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

Ryan supported the bill’s enforcement measures but strongly opposed coalition proposals to cut tobacco excise. Ryan argued that reducing taxes would not eliminate the black market, citing international evidence from Canada and Malaysia where low taxes did not prevent illicit trade. Ryan moved a second reading amendment to reject the bill’s passage in its current form, aiming to signal opposition to excise cuts, which she claimed were driven by tobacco industry lobbying rather than crime-fighting logic.

Berry argued the bill protected public health and community safety by targeting organised crime syndicates. Berry highlighted the health risks of vaping and the environmental impact of disposable vapes, rejecting coalition calls to legalise nicotine pouches. Berry noted that enforcement efforts had already seized over 2,300 tonnes of illicit tobacco and 13.2 million vaping devices. Berry maintained that cutting excise would reward criminals and undermine decades of tobacco control progress.

Aldred argued the bill failed to address the root cause of the illicit market: the price gap between legal and illegal tobacco. Aldred cited academic criticism that enforcement-only approaches were ineffective and noted that most convicted offenders received non-custodial sentences. Aldred claimed the bill reversed the onus of proof in criminal matters without tackling the economic incentives driving the trade. Aldred urged the government to reduce excise to allow legitimate retailers to compete.

Clutterham detailed the eight measures in the bill, including new offences, streamlined seizure processes, and strengthened proceeds-of-crime powers. Clutterham explained that the new evidentiary presumptions allowed authorities to act on observable indicators like non-compliant packaging or prices below excise and GST values. Clutterham argued that reducing excise to match illicit prices would be a dereliction of government duty to minimise harm and protect public health.

Wallace stated the coalition would not oppose the bill but argued it could not fix the economic conditions sustaining the illicit market. Wallace cited estimates that illicit tobacco evasion cost the government between $7.7 billion and $11.8 billion in 2024-25. Wallace reiterated the coalition’s proposal for an 80 per cent excise cut combined with increased law enforcement funding. Wallace argued that without reducing the profit margin, criminals would continue to absorb enforcement costs as part of their business model.