Llew O'Brien (Wide Bay, National Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that the supply, distribution and sale of illicit tobacco and vapes:

(a) is a significant source of revenue for organised crime and criminal gangs connected with the production of illicit drugs, illegal prostitution, supply of illegal firearms and other unlawful activities that cause harm to Australians;

(b) deprives the Australian people of approximately $400 million each year that would be directed toward the national health system;

(c) deprives lawful retailers of tobacco products of business; and

(d) endangers lives, properties and communities, including the owners and staff of legitimate grocery stores that sell legal tobacco and vapes; and

(2) calls on the Government to:

(a) properly empower, resource and fund the Illicit Tobacco Taskforce to disrupt the supply and distribution of illicit tobacco and vapes; and

(b) legislate tough penalties to deter both the demand and supply of illicit tobacco and vapes.

Every time you buy illegal cigarettes you're supporting organised crime. When generally law-abiding smokers quit legal tobacco to purchase from the black market they believe the only victim is a greedy federal or state government missing out on $4.2 billion of tobacco excise and $400 million in GST, but illicit tobacco is often the cashflow arm for sophisticated criminal syndicates dealing in the worst of the black market, including human trafficking, sex slavery and drugs. When authorities seize illicit cigarettes they are often in the company of drugs including ice, crack and cocaine or illegal guns and stolen vehicles. Illicit tobacco translates to more powerful international Middle Eastern gangs and more grief on the streets. In April a Gympie shop selling illicit tobacco was firebombed. The fire spread and damaged neighbouring businesses. So far this year we've recorded at least 29 firebombings on tobacco shops and daylight gang shootings in our cities as criminal gangs are acting with, it appears, impunity.

To better understand the nature of the illicit tobacco market the former coalition government held an inquiry through the Parliamentary Joint Committee on Law Enforcement:

The ABF informed the committee that organised criminal networks involved in illicit tobacco operate similarly to those involved in the importation of other contraband … such as narcotics. These criminal organisations:

… have access to a global network of … smuggling facilitators who … seek to infiltrate and exploit … members of the international supply chain—

using established smuggling routes—

… they look … they behave … very similar to those … involved in the importation of drugs, and … may be one and the same.

Illicit tobacco is now a dangerous law-and-order issue in our country. At estimates in May 2023 Australian Border Force commissioner Michael Outram said on a good day they could detect only 20 per cent of the illegal drugs imported into the country. The ATO's tax gap webpage acknowledges the boom of illicit tobacco even as authorities seize the highest amounts ever recorded. This is not an overnight crisis; it has grown as continual excise increases have pushed smokers to the black market because they can no longer afford legal, regulated tobacco products. This week, a tobacco bill before the parliament will ban certain tobacco products from legal retailers altogether, making them exclusive to the black market. This legislation is more of the same. It will put graphic warnings on individual legal cigarettes, ban legal menthols and limit advertising of legal vapes, all while the illegal trade flourishes and sells to underage children and teens.

If the Albanese government believes that health warnings on individual cigarettes will lower smoking rates, then why isn't the government addressing contraband tobacco? Without investment in policing at the Australian border and at the retail level, this legislation and further excise increases will supercharge the illicit tobacco market, making it the dominant supplier of tobacco products in Australia. Illicit tobacco consumption is going gangbusters, with 2.6 million kilograms smoked a year, worth about $4.2 billion. One in four cigarettes can now be linked to organised crime. On the current trend, criminal gangs will run 40 per cent of the Australian tobacco market by the next election, when two in five smokes will be untaxed and sold in non-compliant packaging. Legal domestic sales volumes have fallen from 14.3 million kilograms in 2012 to 8.5 million kilograms in 2022, yet smoking rates are not plummeting in the same way.

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

Is the motion seconded?

