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Failed Taxes Are Funding Organised Crime

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Some have claimed that no One Nation Senators showed up to the Senate hearings into the Illicit Tobacco industry.

I sat through it myself, questioning publicans, tobacconists and small business owners about what this trade is doing to their towns.

What they told me was blunt. Smoking rates rising, legal tax revenue in freefall, and organised crime filling the gap — firebombings, shootings, communities losing businesses that will never reopen.

That’s exactly why One Nation will cut tobacco excise by 75 per cent – to take the market back off the criminals who are getting rich off this Government’s failed policy.

I did the work. I heard the evidence. And it backs our plan.

Transcript

Senator ROBERTS: Thank you all for appearing today and for the effort you’ve gone to. I’d like to go to each one in turn. Mr Allen, you’re a publican. You used to make some money out of cigarette sales?  

Mr Allen: I did.  

Senator ROBERTS: And you’re not a smoker?  

Mr Allen: No.  

Senator ROBERTS: But you have come up with a comprehensive integrated solution in your submission. It’s multifaceted and it includes a component to decrease smoking rates. So you’re not against cutting smoking, but you just want it to be done fairly, sensibly, honestly and legally.  

Mr Allen: Correct. If you look at the trends in Australia at the moment, smoking rates have—for a threedecade period, they were on their way down, until now. I’d argue that when this household survey comes out towards the end of this year, not only will they have flatlined; they’ve gone up. That’s based on the Roy Morgan research report and the wastewater report. That wastewater report, you’ve got to remember, says between 2024 and 2025. We’ve still got this year to go, so we could go up even further. I’ve lost my train of thought.  

Senator ROBERTS: This is defeating the actual purpose of the—  

Mr Allen: Sorry, yes. Smoking rates are coming down, alcohol consumption is coming down naturally, sugar consumption is coming down. If you look at soft drink consumption in Australia—it’s all naturally coming down. We don’t have a sugar tax in Australia. People are making better choices about their lives. It’s as simple as that. My kids don’t smoke, they don’t drink a lot. Some of them don’t drink at all. And that’s the choice they’re making. We don’t need big government telling us what to do, putting in these punitive taxes on things to try to stop us having choices in life. People are making their own choice to live a healthier life and that’s why we’re seeing tobacco, we’re seeing alcohol and we’re seeing sugar consumption come down. But unfortunately, because of what government has done with tobacco, we’re starting to see that plateau and then potentially even spike.  

Senator ROBERTS: I’ll come back to that in a minute. You said margins are so big that an illicit tobacco store gets shut down and they lose $200,000 of stock confiscated and it means nothing.  

Mr Allen: It’s a cost of doing business; that’s all it is. When you’ve got a $10 billion—the illegal illicit tobacco market in Australia is as big as the footwear industry. It’s huge. That’s how big it is. We’re taking a knife to a gunfight at the moment with the states trying to control this. It’s just not working.  

Senator ROBERTS: You’ve spoken up and spoken out in Bega. You’re speaking out very plainly and clearly here. Is there any fear behind that?  

Mr Allen: No. As I said, I’m not renewing my licence in three months. I can see no future in selling tobacco in my bottle shop, and that’s my position. I’m here to tell people how it is. I’m not here to hide behind things or try to fiddle at the margins. I’m trying to tell people what is happening in Australia and what it’s doing on a fiscal level, on a health level and on a crime level. And, as I think my evidence has shown, it’s a disaster.  

Senator ROBERTS: But there have been threats against people. There have been murders.  

Mr Allen: Absolutely. There was one in Melbourne: the young lady who was in the wrong house at the wrong time. The wrong house was firebombed. She was killed along with the dog. It’s terrible. And there have been people just killed. There’s the lady who was making kebabs in Auburn last year and just going about her business and they’ve come in and shot her and she’ll never be the same again. There was an armed robbery in Narooma a few months ago where that the poor guy behind the bar was hit in the side with a shotgun—in Narooma. He’ll never be the same again. It’s all to do with this criminality that’s coming into our regions because of illicit tobacco.  

Senator ROBERTS: So we either comply with the law or we let the unlawful—  

Mr Allen: The underworld will take it over, I’ve got no doubt. I went to the state inquiry last year and all the senators, whether they were Labor, Liberal, Green, National—like Cate Faehrmann, the Green, Stephen Lawrence from Labor—grilled Amber Shuhyta, the ITEC Commissioner, fairly hard. They were interested in what excise levels are doing. This inquiry is very politicised. The Greens and the Labor senators seem to be interested in anything else but excise. And if we don’t focus on excise, nothing is going to be solved here. I can guarantee that.  

Senator ROBERTS: Speaking of excise, I’ll just divert slightly. One Nation policy is to cut excise on alcohol—on beer and spirits served in hospitality venues. And the reason for that is that the excise is so damn high and alcohol prices are so high that they have binge drinking and what they now call preloading, tanking up before you go out, so the hospitality venues get bugger-all revenue.  

