Major crackdown on illicit tobacco trade

A major crackdown to stem the illicit tobacco trade will be launched by the Albanese government to target the smuggling and sale of illegally imported cigarettes,

On Sunday, Treasurer Jim Chalmers announced a $188.5 million boost deliver a new compliance program over the next four years, to tackle all aspects of the illicit tobacco trade.

Led by the Australian Border Force (ABF), in partnership with Commonwealth, state and territory governments, the funding will assist with targeting and disrupting illicit tobacco in source and transit countries before it reaches Australia.

Consumers can illegally purchase illicit cigarettes for as little as $20 for a pack of 20 at some vape stores, while at legal outlets, a similar product would cost roughly $50.

Under the new funding, the ABF will also introduce technological improvements, including artificial intelligence, to enhance the detection and disruption of illicit tobacco.

According to official estimates, the forgone revenue to government coffers of the illicit activity is in excess of $3bn a year.

In 2024, authorities seized 1.7bn illegally imported cigarettes and almost 900 tonnes of loose leaf or “chop chop” tobacco products.

Dr Chalmers said the crackdown was intended to deter the consumption and distribution of illegal tobacco, and send a clear message to traffickers that their trade was a “serious crime”.

“Illegal tobacco is more than a problem for the Budget, it’s a health challenge and it’s a challenge to our border security,” Dr Chalmers said.

“This new model strengthens our existing efforts by working in partnership with the states and territories and building on the Albanese Government’s tobacco excise package.”

ABF head Michael Outram said his agency was committed to maintaining its hard-line stance on the illicit tobacco trade.

“This funding will enhance and modernise our ability to stop illicit tobacco at the border and before it ever reaches our shores, air or seaports,” Commissioner Outram said.

“We know illicit tobacco trade is systematically tied to serious and organised criminal groups, and we will work hand in hand with domestic and international partners to disrupt their activities.”

Authorities have blamed the illicit trade of tobacco as the reason behind a spate of tobacco store fire bombings in recent months, as rival syndicates vie for greater control of the lucrative market, which is then used to fund other illegal activities.

Health Minister Mark Butler said limiting the availability of illicit tobacco products was key to reducing the number of smokers.

“We cannot stand by and allow another generation of people to be lured into addiction and suffer the enormous health, economic and social consequences,” he said.

Deputy opposition leader David Littleproud welcomed the measure but implored the government to increase regulation at the point of sale.

“I congratulate the government for this,” Mr Littleproud said, adding that the the forgone excise “should be put back into our economy, put back into into health system and education.

“We need sensible policy, better legislation, better regulation at the point of sale to complement this and to make sure we don’t get carried away with excise as well.”