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Michelle Ananda-Rajah (Higgins, Australian Labor Party) Share this | Link to this | Hansard source

ANANDA-RAJAH () (): Nicotine is a highly addictive substance—in fact, it is a drug—and I've seen the effects of nicotine addiction up close and personal in my medical practice. It results in accelerated atherosclerosis, which pretty much affects every single blood vessel in your body, large, small or even microscopic. The effects include stroke, heart attack and peripheral vascular disease, which itself leads to serial amputations. It often starts with a small digit, maybe a toe, and then what happens is usually what we describe in the medical profession—informally—as salami surgery. The toe would go, then you would end up with a below-knee amputation, and so on and so forth, with multiple debridements in between. The problem with nicotine addiction is that it is a threat multiplier. In combination with diabetes, it is a very, very potent amplifier of accelerated atherosclerosis and inflammation, and the effects are disastrous.

As a government, we are taking this problem very seriously in an attempt to disrupt tobacco networks and the sale of illicit tobacco, as well as vapes, in order to build upon a proud Labor tradition of reducing smoking rates in this country. We know that tobacco is a leading cause of preventable disease burden in Australia, accounting for 8.6 per cent of the total burden of disease back in 2018. The numbers of daily smokers aged 14 years and above in 2019 were 12 per cent in men and nearly 10 per cent in women. But there are some bright spots. There has been a decline in active smokers over 20 or so years. We also know there has been an increase in the proportion of adults who never take up smoking. In 1991, that number was 49 per cent. In 2019, that number is now 63 per cent. These data come from the AIHW. As of 2017, 82 per cent of secondary school students had never tried smoking, compared to 77 per cent in 2011.

But we have to remain vigilant. Why? Because we have seen the scourge and ingress of vapes into a much younger generation—children. These things are disguised as anything but cigarettes. They look like batteries, like highlighter pens. They have enticing colours and even more enticing names and, obviously, a range of flavours. The Albanese government is intent on banning these items, because they are ever-prevalent and they are popping up like weeds. We do know that in 2019 almost two in five current smokers aged 14 or over have used e-cigarettes. These were originally sold as being a means to cease smoking, to break the habit, but what has happened is they have become gateway drugs, leading to greater levels of nicotine addiction in people in later in life.

With respect to the illicit trade of tobacco, this is a significant problem and it is underpinned by sophisticated criminal syndicates. Organised crime networks are increasingly resorting to acts of violence, including arson, threats and result—and why? Because the amount of money involved in this trade is huge. Last year, Border Force made over 120,000 detections of illicit tobacco, seizing over 1.8 billion cigarettes and over 867 tonnes of looseleaf tobacco. This tobacco is grown in regional areas, often in communities that know it is happening, and it takes a great deal of collaboration and intelligence on the ground and in collaboration both interstate and with the Commonwealth to disrupt these networks. For example, between April and May this year, the taskforce looking into this in combination with the ATO and NSW police, raided three illegal tobacco plantations across New South Wales. This activity resulted in the seizure of more than 264 tonnes of illicit tobacco. Similarly, in August this year, there was another sophisticated operation to disrupt a group in South-East Queensland and northern New South Wales, involving the AFP, New South Wales and Queensland police, and the TGA.

In order for this sort of work to continue, we have to maintain good relationships with our state counterparts and ensure we get multijurisdictional collaboration.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

When the member for Wide Bay asked if I would second this motion and showed it to me, I was more than happy to do that for a few reasons. One is I have high regard for him as a person of integrity both in this place and as someone who wore a police uniform. He put his own safety on the line and knows a lot about this area, and sophisticated and unsophisticated criminal networks. I was also happy to support this because, like all of us, there are moments in our lives, especially when we are younger when we experience the first death of a loved one. For me, that was my grandmother, who died in her early 60s from smoking-related illnesses. I saw that the heartbreak on my family when she was robbed of another 20 years of life. In the late 1980s, that was quite common—a lot of people had relatives who lost decades of their lives because of the harm of smoking.