Mr Allen: I absolutely agree, Senator. 

Senator ROBERTS: It is causing a decrease in service from where they have responsible serving of alcohol to now binge drinking.  

Mr Allen: Correct.  

Senator ROBERTS: So that’s damaging.  

Mr Allen: It was very similar when the alcopops tax came in, if you can remember, back in, I think, 2008. Kevin Rudd said, ‘We’ve got a binge drinking problem in Australia, so we’ll bring in the alcopops tax. We’ll tax premixed or RTD drinks at the same level as spirits, at 66 per cent.’ So what happened? Everyone went out and bought spirits. The kids went to the parties; they took their bottle of spirit and their bottle of Coke and just mixed it up. And often it was a much higher concentration than the four per cent premixed RTD in the can. God knows what percentage it was. But that’s the problem when you try to solve things with taxation and excise. It’s just madness.  

Senator ROBERTS: What you’re all arguing for is getting back to the core issue, the core problem, the driver of this problem, and that is excessive excise tax.  

Mr Allen: The sweet spot was 2020. We collected $16.3 billion in tax, and that adjusted is $20 billion in today’s money. In 2020 we collected $20 billion. In 2030 we’re going to collect $2 billion. And I doubt that’ll be right. That’s a 90 per cent drop in 10 years. Now, if that is successful policy, I’m not here. I don’t know what is.  

Senator ROBERTS: And smoking rates are going up.  

Mr Allen: And smoking rates are going up. It’s just absolute madness.  

Senator ROBERTS: All of you have given very direct answers, so I’ll move on to Ms Wishart. You’re a legal family-owned tobacconist. In a small town in regional New South Wales, Junee. You say that the illegal tobacco industry has devastated your small business, with income down by 80 per cent. So you’re down to 20 per cent of what you had. In your submission you’ve called for the excise to be rolled back because of the huge social aspects for the community and society in general. Is that correct?  

Mrs Wishart: Yes.  

Senator ROBERTS: Do you want to expand on that?  

Mrs Wishart: Particularly in regional centres, if a business closes down, another one may never open.  

Senator ROBERTS: You lose that knowledge of the community.  

Mrs Wishart: Yes. And banks don’t like small business. You’ve got to fight to open one, let alone to survive in one. And small towns are communities. That word just isn’t a catchphrase. We are communities. So when the four local schools, when Can Assist, when the swimming club, the football club and the soccer club all come in for donations, they’re guaranteed it, or they were. I haven’t been able to donate for two years, which is horrible as a member of the community. They know not to even ask now because they know the position that I’m in.  

Senator ROBERTS: And the criminal pushing illicit tobacco doesn’t donate.  

Mrs Wishart: He’s not supporting anyone but himself. Nothing’s getting put back.  

Senator ROBERTS: Okay, thank you. Mr Rodie, you’re a tobacconist at Margate?  

Mr Rodie: I’m a tobacconist at Deception Bay.  

Senator ROBERTS: Sorry, you said that. That was my mistake. You’ve come up in your submission with a list of 10 recommendations that show the comprehensiveness of the solution. You’re not opposed to cutting smoking; you just want to go about it fairly so that everyone benefits—correct?  

Mr Rodie: Yes, that’s right. I’d like a level playing field. At the moment there’s no level playing field at all.  

Senator ROBERTS: Thank you. Mr Alexiou, you’re from Devonport, Tassie?  

Mr Alexiou: Yes, Senator Roberts, I am.  

Senator ROBERTS: And you’ve got a Foodworks, so you’re a supermarket?  

Mr Alexiou: Yes. We’ve been in our business for 40 years.  

Senator ROBERTS: You’re asking the Senate to recognise that illicit tobacco is not a victimless issue. It’s hurting real businesses, real workers and real communities in Tasmania—correct?  

Mr Alexiou: Correct.  

Senator ROBERTS: And the social knock-on effect is important to the whole community. You’ve also said that the long-term viability of neighbourhood retail in Tasmania is at risk.  

Mr Alexiou: Of course. Have you heard the previous speakers? I concur with those comments. 

Senator ROBERTS: Thank you, Chair, and thank you all because your evidence has been succinct and direct. I appreciate that. 

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$11 Billion Black Market

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This is my interaction with federal agencies at the Illicit Tobacco hearing in Canberra on 18 May 2026.

Tobacco excise tax losses range from $7.7 billion to $11.8 billion annually (ITEC report).

The agencies confirmed that illicit tobacco is a massive, highly sophisticated, and growing threat tied directly to organised crime.

The Australian Federal Police (AFP) stated that intergang violence, property destruction and loss of lives can be directly linked to this illegal black-market trade.

I pointed out that the real safety issue facing everyday Australians involves fire bombings, gang violence, and murder on our streets, not just general health advice.

