Barnaby Joyce (New England, National Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I rise because, although we support these bills, there are a few things that I think we have to be aware of in this parliament. You can't keep putting up the tax on cigarettes and not believe that you're going to get a movement from legal, regulated cigarettes to unregulated cigarettes, and that's precisely what is happening. Currently, 95 per cent of vapes are illegal and about 30 per cent of tobacco is illegal. You get to a point where there's nearly no elasticity of demand determined by price. All that happens is that you have to acknowledge there is a market out there, an illegal market. The reason I rise to speak on this matter is that I live in the areas where you see it.

In this building we take this quasi-virtuous position of saying how evil cigarettes are, but we're quite happy to collect money from them. I believe there's an extra $3.3 billion in this. Let's be completely honest: it's $3.3 billion from killing people—that's what you're getting it for. If you believe it's not correct, don't take the money. Don't touch it, but you do touch it. Both sides touch it; I know that.

These bills around about increasing the tax on roll-your-owns. Maybe you don't see them as much in city areas, but in country areas you most definitely do. People are poorer, so they roll their own cigarettes. When you jack up the tax, they don't stop smoking; they just go and buy chop-chop, which is abundant. If you can buy dope within about half an hour of arriving in any town, you can buy chop-chop; make no mistake about it. You buy it from the same vendor.

Once upon a time, in the western suburbs of Sydney, people who were bringing this into the country would be driving around in flash cars; now they have Bentleys and Rolls-Royces. They're making an absolute killing out of it. We're not stopping it. We haven't stopped the sale of marijuana, or dope, and we haven't stopped the sale of any other drugs. The difference between these two, of course—and I don't draw, in any sense, a moral equivalence—is that, with a lot of illicit drugs, if you jump in a car you'll crash it, or, if you go home to your wife or your partner, the drugs can be an inspiration for violence, and you can't say that about cigarettes: 'Yeah, I'll kill you.'

Once upon a time, I smoked. Once upon a time, I vaped. I do neither. I do neither now. But I'm not fool enough to think that in regional areas this isn't there in complete abundance. You can go to your tyre repair place and see someone having a durry, and it's the ever-filling bag of Drum. It's amazing. The bag's like a hundred years old, but it's chock-a-block full. What a wonderful trick! It's illegal. It's all illegal tobacco. It's coming in. So what are you going to do with this extra $3.3 billion? Are you going to go out and try and stop this trade? I bet you it'll be absorbed into the general coffers. Are you going to put $3.3 billion into education at school level? I smoked my first cigarette in year 6. That was an incredibly stupid thing. At the state school I went to, people smoked. They just did.

You bet.

I'll take the interjection. He asked if anybody smoked at boarding school. Absolutely, they did. We'd chomp through a packet on the train on the way home. But you would understand, Member for Moreton, with me coming from St George, that this idea that somehow we go back to St George and we're going to stamp out chop-chop and stamp out vapes—it's all marvellous stuff that we say in this crazy boarding school down here, the virtuous boarding school, but it's just not the reality.

So what is the reality of what we're doing? We're finding the people who obey the law and making them poorer. That's precisely what we're doing. They're addicted to cigarettes. You're finding people who obey the law and making them poorer. And who are the people who smoke roll-your-owns? I tell you what, they're not at the royal cruising yacht club. I'll tell you where they are. They're in the weatherboard and iron, they're in the poor places, they're in the caravan parks, and they're struggling to pay for the milk, pay for the groceries and pay the rent. I'm not saying they're all wonderful people. Like all of us, there's the same disparity of character that you have in any group of people. But they don't have money. They don't have spare cash. So, if they obey the law, they become poorer, and today we are voting—and I acknowledge that I'm voting for it too—to make them poorer. Let's get that on the record. That's what we're doing.

The other thing that worries me is this. I know and I've told the police—I won't put it on the record here—where they sell ice. I know the house. I know all about it. I know how it comes in. I live in a small regional town. I'm very aware of the so-called hillbilly areas where it comes in. I've told all this information. We know how this game works.

