Federal government supports Queensland anti-illicit tobacco strategy

The federal government has thrown down a challenge to state premiers over the rampant illicit tobacco trade, dangling fresh cash and pointing to Queensland’s dramatic crackdown as a blueprint for the rest of the country.

Spurred by new data showing legal tobacco sales surged 55 per cent following a tough state enforcement blitz, Canberra is injecting an extra $2.7 million into Queensland’s model – a move designed as a sharp contrast to NSW and Victoria, where firebombings and gang violence linked to black-market cigarettes continue to escalate.

The results from the Queensland Liberal-National government under Premier David Crisafulli are being used to argue that aggressive state-level enforcement can disrupt the criminal market and drive smokers back to legitimate retailers.

The Commonwealth will take its total investment in Queensland’s illicit tobacco crackdown beyond $18 million, with data showing legal tobacco sales remained 40 to 45 per cent above baseline levels for six months after tougher enforcement powers came into effect.

Assistant Minister for Customs Julian Hill said the retail data provided to the Office of the Illicit Tobacco and E-cigarette Commissioner showed that sustained street-level enforcement could disrupt illegal tobacco markets and push consumers back towards legitimate retailers.

“Queensland’s results building on South Australia’s pioneering approach show that sustained street-level enforcement can disrupt illegal markets and drive consumers back to legitimate products,” Hill said. “Every illicit tobacco store shut down is another blow to the criminal gangs profiting from this trade.”

The illegal tobacco industry has boomed across the country in the past five years, largely because of the high price of cigarettes, driven by tobacco excise which is about $1.55 a stick or $2587.90 a kilogram.

While legal tobacco packets start about $40, illegal tobacco can be as little as $10. It is estimated the trade, worth more than $8.5 billion nationwide, has put a $42 billion black hole in the federal budget.

The Australian Bureau of Statistics estimates 80 per cent of tobacco sold in Australia is illicit.

Debate continues in Canberra over how to reduce the illegal tobacco industry, with the Coalition and One Nation revealing policy plans to dramatically reduce the tobacco excise by up to 80 per cent, while also legalising vape and nicotine pouches for adults. There has been increased frustration within federal cabinet that state Labor governments, particularly in Victoria and NSW, are ducking their responsibilities.

Hill has said previously that even if the government wiped out all excise, illegal tobacco would still be cheaper, calling on the states to play their part.

“You’ve got to go and shut the shops. It’s constitutionally not something the Commonwealth can do,” he told parliament last month.

Queensland’s tougher regime includes powers introduced in November last year allowing Queensland Health to shut illicit tobacco and vape stores for up to 90 days without a court order.

Landlords who knowingly lease premises to illicit tobacco and vape operators can face fines of up to $161,300 and up to 12 months in prison. The state has also used large-scale “blitz” operations targeting every relevant store in an area simultaneously.

During a recent 10-day Operation Major enforcement blitz, 148 stores were issued with three-month closure orders.

Authorities seized more than 11.8 million cigarettes, 1.7 tonnes of loose tobacco, 87,000 vapes, 4.2 litres of vaping liquid and 270,000 nicotine pouches, with an estimated street value of more than $15.7 million.

Queensland Health has issued more than 300 closure orders, contributing to more than 1000 illicit tobacco closures announced by state and territory governments nationally.

The data also suggests the crackdown may be affecting smoking behaviour, with calls to Quitline more than doubling in the 10 days after major enforcement operations.

In Victoria, where the illicit tobacco market has been regarded as the largest and most violent in the country, is experiencing its first significant shocks after the Carroll government implemented long-delayed “shut-down” powers that came into effect on September 9.

In NSW, Premier Chris Minns has backed calls for the Albanese government to overhaul the tobacco excise and policing of illicit cigarettes.

The federal government says the Queensland crackdown is expected to generate $89 million in additional tobacco excise revenue and another $11 million in GST over two years, with the potential returns matching or exceeding enforcement costs.

Hill said organised crime groups had treated illicit tobacco as a low-risk, high-profit business for too long.

“Strong laws, strong enforcement and strong partnerships between governments are helping turn the tide on Australia’s illicit tobacco trade,” he said.

“Organised crime groups have treated illicit tobacco as a low-risk, high-profit enterprise for too long. Those days are coming to an end.”

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