywhere in our country.
The Northern Territory has by far the highest rates of adult smoking anywhere in the country. Today, 66 Australians will die of a smoking related illness; tomorrow, 66 more Australians will die of a smoking related illness. This government will not surrender the gains which have been hard-won over generations in driving down adult smoking rates.
Finally, some senators also advanced alternative policy proposals concerning tobacco excise, vaping regulation, public awareness initiatives and operational enforcement settings. The government is working with and supporting all jurisdictions to overhaul their laws, scale up enforcement and shut the shops. Frankly, I'll say it again, the big states have been too slow to act.
But I acknowledge action is now happening, which is welcome. Just last week, I released data showing that sales of legal tobacco in Queensland have increased and that the Queensland model, which was built on the pioneering South Australian model of enforcement, is driving people to then call the Quitline. We've correlated that there's a spike in calls to the Quitline when they go out and enforce in a particular region, and that's a good thing.
These laws will make it easier for all jurisdictions, right across the country, to go after any business involved in this trade. It doesn't matter whether they're a tobacconist, a convenience store, a lolly shop, a gelato shop, a servo, a barber, a clothing shop, a restaurant or any retail outlet. Any retail premises that chooses to engage in illegal tobacco trade and support organised crime can be targeted for closure, and they'll lose their business and livelihood under these laws.
We can win this fight against organised crime. It is a disgrace that the coalition has decided to get into bed with One Nation, big tobacco and criminal syndicates to let vapes rip through a new generation of Australians and then make money by taxing them as the market grows, which it will. I'll finish on this point.
I do accept that views differ as to the most appropriate policy settings. The government considers that this bill delivers important and necessary reforms that will strengthen Australia's response to illicit tobacco, better protect the community from organised criminal activity and provide law enforcement agencies with more effective enforcement tools. I commend the bill to the House.
The DEPUTY SPEAKER ( Ms Scrymgour ): The question is that the member for New England's amendment to the member for Kooyong's amendment to the second reading motion be agreed to. A division having been called and the bells having been rung— The DEPUTY SPEAKER: As there are fewer than seven members on the side for the ayes, I declare the question resolved in the negative in accordance with standing order 127.
The names of those members who are in the minority will be recorded in the Votes and Proceedings. The question now is that the member for Kooyong's amendment to the second reading motion be agreed to. Question negatived.
The DEPUTY SPEAKER: The question now is that this bill be now read a second time. Question agreed to. Message from the Governor-General recommending appropriation announced.