The agencies pointed to successful operations, such as the AFP citing specific busts netting millions of illegal cigarettes and $93 million in evaded excise. However, when I pressed them on concrete metrics to
show whether they are actually making a dent in the trade or if these seizures are just a “drop in the ocean,” they struggled to give a clear percentage or ratio against the total market.

Success isn’t just about slowing down market growth or rattling off isolated seizure statistics. The Australian public deserves to know the exact scale of the impact being made.

We shouldn’t be merely managing or stopping this illegal trade from “growing,” we should be eliminating it entirely.

Transcript

Senator ROBERTS: Thank you all for appearing. Let’s explore your understanding. I’m going to give you free rein to show the people of Australia and the parliament of Australia what you know and are doing. Perhaps you could answer these questions in turn, please, starting on the left. Do you accept that there is a significant problem with illicit tobacco? If so, why? If not, why not? How do these problems manifest? Could you be specific about the impacts on human life and also the dollar cost.  

Mr de Crespigny: From CDPP’s point of view, I’m not sure whether we’re best qualified to provide an answer. We’re prosecuting offences, but we’re certainly very much engaged in relation to prosecutions arising from the illicit tobacco trade.  

Ms Sirec: As we said in our submission, any criminality is a concern for the Australian Federal Police. Illicit tobacco is an illicit commodity and we will target that. We do know that it’s having an impact. As we’ve heard from our ACIC colleagues, it’s impacting our communities, it’s impacting health and it’s obviously causing some violence and harm in the community. So, certainly, we work very strongly with our partners on being able to impact and disrupt the criminal environment in connection with illicit tobacco. I have forgotten the second part of your question.  

Senator ROBERTS: How do these problems manifest—if you could be specific—in terms of the cost to human life and the dollar cost?  

Ms Sirec: As for how it manifests, we know that competition is happening across organised crime gangs, so we see intergang violence. We see property destruction occurring in our jurisdictions, which our state and territory partners also have to target. We’ve heard from the ACIC regarding the loss of three lives, and I think the ACIC are on the record already about the dollar value of illicit tobacco being in the billions, in terms of impacting community.  

Mr Meyer: Building on what has been said already, I think the other element, from our perspective, is the recycling of the profits that are made through illicit tobacco into a range of other organised crime activity, as I mentioned, whether it be drugs or a range of other activities which flow on to a range of harms within the community. Just in terms of metrics and numbers, I know that the Illicit Tobacco and E-cigarette Commissioner’s report estimates the total amount of excise evaded in 2024-25 to be between $7.7 billion and $11.8 billion. The Australian Institute of Criminology estimated that the total economic and social cost of illicit tobacco in 2023-24 was approximately $4 billion. 

Senator ROBERTS: The other group, AUSTRAC?  

Mr Helmond: In response to your first question, in 2024 AUSTRAC developed the national risk assessment on money laundering. At the time, it assessed the illicit tobacco market as posing a medium and increasing threat of money laundering. That same product forecast that, over the next three years, the illicit tobacco threat was likely to increase. We have recently published an update to that national risk assessment which shows that illicit tobacco has increased in volume and we’re seeing that criminal groups are becoming more sophisticated and diverse in the ways in which they’re laundering that money. That’s really driven by high market demand and profitability. I think, to your second question, just referencing the ITEC annual report 2024-25, ITEC estimated that in 2024-25 the illicit tobacco market was worth up to $6.9 billion.  

Senator ROBERTS: Again, each in turn, what are the three most important points that you would like to make to this committee?  

Mr de Crespigny: From the CDPP’s point of view, there are two things that we are seeing about the place. Firstly, of the prosecutions that we’re doing, more of them involve multiple defendants, indicating large, organised crime groups. The other thing that we’ve seen about the place is a rise in state prosecutions, so the states are very much taking it on. In both New South Wales and Victoria, they’ve increased the penalties for relevant offences, such as the sale of illicit tobacco. It’s not something which is just being done by the Commonwealth; it’s also being done by the state authorities.  

Senator ROBERTS: Do you have a third point?  

Mr de Crespigny: I do think that there’s possibly a need to understand its impact upon the community, both in loss of revenue and in the health impact that it has. That’s something that we try to get across in our sentencing matters, because part of the point of the exercise is to, in actual fact, lower Australia’s smoking rates.  

Senator ROBERTS: What about the safety of people?  

Mr de Crespigny: People are safer if they don’t smoke.  

Senator ROBERTS: I meant in terms of firebombings and murders.  

Mr de Crespigny: That’s something that, certainly, I observe because I have heard it at the committee and read it in the newspapers, but it’s not something which falls within the CDPP’s speciality.  

Senator ROBERTS: Thank you. AFP?  

Ms Sirec: The AFP knows that the threat is dynamic, interconnected, tech enabled and resilient. There are three points that I would like you to take away. Firstly, our approach, with our partners, is that we target supply chains, enablers and trusted insiders. Secondly, we exploit and dismantle criminal communication systems. Thirdly, we identify, restrain and seize criminal assets and financial facilitators to take the profit out of this crime.  

