Susan McDonald (Queensland, National Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

The Excise Tariff Amendment (Tobacco) Bill 2024 and the Customs Tariff Amendment (Tobacco) Bill 2024 increase the excise and customs duties for all tobacco products by five per cent per year for three years starting from 1 September 2023. The five per cent increase is in addition to the current biannual indexation based on the average weekly ordinary time earnings. The amendments to the Excise Tariff Act incorporate the excise tariff proposal that applied an additional five per cent increase per year from 1 September 2023 to 1 September 2025 to tobacco excise duty rates and aligned the per-stick and per-kilogram excise duty rates. The amendments to the Customs Tariff Act incorporate the customs tariff proposal that applied an additional five per cent increase per year on and from 1 September 2023 until 1 September 2025 to tobacco customs duties rates and aligned per-stick and per-kilogram customs duty rates.

Increasing duties on tobacco also increases the end cost of tobacco products. While these price increases typically reduce overall rates of smoking, they can also push customers to seek out black- or grey-market substitutes at lower prices. This increasingly punishes small businesses who do the right thing and don't sell illegal products.

I commit the bills to the Senate.

Jordon Steele-John (WA, Australian Greens) Share this | Link to this | Hansard source

The Greens will be supporting both the Excise Tariff Amendment (Tobacco) Bill 2024 and the Customs Tariff Amendment (Tobacco) Bill 2024, and we will continue to support wider efforts to reduce the harmful impact of tobacco. The current smoking situation in Australia is the best it has ever been, but there is still a way to go to further reduce smoking rates.

Since 1991, smoking rates in Australia have gone down from 24 per cent to 8.3 per cent. The percentage of Australians who have never tried tobacco has risen from 49 per cent to 65 per cent. Tobacco use is still a significant burden, however, on our health system, with 44 per cent of cancer cases being linked to tobacco usage. Australia has long been a world leader in tobacco control. Back in 2012, Australia was the first country in the world to implement plain packaging, a bold step that has become the norm—a significant public health achievement. In our collective efforts in ensuring our community is not exposed to the harms of tobacco, we must continue to make efforts to adapt our policy settings in pursuit of this goal.

This bill will achieve a further reduction in smoking rates in line with the National Tobacco Strategy. It is important to recognise that this bill on its own does not go far enough to tackle smoking rates, especially among young people. The rise of vaping amongst young people has resulted in a resurgence of tobacco usage, with research showing that young people who vape are more likely to also take up smoking. This is a significant risk to the public health gains that have been made in the last decades. I was proud to watch the Therapeutic Goods and Other Legislation Amendment (Vaping Reforms) Bill pass through this place this week. As a parliament, we have secured a huge step forward for tackling vaping amongst young people.

Vaping and smoking go hand in hand, and we must ensure that, alongside these laws that reduce supply, adequate support is also given to those affected by these laws. The Greens would like to see the government invest in more public health education campaigns to ensure that the health effects of smoking continue to be well understood. We cannot take the gains we have made in the previous decades for granted. The government should also increase the funding provided to quit supports, especially for young people and other vulnerable populations.

Fundamentally, it is the Greens' view that the government should not bank the income of this bill and save it for a rainy day. It is paramount that this funding is invested in supports for our community. While we're at it, it'd be great to get some more money for research, education, evaluation and other forms of healthcare cost-of-living relief by—and I make these suggestions quite often in this place—ending the currently supported tax cuts for billionaires and those corporations that receive subsidies from this government while burning down the planet. The Greens want the federal government, along with the states and territories, to invest these funds in public health care. I reaffirm that the Australian Greens will support this bill in the Senate.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

The Excise Tariff Amendment (Tobacco) Bill 2024 and the Customs Tariff Amendment (Tobacco) Bill 2024 argue that a further tax increase of 15 per cent will encourage Australians to give up smoking. The measure is estimated to increase tax receipts by $3.3 billion for the 2023-24 budget, with $290 million in GST to states and territories.

Firstly, as criminologists warn, tobacco tax increases will further grow the black market, pushing people that either cannot afford or are not willing to pay a higher price for their cigarettes to the black market. We're already seeing an underworld war over illegal vaping and tobacco sales, and shady operators have been reported knocking on the doors of now illegal vape shops, offering to take over their lease. Between the two related measures, the government has presented organised crime with hundreds of shops fitted out and ready to go into the illegal vape and tobacco trade. Australia is already losing a considerable amount of tax revenue due to tobacco sales on the black market—tax office estimates are $2.3 billion. This legislation will shift more revenue away from the government, towards organised crime.

In 2022 alone, 2.6 million kilograms of tobacco were sold on the black market. That was 2.2 million kilograms more than the previous year, indicating the growing influence of organised crime. It's clear; illegal tobacco consumption is estimated to make up 23.5 per cent of all tobacco sales in Australia. That's almost one quarter driven to the black market—that is, government driving it to the black market. Ten of 15 tobacconists, approached by the Daily Telegraph,sold illegal cigarettes for about $25 less than the legally taxed counterpart—and, they sold single cigarettes, which is an offence.

The government's actions endanger small business safety. Over the past six months, Victoria has experienced 40 firebombings to stores that illegally sold tobacco and vapes. In Ballarat, two tobacconists suffered a ram raid, and a drive-by shooting, which left a man dead, was linked to illegal tobacco products. The government says that the 2023-24 budget included $188½ million to fund the Australian Border Force to deliver a new illicit tobacco compliance model. It's unlikely they'll be able to properly crack down, given they're already overstretched in tackling the illegal drug market.

I must ask: how did Border Force fail to intercept 2.6 million kilograms of tobacco? Clearly this government has a problem enforcing the laws it already has. Now it wants to make matters worse. The vaping ban has already moved 87 per cent of vape users across to illegal vapes. While yesterday's brief moment of partial sanity will help that figure, it must surely be clear now that more taxation and prohibitions are futile and counterproductive. Here's a better idea: the government should spend less, tax less, and let everyday Australians and businesses get on with their lives.

Carol Brown (Tasmania, Australian Labor Party, Assistant Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

Firstly, I would like to thank senators who've made a contribution to this debate. Together the Excise Tariff Amendment (Tobacco) Bill 2024 and Customs Tariff Amendment (Tobacco) Bill 2024 apply to all tobacco goods subject to excise duty and excise equivalent tobacco goods subject to customs duty and will increase the excise in customs duty on tobacco goods by five per cent each year for three years.

These bills also align the excise and customs duty rate for tobacco goods subject to the per kilogram rate, with a duty rate applying to the average per stick tobacco content of cigarettes. This alignment will be implemented progressively over four years, from 1 September 2023, ensuring all tobacco products generally have equivalent tax treatment regardless of their form. These changes support the National Tobacco Strategy, in line with the government's aim of continuing to reduce tobacco consumption.

I commend these bills to the Senate.

Question agreed to.