What you're going to have now is that people are going to follow the market. Right now, a packet of smokes is about 50 bucks. A packet of illegal cigarettes—international cigarettes—is $15. Hard to get? Piece of cake—absolute piece of cake. And roll-your-own chop-chop is massively cheaper. So what are people going to do, unless they want to just give their money to the federal government, who they don't like? They're going to go to the illegal market to buy it.

Now, here's the trick. People who sell illegal cigarettes are not sole traders of that product. They've got the whole suite of products. You'll find that the person who sells chop-chop sells dope and sells ice. Out in the country, coke's not the issue. Coke's an upper-class, inner-suburban drug. Here it's like picking your nose and eating it. It's ice. It's the disgusting destruction of so many families. At St George, I've been to the funerals of wonderful people. It comes to a pretty ordinary outcome.

So why are we encouraging people to meet these people? Why are we encouraging them to get into their orbit? Do we think they have some sort of variant morality which, when certain people come to them, they won't try to value-add to the product they're selling to them? Of course they will! If we believe it's virtuous to put up the tax on this, why don't we just triple the price of cigarettes? Why not take it up by a thousand per cent, if it's virtuous to put it up, when the biggest beneficiary of the tax on cigarettes is us! It's this building, so we're part of it. We've all got the maligned outcome of what happens from this product in this building. We bank it in the budget and we laud its contribution to the surplus, or whatever it does. But we also know what we're doing: we're dealing with poor people with an addiction and we're using their money to prop up the books. What it costs them is completely the inverse of the incremental tax rate, because we're giving a greater proportion of poor people's money to those wealthier people who smoke and who probably can afford 50 or 60 bucks—it's not an issue. Yes, okay, I'm supporting this. But I'm flagging this: we've got to stop going back to poor people and belting them up even more, while still thinking it's virtuous to belt them up—that there's a morality in belting them up—and that it's probably A-OK to put that money in the sky rocket of the federal government.

Where we are is that about 10 per cent of people smoke. That's not changing now; that's about it. That's about where it is. We'd probably find that it's pretty similar to a lot of other things, like drug-taking—and we know that when we test sewage. Think of all the laws that outlaw people's use of cocaine. Basically, you can go to any university student and they'll you how much it's worth and where to buy it. We know from the testing of sewage that it's everywhere—absolutely everywhere in inner-suburban areas. So we have Buckley's and none of stopping that, and it can actually do real damage, there's no doubt about that. Not that any drug doesn't, but you don't want to jump in a car and drive after taking it; we've seen the actions of people who have taken it. We just aren't going to wipe that out.

We have to have a reality pill: cigarettes will kill you and vapes will kill you, without the shadow of a doubt. If you want to die earlier, then they're a great way to go about it. But we're not going to stop them, we're just not. When we say in this building that we are, we're just lying. We can bring the rates down—we've done that, and we've done a very good job—but they have now bottomed out. So what we have here is yet another bill where we're all, basically—including me—talking from both sides of our mouths, saying, 'Smoking is bad, but I want the money.' I just foreshadow that the day will have to come sometime when we say: 'Enough is enough. It's a really bad habit; you shouldn't do it, but I'm damned if it isn't the federal government that's going to be the beneficiary of the money you pay.'

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

The Albanese Labor government is committed to protecting Australians and their health, and we're taking strong action on the reduction of smoking and vaping through legislation, enforcement, education and support. I take comfort from the fact that the honourable member for New England has indicated that the coalition are also supporting this legislation.

Smoking tobacco is the biggest cause of preventable death and disability in Australia. It takes the lives of around 20,500 Australians every year. The numbers are staggering and sobering: between 1960 and 2020, smoking tobacco is estimated to have caused the deaths of over 1.2 million Australians. The impact of tobacco use doesn't stop there. It also has substantial negative effects on the environment and the economy, and it compounds health and social inequities. Tobacco use is a major reason for poorer health status in socioeconomically disadvantaged groups. It's why the Albanese Labor government led the development of the National Tobacco Strategy 2023-2030. The strategy has 11 priority areas for action, including to continue to reduce the affordability of tobacco products. Despite comments from the member for New England, we know that is a clear way to stop the consumption of tobacco.

