Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026; Consideration in Detail

Opened the debate

Hastie moved three amendments to insert a schedule reducing tobacco customs and excise duties by 80 per cent. Hastie argued that the illicit tobacco trade had become a major organised crime issue, with illegal products accounting for an estimated 80 per cent of consumption by 2025. Hastie contended that the proposed duty cut would narrow the price gap between legal and illegal cigarettes, making it difficult for criminals to compete. Hastie also proposed establishing a regulated market for nicotine vapes and pouches, replacing the current ban, while maintaining protections for children. Hastie stated that the coalition supported stronger border controls but believed the bill did not go far enough without these economic measures.

Government response

Hill opposed the amendments, arguing that reducing excise would not stop organised crime because these syndicates are commodity agnostic and operate globally. Hill highlighted that the government was investing in border enforcement and providing $98 million to states and territories to shut down illicit retailers. Hill criticised the proposal to legalise vapes, stating that adult smoking rates had already fallen to record lows and that legalising vapes would encourage youth uptake. Hill asserted that the government would not surrender public health gains or engage in a bidding war with criminal groups. Hill maintained that the government's approach focused on dismantling criminal networks rather than lowering taxes.