Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Parliamentary Joint Committee on Law Enforcement, I present the committee's report titled Illicit tobacco.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—Firstly, I declare an interest when it comes to tobacco. I am a fanatical antismoker. I cannot stand the smell of tobacco. I'm sure my good friend the member for Macarthur over there would congratulate me on that point.

The point of this inquiry is that we have a problem. We've taken a government policy, which has been a bipartisan policy, of increasing taxes and increasing excise on tobacco with the idea that, if we drive the price up, we will prevent people from smoking. But, as history has shown, when government steps in and increases excises and taxes, you create an opportunity and you incentivise a black market. That is exactly what we have seen happen here in Australia. We've seen that illicit tobacco consumption, as measured by the KPMG study—and I would say that the methodology of that study is sound—has increased from 12.5 per cent of the total market in 2012 to 20.7 per cent in 2019. We've seen a very major increase in Australian Border Force detections. As a signal of how prevalent cigarette smoking and illegal tobacco are in this country, during the inquiry we were actually mailed some samples. Illicit and illegal tobacco came through the mail into the federal parliament. So products like this—illicit, illegal products—are so prevalent in the country at the moment that they can actually be put in the mail, arrive in Parliament House and then be delivered to a member of parliament's office.

The main premise of the committee's inquiry was that we are very concerned about this increase in illegal activity, and we are concerned that, as was noted by the 2019 KPMG study, a fall in domestic tobacco sales has actually been offset by an increase in illicit tobacco, resulting in a small increase in overall tobacco consumption from 2018-19. Therefore, the policy that we've adopted to drive the price up has actually allowed more illicit tobacco onto the market at a cheaper price, and it is having the perverse, reverse, opposite effect to what we want. The committee believes that what we need to do as a parliament, in a bipartisan manner, is improve the results to stamp out illicit tobacco by making it clear that illicit tobacco enforcement is a law enforcement issue, rather than a health matter. That is what the recommendations of the report go to.

I thank the deputy chair of the committee, who is in the chamber at the moment. I also thank the secretariat, all the other members of the committee and the over 180 members of the public who made submissions.

In particular, we need to protect the small businesses of our country that are operating in a lawful manner, that are obeying the law and that are currently having their businesses undermined by this illicit and illegal market. Although we've done some good things so far, this parliament needs to recognise this as a law enforcement issue and give our law enforcement authorities greater ability, greater strength and more powers if we are going to drive down the rate of smoking in this country. I thank the House.