So today I'm pleased to support the Excise Tariff Amendment (Tobacco) Bill 2024 and the Customs Tariff Amendment (Tobacco) Bill 2024. These bills will increase the excise and customs duty on tobacco goods by five per cent per year for three years, in addition to the ordinary biannual indexation. These amendments cannot come soon enough when it comes to the scourge of vaping. Labor is taking on the tobacco industry so it cannot succeed in getting a new generation addicted to nicotine. For the first time in decades, under 25s are the only group that are currently recording an increase in smoking rates. I know, as the father of an 18-year-old—and from the group research I did the other day watching the footy with my son's peers—that this is a significant change, even for my generation. Recent research from the Minderoo Foundation found that about one in three young people have vaped in the past 30 days. Young people who vape are also three times more likely to then take up smoking. We know that vapes also have widespread use amongst young people, and we know that marketing is directed specifically towards young people. We know it's a massive problem in schools, and parents across Australia are rightly worried. So the amendments in these bills are just part of our fight against vaping.

This year, the Albanese Labor government has also banned the import of disposable single-use vapes and all non-therapeutic vapes, with therapeutic vapes being those used by someone who has made the decision with their doctor to transition away from tobacco. It's something I've got to say that I'm sceptical of, but I'll defer to those with better connections with the medical community. We'll continue to strengthen product standards for therapeutic vapes by limiting flavours, decreasing nicotine levels and applying pharmaceutical packaging—rather than vapes looking to be something like a child's toy that could be hidden in a pencil case.

Labor will also be introducing legislation to make it illegal to produce, advertise or sell single-use disposable or non-therapeutic vapes anywhere in Australia. It's important to note that our legislation is being supported by $29.5 million in funding to assist people with quitting smoking and vaping. This includes allowing easier access to Quitline services, as well as a new online hub and a mobile app. These bills will also maximise the excise and customs duty on loose leaf and other tobacco goods that are subject to the per-kilogram rate, with the duty paid on tobacco goods at the per-stick rate. This means that whatever form the tobacco comes to Australia in, it will be taxed the same.

We're taking these measures because we know they work. Making tobacco products more expensive is the most effective weapon in our arsenal to reduce the number of Australians who smoke. We know that both increasing the cost and using plain packaging work to deter tobacco users and make it harder for customers to access the tobacco. It means it's not just something that you can throw in the shopping trolley as it's now back behind the counter.

Over a decade ago, smoking rates in Australia were about 16 per cent. The latest data has it around 11 per cent, which is the equivalent of about one million fewer Australians smoking. Increasing taxes on tobacco will help Australians reduce their smoking, with the ultimate aim being to stop smoking in Australia altogether. It's crucial to support these measures with public health initiatives both in education campaigns and with dedicated treatment enhancements—

A division having been called in the House of Representatives—

Sitting suspended from 12:0 9 to 12:25

The revenue raised by these changes will be $3.3 billion over five years. These funds will go to the healthcare system for ongoing support for current and former tobacco users. This includes the new National Lung Cancer Screening Program and improving First Nations cancer outcomes. Combining higher taxes on tobacco with support for people trying to quit is a proven strategy for decreasing the number of people smoking. It's a virtuous hypothecation almost.

We are backing up these measures with $188 million committed over four years to bolster the Australian Border Force as it tackles the scourge of illicit tobacco. ABF will work in collaboration with the states and territories to strengthen our capacity to stop illicit tobacco at the border. In 2020-21, the size of the illicit tobacco market in Australia was estimated at nearly $1.9 billion, approximately 10 per cent of the market. Labor are committed to our goal of reducing smoking rates to below 10 per cent by 2025 and to five per cent or less by 2030. I know that the Australian Border Force will be an essential part of this process. Recently, as part of the public works committee, I saw some of the great they do on the front line in terms of inspecting cargo and the like up in Darwin. It's incredible. They have big X-ray machines to make sure that Australia's borders remain safe.

I'll finish with a quote from the National Tobacco Strategy:

Significantly reducing and eventually eliminating tobacco use in Australia would dramatically reduce illness, increase quality of life, and reduce health, social and economic inequalities for smokers, their families and the wider Australian community. It would prevent hundreds of thousands of premature deaths, reduce the burden of costly tobacco-attributable disease, increase workers' economic productivity and reduce the burden on carers.