Senator ROBERTS: Could you be more specific, please. How do you do these things? What do you need? What actions do you actually take?  

Ms Sirec: As for actions, we target the supply chains. For instance, in New South Wales, we partner with New South Wales police and the Crime Commission to target trusted insiders—that is, those individuals who allow the illicit flow of tobacco to come through the borders. We exploit and dismantle the criminal comms systems, through understanding our capabilities around encrypted communications, and being able to infiltrate and use our powers to be able to identify organised crime. Through the additional funding that the government has provided regarding our Criminal Assets Confiscation Taskforce, we can identify, restrain and seize the criminal assets, and we’ve done that successfully. We’ve seized directly over $39 million worth of property since 26 June 2025.  

Mr Meyer: As I mentioned in one of my previous responses, serious and organised crime see there being lower barriers to entry and lower penalties associated with illicit tobacco and the market. A bill is going through parliament at the moment, and I know that, across our state and territory counterparts, they’re also looking to have greater consistency, in terms of their own regulatory and legislative approach. Firstly, being able to level out and make it harder for serious and organised crime to operate, and increase the penalties, obviously will help to deter some of those actors. Secondly, targeting the efforts the whole way through the supply chain, as Deputy Commissioner Seric said, not just here in Australia but at the border and internationally with our partners, will be incredibly important, and we continue to do that. Thirdly, in addition to the commodity itself, it’s being able to dismantle the actual groups behind it. Those groups are involved in a range of other illicit activity as well. By effectively deterring and dismantling those groups, we’re actually going to have a significant effect across a range of threat types.  

Senator ROBERTS: AUSTRAC? 

Mr Helmond: Coming to this from the perspective of an intelligence agency, the first point that I’d make is about partnering with our law enforcement and intelligence agencies that we work with. AUSTRAC is a member of the Illicit Tobacco Taskforce, we support the national disruption group and we work with the ITEC. It’s really through those partnerships, and their ability to leverage our data, that ensures there is financial intelligence that gives a good picture of the activities there—the supply chains, and how profits are generated and moved. It gives those investigative agencies greater insights, in order to target these groups. The second point I’d make is that it’s essential for AUSTRAC, as both an intelligence agency and the financial regulator, to work very closely with our industry partners—the banking sector, the remittance sector and the digital payments sector—so that we can not only continue to get those insights from them but also work with them on increasing their risk controls, their transaction monitoring and their understanding of the nature of the threat and the way it’s evolving, in order to help them detect that activity. The third point that I’d make goes to a real investment in our crypto-tracing capability. With the impact that government is having, we’re starting to see that increase in online sales and more movement of these proceeds through digital currencies. It’s important for us to keep up with that and continue to be able to have the tools and the capability to follow those fund flows through those digital transactions that are made as well.  

Senator ROBERTS: How do each of you measure your effectiveness? Is the taxpayer getting value? And, if so, how do we know? We’ve pretty much all agreed that this problem is worth billions of dollars, it is costing lives and it has health impacts. What are you doing to reassure the taxpayer?  

Mr de Crespigny: From CDPP’s point of view, our effectiveness is measured by the prosecutions that we undertake; we think we’re undertaking those effectively and we’re getting quite reasonable results. The offence provisions are quite complex. These offence provisions—say, the Customs Act provisions—aren’t just focused on the actual importation of the tobacco; it’s a requirement that the person also had an intention or was reckless in defrauding the revenue. They’re not the most straightforward offence provisions. Our effectiveness is in working with our referring agencies and pursuing prosecutions.  

Ms Sirec: From the AFP’s perspective, we would measure our effectiveness by our ability to partner, disrupt and dismantle organised criminal groups. Only months ago, Commissioner Barrett identified her No. 1 target, who was involved not only in a myriad of other crimes but also in illicit tobacco. Through our partnerships with our offshore law enforcement agencies, we’ve been able to disrupt his ability, to directly impact. There’s a success measure there. Of course, the number of prosecutions and seizures of illicit tobacco and our ability to understand the criminal networks are another measure of success. Finally, as I said before, with the investment that the government has made in terms of our asset restraint, we’ve been able to restrain more than $39 million since June 2025 and taken the profit out of this crime.  

Senator ROBERTS: Could you give me some quantified specific effect that you’re having with each of those measures? What indicates success, and what indicates how far we have yet to go?  

Ms Sirec: Sure. I can give you a couple of case studies. As per our submission, for instance, with Operation Collinsville, late last year, with the Australian Border Force and Victoria Police, we arrested six senior syndicate members and charged them with various charges. There were 14 search warrants across various factories and premises. We seized over 24 million cigarettes, six million kilos worth of looseleaf tobacco and 51,000 vapes, while also being able to seize various other items and instruments of the commission of the crime—mobile phones, cash machines et cetera. That’s just one investigation. In another investigation, in 2024, Operation Centinel-South-Tyres, over 10 million cigarettes were seized and a number of the syndicate members were arrested. This syndicate was responsible for the importation of more than 77 million cigarettes, so we disrupted that syndicate, which equated to $93 million in excise tax. In 2025, we also successfully obtained restraining orders for over $800,000 in property.  