One of the things we see in many different areas of public policy is well-intended legislation that has unintended consequences. This is certainly one of those. It is easy to think that taxes and advertising will solve every problem. If that were the case, we wouldn't have many problems here to solve, because we're very good at taxing things here and there is a lot of money to run advertising campaigns. They are effective to a point, but when we squeeze too much on one side of an equation and ignore the other, we are not solving the problem—we're just making ourselves feel good. So the consequences of just focusing on the tax side of the equation, especially in a cost-of-living crisis, is that many people on low income—and most people who smoke are—will go and buy their product somewhere that it's cheaper. And where they are buying them cheaper is in the illicit tobacco trade.

The member for Higgins has a distinguished career as a professional doctor, and has quite rightly pointed out the trend of statistics over the last few decades, but sometimes you get a glimpse of a change in that in the short term, and we are hearing that from other medical professionals. Here is an article from 11 September this year, titled 'Surgeon unmasks 'open secret' making underworld fortunes'. Cardiovascular surgeon John Crozier has devoted his whole life to assisting people who have been affected by the tobacco trade, and when he saw an increase in people coming to his hospital, he started to ask why: why is this increase happening so suddenly? And he's finding that they're buying tobacco from illicit areas across Sydney, and we're seeing across Melbourne. In this particular article that I've got here, there was a quote that really struck me. It said: 'The trade is so good that the first faction in it immediately attempted to monopolise distribution by stamping tobacconists with an 'earn or burn' offer. That is, 'Sell our illicit tobacco, which has none of the shocking warnings or none of the taxes that come with it, or we will torch your shop.' We know that that's happening because we are seeing, particularly in Melbourne and Sydney, illicit tobacco shops being burnt down. So, in addition to the problem that this is creating for people's health, it is creating gang wars through our cities.

Of course we should focus on taxing this. In part that offsets the health budget consequences. It is so important that we look at the enforcement end of this. Criminal organisations are rational. They will look at the enforcement in hard drugs like cocaine and other areas and say, 'Why would I take that risk when I can make us as much money as this and I can put the risk for me onto someone who is probably in fear of being deported, who is easy to influence and then are told they will be subject to violence or have their store burnt down if they don't do it?' I am also hearing from many small grocery operators who are doing the right thing, those who run IGA stores who do sell this and it is a big part of their income. They are seeing that drop off. People doing the right thing are being punished. People who are doing the wrong thing are getting away with it. At the moment, we are letting local councils enforce that. I have a lot of respect for local councils, but dealing with violent, well organised criminal organisations is not their job. We need to make sure that we resource the group that can do it.

Dan Repacholi (Hunter, Australian Labor Party) Share this | Link to this | Hansard source

Law enforcement agencies worldwide are confronting a growing challenge in the battle against organised crime. These criminal networks are resorting to increasingly violent tactics, such as arson, threats and assault, to dominate the illicit tobacco market and safeguard their profits in this country. Our border agency has made significant strides in countering this threat. Last year the Australian Border Force recorded over 120,000 detections of illicit tobacco, resulting in seizure of more than 1.77 billion cigarettes and over 867 tonnes of looseleaf tobacco. The ABF is expecting to surpass these figures this year.

It's important to acknowledge that border enforcement alone cannot fully eliminate this complex issue. Our government has taken a proactive approach to addressing this problem comprehensively by collaborating with justice, law enforcement, health portfolios and state and territory governments. Our federal agencies are at the forefront of efforts to curb illicit tobacco, targeting organised crime with a focus on disrupting priority illicit tobacco networks. The Illicit Tobacco Taskforce, comprising various agencies like the ABF, the Australian Taxation Office, the Department of Home Affairs, AUSTRAC, ACIC and the CDPP, channels its resources towards dismantling the criminal syndicates with the most significant impact on Australia's illicit tobacco market. The ABF is actively engaging with state and territory governments to foster greater cooperation in addressing all aspects of illicit tobacco, from offshore activities to importation to production and domestic manufacturing and sales.

