Chapter 2

Key issues

2.1        All submissions received for this inquiry were supportive of the Bill.[1]

Views of anti-smoking organisations

2.2        Anti-smoking organisations endorsed the proposed increased penalties for smuggling tobacco as a way to prevent smoking and to deter criminals from attempting to defraud the government by conveying or possessing smuggled tobacco products.[2] According to the Australian Council on Smoking and Health:

Tobacco remains the leading cause of preventable death and disease in Australia, killing more than 15,000 Australians every year and with costs to the community estimated at costing more than $30 billion annually. There is no room for complacency.[3]

2.3        The anti-smoking organisations were also supportive of the government's action plan on smoking. Action on Smoking and Health Australia noted that the Bill forms '...part of the Australian Government's strong commitment to implementing and enforcing a comprehensive tobacco control strategy'.[4]

2.4        While agreeing with and supporting the proposed amendments, Quit Victoria considered that there is insufficient evidence to warrant the government diverting additional resources to the issue of the illicit trade of tobacco in Australia at this point in time:

...a more efficient way for the government to reduce tobacco use in Australia would be to concentrate its resources on proven tobacco control measures such as the elimination of tobacco advertising.[5]

Views of tobacco industry

2.5        The joint submission from British American Tobacco Australia, Phillip Morris Limited and Imperial Tobacco Australia strongly supported the imposition of a maximum penalty of 10 years imprisonment in conjunction with existing financial penalties.[6]  Further, '...the current magnitude of the tobacco smuggling problem in Australia...justifies the need for the Bill'.[7]

Response of government departments and agencies

2.6        The Australian National Preventative Health Agency (ANPHA) submitted that evidence indicates that tax increases on tobacco are the single most effective means available to governments to reduce tobacco consumption and thereby reduce death and disease due to smoking.[8] The ANPHA stated:

Smuggling and illicit trade of tobacco undermines the effectiveness of these tax increases and price policies: resulting in cheaper prices and potential increases in tobacco use. This in turn has the potential to contribute to the high incidence of smoking related morbidity and mortality.[9]

2.7        According to the ANPHA, the use of illicit loose tobacco has also been associated with illness over and above that caused by commercially produced cigarettes due to the use of bulking agents such as twigs, raw cotton and grass clippings.[10] Mould, mycotoxins, bacteria and actinomycetes have also been detected in illicit loose tobacco.[11]

2.8        The Department of Health and Ageing submitted that it is supportive of the Bill as tobacco smuggling undermines government efforts to reduce rates of smoking in Australia.[12] According to the department, the smuggling of tobacco products affects two key elements of Australia's approach to tobacco control:

• smuggled tobacco products evade paying tobacco excise, thereby undermining the effectiveness of excise as a tobacco control measure; and
• smuggled tobacco products are unlikely to comply with Australia's plain packaging or graphic health warning requirements.[13]

2.9        Both the Department of Health and Ageing and the ANPHA advised that the Bill is consistent with Australia's obligations as a signatory to the World Health Organisation Framework Convention on Tobacco Control.[14]

2.10      The Australian Customs and Border Protection Service (Customs) informed the committee that tobacco smuggling is identified as a key border risk and the proposed legislative changes would enhance the capacity of Customs to manage that risk.[15] Customs stated that the proposed changes:

...more accurately reflect the risks posed to the Australian community, the seriousness of the offences being committed, and provide a strong deterrent to criminals.[16]

2.11      According to Customs, the smuggling of tobacco endangers the community and the environment as the tobacco products commonly contain dangerous contaminants and much higher levels of carcinogens than legitimate products.[17] Smuggled tobacco products also circumvent quarantine controls, thereby increasing the potential for exotic pests and diseases to be introduced.

2.12      Customs indicated that tobacco smuggling offences are often committed by organised crime syndicates who view tobacco smuggling as a high return and relatively low risk venture.[18] Of concern to Customs is the possibility that '(t)he profits made by these syndicates can also potentially be used to fund other criminal activities'.[19]

2.13      Customs noted that tobacco smuggling is a specific example of defrauding the Commonwealth and the penalty proposed for these new offences is consistent with the maximum penalty for the fraudulent conduct offences in the Criminal Code.[20] The new offences would also be subject to existing arrest powers under section 210 of the Customs Act which enable a Customs officer or an officer from the Australian Federal Police or a state or territory police force to arrest a person without warrant in certain circumstances.[21]

Committee view

2.14      The committee recognises that the illicit trade of tobacco undermines the government's attempts to curb the prevalence of smoking in Australia and prevent its harmful effects. Since smuggled tobacco products evade government regulation, inspection and duty, these products present a significant risk to people's health, the environment and the economy.

2.15      The committee acknowledges that the Bill will introduce penalties for tobacco smuggling that are consistent with the maximum penalties for fraudulent conduct offences under the Criminal Code. The committee also notes that the Bill has received support from the tobacco industry and anti-smoking organisations alike. Accordingly, the committee strongly endorses this legislation.

Recommendation 1

2.16      The committee recommends that the Bill be passed.

 

Senator Trish Crossin
Chair

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