Senator ROBERTS: It’s a big problem. How big is it? Is this a drop in the ocean, or has this had a significant impact on their illegal business?  

Ms Sirec: Every criminal group that we can disrupt creates an impact.  

Senator ROBERTS: In your answer, you’re not giving me anything specific, in terms of indicating your understanding of how big the problem is financially.  

Ms Sirec: We’ve heard already from our colleagues here about the dollar value, in terms of the cost of this criminality, and also—  

Senator ROBERTS: With due respect, I want to know what your understanding of it is.  

Ms Sirec: As we’ve heard, it’s a $7 billion harm to the community. 

Senator ROBERTS: Is what you’ve done, in the cases that you’ve just rattled off, five per cent or 50 per cent of the trade?  

Ms Sirec: I can’t give you a quantum of the percentage of the trade, but they are only two examples—they’re in our submission—of multiple examples that I could provide of the impact that we’re having.  

Senator ROBERTS: It’s good to see that success, but is that five per cent, 50 per cent or 90 per cent? How much further do we have to go?  

Ms Sirec: I won’t speculate on the percentage; I believe that sits there. Certainly, the fact that we are sitting here today means that we’ve obviously got more to go. But we have the right capabilities and the right people involved in this to do everything that we can to disrupt this.  

Senator ROBERTS: How do the people and the parliament know from your answers—you’re not being very specific—in terms of the overall figure? Are you making a dent in it; again, is it five per cent?  

Senator COLBECK: It’s $93 million worth of excise seizure versus a $12 billion loss in excise; it’s a drop in the ocean.  

CHAIR: Perhaps I can assist, Senator Roberts. We’re all here to try to stop this market growing, and it’s great to have numbers of cigarettes, like 10 million, being confiscated at the border and so forth. But it would be really helpful if you could provide to the committee, on notice, in percentage terms, the amount of disruption that you are making with what is being confiscated versus the size of the illicit market. I can appreciate that you may not have that in front of you, and this is not to take away from any of the great work that you are doing, but I think it is an important piece of evidence for the committee, so that we are able to look at just the pure scale of what is coming into the country.  

Ms Sirec: I’ll have to take that on notice.  

CHAIR: Thank you; that would be very helpful.  

Senator ROBERTS: I want to make the point that we’re not just interested in stopping the business growing; we’re interested in stopping the business altogether. 

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The Illicit Tobacco Market Must Be Wiped Out

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During the February Estimates hearings, I pressed the government and the Illicit Tobacco Commissioner on the ineffectiveness of their strategy to combat the illicit tobacco market.

Tobacco excise revenue is projected to fall to just $1.9 billion by 2029-30, far below the $16 billion-plus previously collected. A clear sign the government does not expect its enforcement efforts to meaningfully reduce the black market.

The Commissioner’s own report lists 10 drivers of illicit tobacco yet fails to directly acknowledge that high excise and the resulting price gap are major contributors, despite everyday Australians, including police officers, confirming this reality.

Independent data from Roy Morgan shows smoking rates have increased from 16.8% to 17.1% following recent excise hikes, contradicting the government’s claim that higher taxes reduce smoking. Without knowing the true size of the black market, boasting about a 34% increase in seizures of illicit product is meaningless. We cannot measure success when you don’t know the scale of the problem.

The government continues to act without reliable data, ignores evidence that contradicts its assumptions, and refuses to confront the policy settings driving the illicit tobacco growth.

This is a failure that Australians should not be forced to tolerate. It’s costing taxpayers billions in lost revenue.

One Nation will take drastic action until the illicit market is wiped out, then return duty to a much lower, more sensible and sustainable rate.

— February | Senate Estimates

Trancript

CHAIR: Senator Roberts.  

Senator ROBERTS: My questions are to the Commissioner for Illicit Tobacco and E-cigarettes. My question on notice No. 15 remains unanswered from last estimates. It read: How many acts of violence were committed in Australia that were directly related to illegal tobacco and vapes? I’m talking about murders, fire bombings, assaults and similar acts or threats of violence. I did get a part answer in that the question was best answered by law enforcement, which I assume would include various state and federal agencies. Your role, as you expressed it to me in last estimates is, ‘activities that support intergovernmental governance functions and support reporting on the size and consequence of the illicit market’. Doesn’t consequence include acts of violence related to the illicit industry and criminals associated with that?  