Operational agencies have emphasised that raiding illicit tobacconists at local level won't solve these issues, as these organised crime groups are highly adaptive. Therefore the Illicit Tobacco Taskforce is collaborating with state and territory agencies across Australia to tackle the root problem and disrupt the criminal networks profiting from it. These efforts aim to make a more lasting impact against these groups.

Collaboration with the state and territory agencies has yielded promising results, with raids resulting in the seizure of more than 264 tonnes of illicit tobacco. By removing the tobacco crops, we have cut off the profits that could flow back to these organised crime networks. Additionally, during Operation Harvest Home, police seized over $1.4 million in cash, more than 2.8 million cigarettes, over 380 kilos of loose-leaf tobacco, and vaping products worth an estimated $5.3 million. The joint Operation Aberdeen, which involved various agencies, led to the seizure of $835,000 in cash, over eight million cigarettes, 3.74 tonnes of loose-leaf tobacco and 60,000 vapes, with an approximate street value of $1.8 million.

Furthermore, the Illicit Tobacco Taskforce, in collaboration with the AFP, has been executing search warrants in New South Wales against illicit tobacco organised crime networks in an ongoing operation. In other states, the taskforce works closely with the joint organised crime taskforce to address and disrupt Middle Eastern organised crime syndicates linked to illicit tobacco. These operations are part of a multifaceted approach to disrupt these organised crime networks and prevent their profits from being channelled into other illegal activities.

Australia has adopted some of the world's most robust measures to combat the importation and trade of illicit tobacco. The ABF leads the government's efforts in this regard, underpinned by a package of illicit tobacco reforms implemented on 1 July 2019. These reforms include the regulation of tobacco as a prohibited import, the establishment of a tobacco import regime, the strengthening of illicit tobacco offences and penalties, the collection of tobacco duty and taxes at the border and the establishment of the Illicit Tobacco Taskforce. These measures have significantly enhanced the ABF's ability to detect, deter and disrupt illegal tobacco industry. Penalties for illicit tobacco offences include imprisonment of up to 10 years, monetary penalties up to five times the duty evaded, or both.

Pat Conaghan (Cowper, National Party, Shadow Assistant Minister for Social Services) Share this | Link to this | Hansard source

I thank the member for Wide Bay for putting forward this motion and opening up the discussion about illegal cigarettes and vapes to more than what mums, dads, parents and teachers complain about. What it really comes down to is organised crime groups controlling this area. This is not new. Thirty years ago, when I was a detective, we were prosecuting people who were importing container loads of illegal cigarettes through Norfolk Island and Lord Howe Island.

The community needs to understand that this is more than just kids vaping at school or kids smoking illegal tobacco. These organised crime groups use this funding, use the money they get through the illicit tobacco trade and illicit vaping trade, to fund much more sinister tasks: sex slavery, cocaine trade and amphetamine trade—those things that make parents and mums and dads fear for their children. This is where they get their funding from. This is why it is so important that we have this conversation about proper policy to prevent the continuation of the illicit trade in both vapes and illegal cigarettes.

We can't expect our Australian Border Force, our AFP and our police to be able to police their way out of this. I'm specifically speaking about vapes now. Outlawing vapes will not work. It'll simply push that into the black market. I'll accept the coalition's policy from back in 2001, where you had to have a prescription to be able to use a vape, has failed. There are over 1.1 million users of vapes in the country now and only 10 per cent of them have a prescription. So what you are effectively seeing across Australia right now are shopkeepers who sell vapes acting illegally and people who use vapes breaking the law. If you do not have a prescription for an e-cigarette or a vape, you are effectively breaking the law. The reason that these organised crime groups are doing this is that it is low risk and high reward. There are effectively no penalties for selling illegal vapes in these pop-up shops which we have seen flow into our communities.