That's a vision worth fighting for, and I commend these bills to the House.

Jason Wood (La Trobe, Liberal Party, Shadow Minister for Community Safety, Migrant Services and Multicultural Affairs) Share this | Link to this | Hansard source

I rise to speak on the Customs Tariff Amendment (Tobacco) Bill 2024. This bill increases excise duties for all tobacco goods and customs duties for tobacco products by five per cent a year for three years, starting 1 September 2023. As previously heard from the government member, the funding is to go into health and supporting people in the health system. It's obviously been taken into account when it comes to Treasury estimates et cetera.

The issue I have—I previously looked after this in Home Affairs as the assistant minister—is that, sadly, the black market when it comes to illicit tobacco is a growing market, and obviously we're now into the world of vapes. I go back to my time at the Organised Crime Squad, where work was done to take out those involved in illicit tobacco. In those days, there pretty much weren't actually laws to do much about it and so organised crime made a lot of money when it came to this.

When I was elected in 2004, we actually took a visit down to Customs. At that time they would seize container loads of tobacco. When we asked, 'What happens after that?' they said: 'Organised crime is involved. We don't want to touch it because of repercussions.' So a lot of work was done when it came to law enforcement under the previous government to establish one of the strongest regulatory regimes for tobacco in the world, with reforms to the Customs Act 1901 implemented in July 2019 to deter illicit trade in tobacco and enable strong action against criminal actors behind this. I'm also very proud that the previous government in July 2018 established the Illicit Tobacco Taskforce. It was very much a coordinated approach to targeting organised crime groups when it came to tobacco.

One of the issues which I've been greatly concerned about is the lack of input from state governments. At the Commonwealth level, we look after the borders. The ABF, can I say, have done a magnificent job when it comes to the borders. But when I've been taken through the mail houses by the ABF, it's like Santa's little factory. There's so much tobacco coming through that those involved in the security are picking out every third or fourth item which goes through the scanners as illegal tobacco. To be honest, it pretty much just gets put to one side—end of story. One thing we did do very well in the previous government was change it. I think it used to have stay there for three months. We got an immediate certificate, which could be issued by a court, to have that destroyed.

Importantly, on 18 March 2022, the former Minister of Home Affairs chaired a national ministerial meeting for counterterrorism and transnational and serious organised crime. The state and territory ministers responsible were there, and I actually spoke at that meeting, as the assistant minister, about illegal tobacco, how bad it was going to get and what was required. One thing I will say back to the states is that they have to give law enforcement—the police—a penalty notice. It's a hell of a lot easier for them to go and hand out a penalty notice to someone dealing with illegal tobacco, because it's so difficult. Even those reporting it—those legitimate people selling tobacco—are just getting outplayed by the illegal operators and organised crime groups. We are seeing in Victoria at the moment, when it comes to bikies and others, fire bombings. It was all to be expected. Sadly, it wasn't listened to. Organised crime are running out the good guys and attacking each other, and it's an entire mess down there.

If you took out those selling the illegal tobacco with a monster fine, where police could issue it, it would make such a big difference. At that meeting, ministers agreed to work together to consider coordinated efforts to combat illicit tobacco, including a response to recommendations of the Parliamentary Joint Committee on Law Enforcement inquiry into tobacco. Ministers agreed to reconvene in six months. Sadly, the Albanese government came into play after that, and nothing has happened when it comes to doing more to target organised crime. I know in Victoria police have now launched Taskforce Lunar again. They've now investigated over 30 fires linked to the tobacco wars in Victoria—if I can call them that. Since October, the taskforce has executed 70 warrants in tobacco and seized 108,000 vapes and three million cigarettes.

Can I just say: organised crime is involved in this. They always just follow the money, and the simple way to do it is to take the incentive away. You take the incentive away by going after those illegal operators with very tough penalties, then you take away the market. Sadly, that hasn't happened, and that's what we're getting down in Victoria. I'll leave it there.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.