Ms Shuhyta: We had looked at how to report on those statistics. At the moment, there isn’t a consistent way that we can report on the exact number of criminal activities related to illicit tobacco across states and territories. There are different datasets and definitions. For example, an arson might be coded or recorded as an arson but not necessarily if it is illicit tobacco related. It’s very hard for me to pull together the data from across Australia on those specific activity levels. We are continuing to work with states and territories in terms of what might be realistic there. We’re working with criminal intelligence agencies and AFP to look at the best way we can report as we move forward. The metrics that I have in the report to parliament this year are based on the data available to us. As we move forward over the years, we will definitely be looking at how we can mature that data and make it more sophisticated and comprehensive.  

Senator ROBERTS: Thank you for admitting that you don’t know the consequences. I suggest listening to some people in the street. Secondly, the loss of tobacco excise revenue is stunning. In 2019-20, excise brought in $16.3 billion. In 2024-25, tax revenue had fallen to $7.8 billion, or about half, with a projection for 2025-26 of $5.5 billion, or one-third of what it was just five years ago. Minister, when will you accept that the Laffer curve applies to tobacco excise and the higher the tax rate the less revenue is received, especially with cheap illicit tobacco competing. I’m talking to police in Queensland who go to illicit tobacco to get cheaper cigarettes.  

Senator Watt: We certainly agree that illicit tobacco is a very serious problem and the connection to organised crime. That’s why we’ve devoted so many more resources to tackling illicit tobacco. I’m sure the commissioner and others could talk to you about the operations they’ve undertaken. In fact, I don’t know if you were here when the commissioner gave his opening statement.  

Senator ROBERTS: I was.  

Senator Watt: He talked about the success of those operations in terms of the seizures that have been achieved.  

Senator ROBERTS: Minister, his people have seized plenty of material, but we don’t know the total size and it could be a tiny proportion, which is what this is. 

Senator Watt: The commissioner might be able to give you some information about that. I’m not sure. On the excise, I understand why many people would like to see us reduce the excise. The government’s view is that we shouldn’t be giving in to organised crime. We should actually take them on and we should arrest them. We should confiscate the illegal tobacco. We know that tobacco kills thousands of Australians every single year. We know that higher prices for tobacco puts people off smoking, and that’s a good thing for their health. It’s a good thing for the health budget that we all pay for.  

Senator ROBERTS: That’s why they buy it cheaper, Minister.  

Senator Watt: I’m aware of that. That’s why we are so determined to break the organised crime rings that are behind illegal tobacco.  

Senator ROBERTS: But, Minister, you’re not confident because you forecast, yet again, another reduction in revenue from tax. Page 8 of the Illicit Tobacco and E-cigarette Commissioner Report 2024-25 lists 10 factors behind the growth in the illicit market. Not one of those mentions the high level of tobacco excise. Commissioner, do you really believe the high price of legal cigarettes is not driving demand for illicit tobacco? Not even 10th out of 10?  

Ms Shuhyta: Just a correction—excise is listed on that page. In terms of a number of drivers for the illicit market, price differential is listed as one of those drivers. Within price differential, there is a number of aspects. One is that the cost of illicit tobacco is pushed down because of cheap supply costs and an overabundance in the region of illicit tobacco—  

Senator ROBERTS: And lack of excise.  

Ms Shuhyta: And then excise and tobacco company profitability actually pushes up regulated tobacco. You’ve got those two things at play. Excise isn’t the be-all and end-all driver of the illicit market. We see different excise rates around the world in different countries that don’t correlate with the size of the illicit market. In fact, in some countries with the cheapest tobacco there are sizeable illicit markets. Or within the same country that has a standard excise rate, you’ll get different market shares of illicit tobacco in different cities. For me, it’s not as simple as advising government that excise is the solution.  

Senator ROBERTS: Talking to people in the street, including policemen who use illicit tobacco, it’s certainly very significant. On page 9, Commissioner, you’re claiming success because the amount of illicit product being seized has increased by 34 per cent. Do you accept making a claim of success when you don’t know how much the black market has grown is pointless? If you don’t know the total size of the black market and no-one has any idea—I’ve asked before—you don’t know whether you’re having success or you’re failing. Looking at the criminal activities and the adoption of illicit tobacco widely, it looks like you’re failing.  

Ms Shuhyta: I’m going to try to answer the question that is in there. We do have an estimate of the size of the illicit market. This report does estimate the size of the illicit market. It’s the first time that we’ve been able to do so. I think at the last estimates I wasn’t able to give you that size because the report hadn’t been finalised and tabled, but it is there now.  

Senator ROBERTS: Minister, I find it troubling that the budget projection for tobacco excise in forward estimates only shows revenue of $6.9 billion in 2028-29. That suggests you do not expect the commissioner to make a dent in the illegal trade. Shouldn’t that figure be closer to the $16 billion or more we used to get? Isn’t that an admission of failure or of ignorance?  

Senator Watt: We’re absolutely not giving up in the fight against illegal tobacco. Again, I’m sure—  

Senator ROBERTS: You said you are.  

Senator Watt: I don’t think you should insult the efforts of the Border Force personnel.  

Senator ROBERTS: That was a clever switch, Minister, but I’m not doing that. They’re doing a good job.  

