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

Wood supported the bill, recalling previous government efforts to tackle illegal tobacco through import permits and border force powers. Wood argued that the problem had grown significantly, with contraband found in a high proportion of mail items. Wood criticised the state Labor government in Victoria for failing to address the issue and called for a penalty regime that facilitated easier issuance of penalties by law enforcement. Wood maintained that while the bill was supported, something needed to change regarding excise to stop criminals from profiting.

O'Brien supported the bill's objectives to strengthen enforcement and seize criminal profits but argued it failed to address the demand side driven by excessive tobacco excise. O'Brien noted that illicit tobacco consumption had risen from 10 per cent in 2017 to 80 per cent in 2025, attributing this to price disparities between legal and illegal products. O'Brien outlined the coalition's plan to cut tobacco excise by 80 per cent and establish a regulated market for nicotine pouches and vapes. O'Brien also proposed a $200 million law enforcement surge and a $60 million education campaign to disrupt criminal networks.

Gee characterised the situation as a major policy failure, arguing that high excise rates had created a thriving market for organised crime. Gee called for slashing tobacco excise, a position he claimed had been adopted by other parties, and highlighted the significant loss of tax revenue estimated between $7.7 billion and $11 billion. Gee pointed to the violence associated with the illicit trade, including over 200 firebombings since 2023, and criticised the government's enforcement efforts as ineffective. Gee urged immediate action to overhaul taxes and strengthen enforcement to support legitimate businesses and community safety.

Steggall supported the bill, disagreeing with the coalition's argument that excise reductions would solve the crisis. Steggall noted that excise increases had occurred under both major parties and cited evidence from Canada showing that tax cuts led to increased smoking rates. Steggall called for stronger enforcement, public health education, and coordinated state and federal action, including stricter controls on retail locations near schools. Steggall supported the second reading amendment moved by Monique Ryan and urged the government to ban donations from tobacco and vaping industries.

Spender supported the bill but expressed frustration with the lack of progress in addressing the illicit tobacco problem. Spender argued that while she did not believe excise cuts would undercut criminals, the government should at least freeze excise rates to stop widening the price gap. Spender called for tighter retail licensing and a reduction in the number of tobacconists, noting there were more tobacco outlets than fast-food restaurants. Spender urged the government to provide clear success measures and timelines for reviewing its approach, including potential excise adjustments.