Nicola Roxon (Gellibrand, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Gillard government is proud of its world-leading action to combat smoking.

And as part of the government's package of measures to reduce the use and influence of tobacco in Australia, I am pleased to introduce the Customs Amendment (Smuggled Tobacco) Bill. This bill amends the Customs Act 1901 to create new offences for smuggling tobacco products and for conveying or possessing smuggled tobacco products.

The bill also strengthens the penalties applicable to the illegal importation of tobacco by adding a maximum penalty of ten years imprisonment to the existing financial penalties.

I announced the government's intention to create these new offences on World No Tobacco Day last month. They are yet another step by this government towards combating smoking on all fronts. Tobacco is not like any other legal product. When used as intended, it kills people. Illegal tobacco also kills people and the smuggling trade avoids taxes and has the potential to help fund other criminal activity.

Australia recognised the malign influence of cigarettes early and has made significant progress in reducing the smoking rate. Over the years Australia has prohibited advertising, removed sponsorships, restricted point-of-sale displays, and outlawed smoking in restaurants and many public places.

Thanks to these efforts, the proportion of Australians aged 14 years and over who smoke each day has fallen from 30 per cent in 1988 to 15 per cent today—one of the lowest in the world.

Despite Australia's success in reducing smoking rates over recent decades, tobacco remains one of the leading causes of preventable death and disease among Australians, killing over 15,000 Australians each year and costing the community over $30 billion.

About three million Australians continue to smoke every day—so it is incumbent on government to do all it can to stamp smoking out.

That is why the Gillard government has taken the world-first step in mandating that all cigarettes and other tobacco products be sold in plain, drab packs from 1 December this year.

The government believes that all children have the right to grow up healthy and free from addiction, without becoming the victims of a very calculated marketing campaign to hook a new generation of smokers.

Our government also increased taxation on tobacco by 25 per cent, which saw an immediate fall in the amount of tobacco sold.

We have introduced legislation to ban tobacco marketing on the internet; and

We have put nicotine replacement therapies on our Pharmaceutical Benefits Scheme—meaning these are cheaper for Australians to buy, particularly seniors and low-income earners.

And just in our last budget we have massively reduced duty free allowance—down to just 50 cigarettes (from 250).

But there is more we can do to continue that fight, such as taking action to ensure all tobacco consumed in this country is subject to those mandated health pricing and packaging rules.

Illegal tobacco importations typically occur when an importer attempts to evade the duty payable on these imports. Given the high duty payable on tobacco, this generally occurs by misdeclaring the goods to the Australian Customs and Border Protection Service as non-tobacco products with a lower duty liability.

To date tobacco smuggling has not represented a major threat in Australia and Customs have been successful in intercepting hauls of illicit tobacco heading for Australia.

During 2010-11, Customs made 55 seizures of smuggled tobacco products in sea cargo, consisting of 82 million cigarettes and representing a potential revenue evasion of $135 million plus GST. This is a large number, but should be seen in context: Australians smoke around 22 billion cigarettes a year.

We are keen, however, to ensure that when Customs do intercept illicit tobacco, there are significant penalties in place to deal with those responsible.

The penalties must provide a strong deterrent to criminals involved in this activity—as well as demonstrate the seriousness with which the government views such frauds against the Commonwealth, and harm against the community.

Currently smuggled tobacco is usually prosecuted under a general smuggling provision, with penalties ranging from two to five times the amount of duty evaded.

However, these pecuniary penalties for tobacco smuggling are not necessarily an effective deterrent, as many penalties currently imposed for tobacco smuggling are simply not paid.

The new offences in this bill clarify the law by creating specific offences in relation to tobacco smuggling. The bill creates an offence where a person imports tobacco with the intention of defrauding the revenue. It also creates an offence where a person conveys or possesses tobacco products which the person knows were imported with the intent to defraud the revenue.

A pecuniary penalty of up to five times the duty evaded will apply for both these offences.

In addition, the new offences attract a substantial maximum term of 10 years' imprisonment. A term of imprisonment is not currently available as a penalty for tobacco smuggling under the Customs Act and these new penalties will send a clear message to smugglers that they risk spending significant time in jail by bringing illegal tobacco into this country.

Tobacco, of all types, can kill its users. Australia has regulated this dangerous product very tightly—and these steps strengthen our arm if smugglers try to get around those regulations and try to avoid the payment of taxes.

The introduction of this bill and the offences it creates reinforces my commitment, this government's commitment, to fight smoking on all fronts.

I commend the bill to the House.

Debate adjourned