I have sat down with legitimate tobacconists who have told me they are losing millions of dollars a year to these illegal pop-up shops. NSW Health has control over that, not the police. NSW Health has to go along and say, 'You are actually in contravention of New South Wales health regulations.' They shut them down for six or eight hours and, within that time, they have popped up again because they have a stash and a store of illegal vapes.

What we need to do is regulate this industry. I don't like smoking. I don't like e-cigarettes. But they are here to stay. The only way we can control this is by regulating the industry exactly the same way that we have regulated the cigarette industry—plain packaging, behind the counter and restricted to people over 16. It should be exactly the same way with excise. That would take that control from the organised crime groups. We would take that away from them. Then we can use Border Force to regulate those legitimate ones coming through and continue to prosecute those people who flout the law. As part of that, we need to increase the penalties for illegal e-cigarettes. We need to say to people, 'If you are going down this road, you are part of a criminal organisation and we will not stand for it.'

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

I would first of all like to thank the member for Wide Bay for moving this motion. It's something that has been very close to my heart for many, many years, having lost my uncle to lung cancer, an aunt to chronic emphysema and many other relatives to diseases caused by smoking. Illicit tobacco is both a cancer on our society and a leading cause of cancer in our communities. I am greatly concerned about the impact of the legal tobacco industry. Australia, as we know, has led the world in tobacco harm reduction, but our smoking rates are stubbornly around 10, 11 or 12 per cent or even higher in some communities, particularly Indigenous communities.

We must do more to get those rates down because they have a significant impact both in terms of hours of care and in terms of cost to our health system not just from lung cancer but from a variety of other cancers, such as bowel cancer, prostate cancer and even breast cancer. Tobacco smoking increases the risk significantly for those cancers. There are also a number of people with chronic lung disease, emphysema and chronic obstructive airways disease that are putting huge pressure on our public hospital system. We must get our smoking rates down.

Of course, illicit tobacco is making this problem much worse. It causes significant harm in our communities. It reduces the cost of smoking because illicit tobacco is often sold much cheaper than tobacco that is regulated. This is one of the reasons our chronically stubborn smoking rates have been hard to get down. It is causing significant harm in our children and adolescents, especially those in lower socioeconomic communities and those who have been targeted by not only illicit tobacco but now illicit vaping products.

Regardless of all these things, our government is taking action on both the legal and the illicit tobacco industry. Illicit tobacco is a major issue facing our nation virtually wherever you go in metropolitan, rural and regional areas. It has significant law and order implications, particularly in terms of control, and of course organised crime is heavily involved in the procurement and sale of illicit tobacco. It goes straight into the hands of organised crime, and they, of course, have no compunction in selling it to children. Despite the valiant efforts of the Illicit Tobacco Taskforce, more needs to be done. We need to make sure that we adequately police illicit tobacco, that imports are confiscated and that the money organised crime is making from these products is taken by the government as well.

We also must be much stronger in policing our vaping products. We've already seen significant numbers of schools, including primary schools in my electorate of Macarthur, having to confiscate vaping products as well as illicit tobacco. There are joint efforts between the Illicit Tobacco Taskforce, the ATO and police in my state of New South Wales. Operation Junglevine2 involved raids on illegal tobacco plantations across New South Wales and the confiscation of 264 tonnes of illicit tobacco. By removing this tobacco from the market we are helping reduce our smoking rates and improving our health system at the same time.

Recently the ABF supported joint Operation Aberdeen—which involved the Queensland Crime and Corruption Commission, Queensland police, the ATO, Queensland Health and the TGA—in confiscating almost $1 million in cash, eight million cigarettes and 3.74 tonnes of loose-leaf tobacco and 60,000 vapes. It's a huge industry. It's causing huge harm. Our government is working to police and to control illicit tobacco and vapes. We are doing our best, but organised crime is very clever. Organised crime requires significant policing, and our government is doing their best to make sure that we keep this under control.

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

There being no further speakers, the debate is adjourned and the resumption of the debate will remain an order of the day for the next sitting.