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

Mr HASTIE (Canning) (17:33): by leave—I move opposition amendments (1) to (3) together: (1) Title, page 1 (line 2), after "2002,", insert "and to reduce customs and excise duties on tobacco,". (2) Clause 2, page 2 (table item 4, column 1), omit "Schedule 6", substitute "Schedules 6 and 7". (3) Page 50 (after line 17), at the end of the Bill, add: Schedule 7 — Reduction of tobacco customs and excise duties Customs Tariff Act 1995 1 After section 19ACA Insert: 19ACD Reduction of tobacco duty rates (1) Despite anything else in this Act, each tobacco duty rate is taken, on the day (the commencement day) on which this section commences, to be replaced with a rate that is 20% of the tobacco duty rate on the day before the commencement day.

Treatment of indexation (2) To avoid doubt: (a) in working out, for the purposes of subsection (1), a particular tobacco duty rate on the day before the commencement day, take into account any replacement of that rate that occurs before the commencement day under section 19AB; and (b) for the purposes of applying section 19AB in relation to the first indexation day that occurs after the commencement day, subsection (1) of this section applies when working out the tobacco duty rate on the day before that indexation day.

(3) If the commencement day would, apart from this subsection, be an indexation day under section 19AB then, for the purposes of applying section 19AB, the commencement day is not to be treated as an indexation day. Effect on other rates for tobacco (4) To avoid doubt, subsection (1) of this section applies for the purposes of determining an applicable rate under section 19ACA.

Which goods? (5) This section applies in relation to goods that are entered for home consumption on or after the commencement day. Definitions (6) In this section: commencement day has the meaning given by subsection (1). tobacco duty rate means a rate of duty that is a tobacco duty rate for the purposes of section 19AB (see section 19AC).

Excise Tariff Act 1921 2 After section 6AAC Insert: 6AAD Reduction of duties of excise on tobacco (1) Despite anything else in this Act, the rate of duty applicable under subitem 5.1 of the Schedule is taken, on the day (the commencement day) on which this section commences, to be replaced with a rate that is 20% of the rate of duty applicable under that item on the day before the commencement day.

Treatment of indexation (2) To avoid doubt: (a) in working out, for the purposes of subsection (1), the rate of duty applicable under subitem 5.1 of the Schedule on the day before the commencement day, take into account any replacement of that rate that occurs before the commencement day under section 6AA of this Act; and (b) for the purposes of applying section 6AA of this Act in relation the first indexation day that occurs after the commencement day, subsection (1) of this section applies when working out the tobacco duty rate (within the meaning of section 6AA) on the day before that indexation day.

(3) If the commencement day would, apart from this subsection, be an indexation day under section 6AA then, for the purposes of applying section 6AA in relation subitem 5.1 of the Schedule, the commencement day is not to be treated as an indexation day. Effect on other rates for tobacco (4) To avoid doubt, subsection (1) of this section applies when determining the rate of duty applicable under subitem 5.1 of the Schedule for the purposes of applying sections 6AAB and 6AAC.

Which goods? (5) This section applies in relation to goods that are entered for home consumption on or after the commencement day. (6) In this section: commencement day has the meaning given by subsection (1).

Australia's tobacco wars have become a national organised crime crisis. We've seen hundreds of firebombings, even murders, in relation to the trade. The government estimates that organised crime groups are making between $4.1 billion and $6.9 billion in profit from illicit tobacco.

In 2017 illicit tobacco accounted for around 10 per cent of consumption. By 2025 the Australian Bureau of Statistics estimated that the illicit share was around 80 per cent. There need to be stronger measures that will potentially give our border and law enforcement agencies more-effective powers to combat this scourge, and the coalition's position on illicit tobacco could not be clearer.

We support stronger legislation, better laws and tighter border controls. For that reason, we won't oppose this bill. But it does not go far enough.

We need a broader response, and that's what the coalition is proposing through our amendments. We have put forward a comprehensive commonsense plan to crush organised crime gangs that are benefiting in the order of billions of dollars from the illicit tobacco industry. Our amendments would give legislative effect to some of the key components of the coalition's policy package.

This includes our proposal for an 80 per cent reduction in the tobacco excise. An 80 per cent excise cut would see the price gap dramatically narrowed, shifting sales from the black market back into legal businesses. It would see the price of a standard pack of 20 cigarettes reduced from $30 to $6, reducing the price advantage enjoyed on the black market.

Currently a legal packet of cigarettes costs around $50, with more than $30 of that coming from the tobacco excise. Meanwhile, illegal packets sell for just $15 to $20. The objective is simple: remove the huge price gap that has made Australia one of the most lucrative markets for illicit tobacco in the world.

Our plan and these amendments would make it harder for criminals to undercut legal retailers. The Parliamentary Budget Office estimates that an 80 per cent excise cut is sufficient to bring legal and illegal prices into alignment, making it difficult for the illicit market to compete. This would be reviewed after two years to ensure that the illegal market cannot rebuild.

We have also proposed necessary legislative changes to establish a regulated market for nicotine vapes and nicotine pouches while maintaining strong protections for children. Under the coalition's plan, vapes and nicotine pouches will be legalised, regulated and taxed. This will replace Labor's failed pharmacy-only vape model and total ban on nicotine pouches.

Of course, not every component of our policy can be implemented through amendments to the bill. The coalition will also introduce a $200 million law enforcement surge and a $60 million public campaign educating Australians about the risks of tobacco and smoking. And Deputy Speaker Freelander, I know you're a doctor yourself, and you know how bad smoking is, and I want to make very clear that the coalition encourages all Australians not to smoke.

But we need to smash the illicit tobacco trade, and that's what our amendments will do. These are administrative and funding measures. We live in a world where, regardless of the risks, people are still going to smoke.

But, where we have the opportunity to address the settings that have seen the rise in illicit tobacco, we should do so. Our approach is not enforcement instead of prevention, regulation or education. It is an effort to bring those elements together.

There is a clear difference between the coalition and the other side of the House when it comes to illicit tobacco. Under the government, we are seeing more illicit tobacco, more organised crime and more Australians purchasing illegal products. The coalition wants to crush organised criminal gangs by reimposing and enforcing the law and breaking the model used to sell illicit tobacco.

That's what our plan will do, and that's what these amendments set out to achieve.