Tim Wilson (Goldstein, Liberal Party) Share this | Hansard source

I would like to continue on from the contribution of the member for Fairfax, an excellent contribution no less, to this important discussion around the Customs Amendment (Illicit Tobacco Offences) Bill 2018. The basis of my short remarks is to support the bill and the spirit and the intent in which it seeks to achieve its outcome in the context of existing law, because I do have broader concerns about the operation of the regulatory framework and the way in which we engage with this product—tobacco—and the consequences it has in fuelling the illicit trade.

Illegal tobacco threatens the safety and health of our community and the viability of local business operators, and the measures in this bill will arm customs officers, Border Force agents, with the tools to fight organised crime and their illegal tobacco trade. I don't dispute its objectives, and they're very good ones, and that's the basis upon which I will be supporting this bill. But we also cannot forget part of the reason we are in this situation. It is because of the measures that we have taken to date and what they have done to fuel the illicit trade. I was not in this parliament at the time these matters were considered, but had I been I would have raised my deep reservation around, particularly, some of the ways that we sought to tackle the challenges around illicit tobacco, as well as the incapacity, or the inability, to address some issues that we confront today.

From 2013 to 2016, Australia's smoking rate fell by a dismal 0.6 per cent. This came off the back of a long period of reform to try and reduce the consumption of tobacco. In many cases, I support those measures. As somebody for whom tobacco contributed to the early death of three out of four grandparents, I believe strongly in tackling these issues. But we made a series of questionable judgements in the past. The first is the constant increase in tax rates and excise on tobacco. This makes it a more desirable product because the cost basis of production is becoming increasingly distant from the price of consumption. That gap, or the consumer surplus that grows with the increase in the tax rate, means that it becomes a more desirable product for organised crime, because the margins that can be secured from engaging in the trade are considerable. And that will not change. So long as we keep the excise at the rate that it is we will continue to encourage illegal gangs and those engaging in ill means to engage in the illicit tobacco trade. But we've doubled down on that by not just increasing the tax rate, increasing the consumer surplus and increasing the desirability and attractiveness of this trade by increasing the tax rate; we have also increased the desirability of this product by making it interchangeable.

A couple of parliaments ago this parliament introduced plain packaging legislation in the Commonwealth of Australia. And what was the consequence of plain packaging? It took a product that was already of high value and had a high consumer surplus and said, 'Now it is interchangeable, indistinguishable.' That's the whole point of plain packaging legislation—to take a product and remove its branding so consumers can see no difference, while at the same time increasing and ratcheting up the price. So, its desirability goes up, it's capacity to be engaged in counterfeiting and illicit production increases even more dramatically, as do the benefits of illicit trade. This is the fundamental problem with this approach to dealing with issues around tobacco regulation. You're actually fuelling, or at least increasing the risk of fuelling, the illicit trade, mostly to the benefit of criminal gangs. That's what comes out very clearly in different pieces of research and reports. We know that illicit consumption is up. We know the illicit trade is up. We know that the loss to government revenue continues to increase, year on year, and it's aided and abetted by the measures that have been consistently applied by previous parliaments.

The challenge for us, if we want to cut tobacco consumption—and I do—is to introduce measures that actually help cut consumption, reduce the desirability for criminal gangs to be involved in the trade and to take advantage of the consequences of our legislative arrangements, and look at measures that work. We actually did an entire inquiry, in the Standing Committee on Health, Aged Care and Sport, on the legal accessibility of e-cigarettes and vaporisers and the legalisation of vaping as an alternative to smoking. What the data showed from these reports, looking at international research and the experience of other countries—even when I was in Manchester only recently speaking to health officials—is a very clear and consistent message. People did not think that vaping was necessarily the best measure that they would like to see. They'd rather see people quit, as would I. If they don't quit, particularly those stubborn lifelong smokers, then in the absence of that finding a harm reduction alternative is incredibly important. Vaping fills that critical and important gap. That is so much so that, as I learned when I was in the UK recently and spoke to health officials in Manchester, they now actively promote it as a measure to help reduce people's consumption and behaviour in light of the circumstances. So we put that against the backdrop of what we've been doing in tobacco, which is making it more profitable and more substitutable for criminal gangs, but we haven't then gone on and said that we should support the measures that we need to make sure that we can actually cut smoking rates.

I have to say that I have real concerns about the framework of the approach that many people are taking in this policy space, because it's not actually cutting smoking rates. It is rewarding criminals. It's not helping the consumers. It's also not helping, of course, one of the critical bases on which we have been told we have to support various bits of legislation, which is to increase government revenue to offset the consequences of tobacco consumption. Sadly and tragically, this approach that we have taken, for which we have sometimes been extolled internationally for being a world leader, is being adopted everywhere else. That isn't to say that there isn't a role for tax as part of disincentivising people from consuming tobacco. That's true, and that is a critical part of what we need to do, because there are some people who do have an inelastic approach and do need that incentive. But it would be foolhardy to say that it has not gone to quite incredible extremes in recent years. As I said, when you overlay that with the issues around plain packaging, you see the same consequences. We know that other countries have followed suit and followed us. Despite extolling the virtues of the plans around these policies, the UK, Ireland, France and New Zealand have, frankly, had deeply questionable outcomes, as we have, in the efficacy of these policies.

Of course, when we talk about the efficacy of these policies, yes, we're talking about things like government revenue. That's an impact, but the real impact is on human lives. Sadly, there are too many health sociologists parading themselves as public health officials who would rather keep supporting bad ideas they've come up with and taken ownership of than do the right thing and change the laws to enable people to have a pathway to reduce their consumption and hopefully move towards cessation.

I would hope that this parliament takes note. I would hope that this parliament seeks to consider other alternatives to reduce tobacco consumption in Australia and to improve the livelihoods, the health and the wellbeing of Australians who are caught in the trap and curse of tobacco consumption and nicotine addiction. That is why I am a proud supporter of people being able to access vaporisers and vape legally, not just with vaporisers but also with the capsules. If you want to introduce a policy framework which actually cuts tobacco consumption, that is the pathway in which you do it, on top of constraining and suffocating the criminal gangs who engage in taking advantage of the consequences of the laws we now have on the book. The consequences of the laws are the increase in the price of a product, the increase in the consumer surplus and the increase in the gap between the production and the consumption and the price, which makes it a very profitable industry for those who want ill-gotten gains. The measures we have taken have also made it a substitutable product, which has only exacerbated the already existing problems of that regime.

That's why I support this bill, because ultimately it works to empower and enable those Customs officers to do what they need to do to suffocate that trade. But that trade can be supported in its suffocation by reducing demand from consumers, because people no longer see the advantage of engaging in tobacco consumption and see the advantage of alternatives as a pathway to at least harm minimisation and hopefully cessation. If we do that, we would have a healthier, happier, longer living nation of people, with reduced dependence on nicotine addiction.

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