Senator Watt: You’ve just said it’s a failure. They’re the people who are on the front line, taking on organised crime.  

Senator ROBERTS: Your failure to control illicit tobacco?  

Senator Watt: You and I are sitting in this room. We have Border Force personnel out there on the front line taking on the organised crime elements behind illegal tobacco, and we are absolutely determined to keep that up.  

Senator ROBERTS: Minister, the report makes a statement on page 19 that reducing the tobacco excise will increase smoking rates and undo the gains made to date, which you said earlier. In July 2025, Roy Morgan showed recent excise increases on top of the normal CPI increase had caused an increase in smoking rates from 16.8 per cent to 17.1 per cent. The graph I’ve seen confirms that. Yet you are saying the opposite. The National Tobacco Strategy added large excise increases in September 2023, ’24 and ’25. Can you show any data that these massive increases have reduced smoking rates? I suggest that the opposite is true, and that’s what the data shows. 

Senator Watt: The trouble with—  

Senator ROBERTS: Criminals don’t ask for ID.  

Senator Watt: No, I’m aware of that. They’re very bad people who deserve to be locked up, which is what we’re trying to do. Your question about smoking rates is probably one you should take up in the Health estimates. That’s not the work of this department. The work of this department is going after organised crime. We’d appreciate your support in that effort.  

Senator ROBERTS: You’ve got my support. That’s why I’m talking about this and that’s why I’ve been raising it for a couple of years now. Decades of shoddy governance show that our biggest problem is governments acting without data, going without data and contradicting the data in so many areas.  

Senator Watt: I’ll let that pass. 

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Illegal Tobacco Market Booming—Despite Millions Spent

,

The Albanese Government has appointed an Illicit Tobacco and e-Cigarette Commissioner to tackle the illegal cigarette market. I asked what impact the $188 million already spent has had, and where the additional $156 million allocated for the next two years will go. I have serious concerns about waste, and the response I received did not provide clarity. These issues will need to be revisited in future Estimates as accounts and outcomes are released.

What’s clear is that there is no baseline for the Commissioner’s operations. I would have thought that the first step should’ve been to determine the size of the market, identify the crimes being committed, and calculate how much revenue the government is losing in duty. Those fundamental questions have not been asked. The Commissioner suggested that seizures was the benchmark of success. I strongly disagree. If the illegal market is booming, then naturally, seizures will increase—this metric does not reflect real progress.

I will continue to push for hard data showing a reduction in the illicit tobacco market as a result of this role. At present, it feels like a mechanism to shift blame without holding anyone accountable. If that proves true, One Nation would abolish this position.

— Senate Estimates | December 2025

Transcript

Senator ROBERTS: Thank you for appearing today. My questions are about the Illicit Tobacco and E-cigarette Commissioner. Is she in?

Ms Foster: Yes. We’ll just get the right officers up to the table for you. It will be a combination of the ITEC Commissioner and the ABF Commissioner.

Senator ROBERTS: I’ll try to be brief. The budget allocated $156.7 million over two years from 2025-26, to expand programs to tackle the illicit tobacco trade. What programs are they, please?

Ms Shuhyta: I think I might defer that to the ABF Commissioner. That money was referred to—sorry. There are two amounts of money. Could you just repeat the budget year that you were referring to?

Senator ROBERTS: ‘$156.7 million over two years from 2025-26 to expand programs to tackle’—

Ms Shuhyta: Yes. I can go through the number of agencies that have that. Sorry, I was thinking about the previous budget year, which went to ABF. Just let me get that list for you. So $49.4 million went to the Australian Federal Police to expand the Criminal Assets Confiscation Taskforce; $7 million went to support the Australian Border Force to utilise emerging technology to screen and detect more illicit tobacco at our borders; $19.9 million went to fund my office, the Illicit Tobacco and E-cigarette Commissioner’s office; $1.4 million went to establish a new international collaboration for regional assessment of criminal network behaviours—that’s where we’ve engaged the UN office of drug control to conduct an Asia-Pacific/Pacific regional threat assessment; $40 million went to support states and territories to establish local-level capability; $31.6 million went to strengthen compliance and enforcement functions under the Public Health (Tobacco and Other Products) Act 2023 and the Therapeutic Goods Act 1989; $4 million went to extend the national tobacco and e-cigarette public health campaign, to target motivations and behaviours of the people who use illicit tobacco; and $3.3 million went to the Commonwealth Director of Public Prosecutions to prosecute contraventions under the public health act and the Therapeutic Goods Act.

Senator ROBERTS: That’s quite a wide net. You were allocated $19.9 million, as you said, of this money, to administer your office. What is that being spent on?

Ms Shuhyta: That’s being spent on the functions that my office was set up to deliver under the Public Health (Tobacco and Other Products) Act. That includes activities that support intergovernmental governance functions, support national strategy development and implementation, support reporting on the size and consequence of the illicit market and support advice on new laws. It is staffing to undertake those functions.

Senator ROBERTS: How many staff do you have—full-time equivalents?

Ms Shuhyta: We are budgeted for 24 full-time equivalents at the moment. We have 12 APS staff and we are undertaking a recruitment process to fill the vacancies, and we have a number of contractors on board to assist with those functions.

Senator ROBERTS: How do the taxpayers know this cost is justified by the outcomes it generates? Have you got KPIs?

Ms Shuhyta: I have reporting obligations under the legislation.

Senator ROBERTS: What are your KPIs under the legislation?

Ms Shuhyta: I have to report on all enforcement actions and consequences undertaken in the last financial year and the size and nature of the illicit markets so we can monitor that year on, year out. It’s also on excise and customs equivalent duties evaded.

Senator ROBERTS: So you can track your effectiveness?

Ms Shuhyta: That should be able to assist us and monitor the intergovernmental activities that are responding to this issue.

Senator ROBERTS: How do you know whether or not you are being effective?

Ms Shuhyta: It’s a good question. My role is to enhance intergovernmental cooperation and coordination to bring the efforts together across states and territories, across portfolios and across multiple points of the supply and demand chain. The value-add that the office brings is to support that force multiplication effect instead of all of the separate agencies working separately.

Senator ROBERTS: I’d make the comment that with the AFP there I would have thought they would be better equipped, knowing their expertise in criminology or countering criminology, to do that. Do you have a
starting point for your own measure of success? How many illegal cigarettes entered Australia in the last 12 months?

Ms Shuhyta: I think the ABF might have that data, in terms of cigarettes that they’ve seized coming into the border.

Mr Reynolds: To give an indication of how much we interdicted on the border, we interdicted 2.5 billion sticks of cigarette during the financial year 2024-25. We also interdicted over 439 tonnes of loose-leaf tobacco,
and we interdicted six million vape devices and accessories during that financial year.

Senator ROBERTS: Those are pretty impressive figures. Do you have any idea from that, extrapolating, how many came into the country?

Mr Reynolds: That is an assessment that will be in a report provided by the ITEC Commissioner to the government.

Senator ROBERTS: Would it be possible to get that number on notice?

Mr Reynolds: That is a matter for the government.

Senator ROBERTS: Minister, would it be possible to get that number on notice?

Senator Watt: Which number was that?

Senator ROBERTS: The AFP man can tell you. It’s the number of cigarettes that would have come into the country illegally extrapolated from the number of captured or known cigarettes.

Senator Watt: I’ll take that on notice, and we’ll do our best to answer that question.

Ms Foster: If I could just revert to your last question to Ms Shuhyta, I think there are two points to make. The AFP has an incredibly important role in this mission, but it’s quite a specific role, consistent with their mandate. Ms Shuhyta’s role is to try and make the whole work as effectively as possible together. She’s got an example of the work she’s doing with police forces across the jurisdictions which will illustrate the kind of value that the office can add.

Mr Reynolds: May I also add that the Australian Federal Police is a member of the national disruption group, and their expertise is being used as a part of that group to break the illicit tobacco business model.

CHAIR: Final question, Senator Roberts.

Senator ROBERTS: In January 2024, Minister Butler announced:

The Albanese Government cracks down on illegal tobacco imports The Albanese Government has committed $188.5 million to crackdown on the importation of illegal tobacco.

It’s been almost two years now. There must be some tangible benefit for the money. Commissioner, what reduction in the importation of illegal tobacco has resulted from this initiative so far? I know of police in
Queensland—I know of good citizens in Queensland—who are now going to the illicit tobacco trade because they see that the excise is so damn high.

Mr Reynolds: I mentioned the metrics before. That’s a 38 per cent increase compared to the previous financial year.

Senator ROBERTS: Is that what you’ve interdicted?

Mr Reynolds: That’s correct. I’ll just provide a very quick vignette from Queensland where, just recently, the Australian Border Force and the Queensland Police Service executed a series of warrants that resulted in one of the largest illicit tobacco and vape seizures in Queensland’s history. The total duty evaded for the combined seizures, of over 30.5 million cigarettes and 5.1 tonnes of tobacco, is estimated to be over $53.8 million with the estimated street value of over 4,000 vapes to be $20.05 million. It was an extremely successful joint operation between the Australian Border Force and the Queensland Police Service.

Senator ROBERTS: With respect, we can only assess whether it’s successful or not by comparing it to the total quantity of cigarettes coming in—tobacco and vapes coming in illegally—and finding their way to the
market. Apparently that is still huge, and it’s causing crime around Australia with tobacconists getting firebombed.

Mr Reynolds: The fact that we’re able to conduct that successful operation—that breaks that particular criminal syndicate. It’s only through breaking the criminal syndicates that we can reduce the scourge of illicit
tobacco in Australia.

Senator ROBERTS: Some people would argue that it’s only cutting the excise back to sensible levels that would break that, because people now find it’s worth going to the criminals to get their tobacco.

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