Legislative Council: Wednesday, November 30, 2022



Tobacco and E-Cigarette Products (Tobacco Product Prohibitions) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 2 November 2022.)

The Hon. R.B. MARTIN (17:05): I rise as the lead speaker for the government on the bill introduced by the Hon. Connie Bonaros, and indicate that the government will support the bill subject to some minor amendments. I would like to thank the Hon. Connie Bonaros for her ongoing advocacy, on addressing illicit tobacco in South Australia and for bringing this bill to this house.

The illicit tobacco market presents a public health problem locally, nationally and internationally as it increases the availability of low price and unregulated tobacco, which more often than not does not have plain packaging and the required health warnings. Australia led the way with plain packaging and health warnings on cigarette packaging, and we must ensure that these actions are not undermined by illegal tobacco products.

Health warnings on cigarette packaging have had an enormous benefit to health outcomes of Australians, driving down rates of smoking. Illegal tobacco skirts around this health messaging, with consumers of illegal tobacco not exposed to the health warnings. This has the capacity to undermine the downward trend in smoking prevalence and increase smoking-related harm.

In a 2020-21 report by KPMG, they found that, while overall consumption of tobacco has fallen, the consumption of illegal tobacco has grown, creating a greater percentage of illegal tobacco within the overall consumption. The estimated 2,242 tonnes of illegal tobacco imported into Australia sees a massive $3.4 billion in lost revenue from the tobacco excise, and this is only expected to grow. That is money not being spent on prevention, health and education.

Existing South Australian laws do not allow for South Australian authorised officers to enforce compliance with the commonwealth laws around the packaging and labelling of tobacco products, and therefore requires them to refer cases of possible non-compliance to the relevant commonwealth government enforcement authority. In response to this limitation, the bill proposes to regulate illicit tobacco at a state level by:

prohibiting the supply or sale of tobacco products in South Australia that do not meet the requirements of the commonwealth's Tobacco Plain Packaging Act 2011;

prohibiting the packaging and sale of tobacco products that do not contain an approved health warning; and

prohibiting the supply or sale of tobacco products that are prohibited goods or have not had the required excise duty paid as per the commonwealth Customs Act 1901 and Excise Act 1901.

This bill will give the police extra powers and incentive to enforce the law, with increased penalties hopefully driving people out of the illegal industry of importing and selling unexcised tobacco.

The government has obtained advice to determine whether there are any adjustments that should be considered to strengthen the bill's application. In accordance with that advice, the government will lodge amendments to this bill:

to allow for future adjustments to the commonwealth legislation without the need to further amend the Tobacco and E-Cigarette Products Act of 1997;

will provide further clarity in the scope of the definition of 'health warning' to strengthen enforceability;

will reduce overlap between some of the new offence provisions that may have the potential to undermine the enforcement and prosecution of these offences in some circumstances; and

will amend the regulation-making power in section 87 of the Tobacco and E-Cigarette Products Act 1997 to reflect the proposed amendments contained in this bill.

A request has been made to parliamentary counsel to make these amendments to the bill to strengthen the enforceability of these laws. However, given the complex nature of this bill, with its interaction of state and commonwealth legislation, parliamentary counsel have advised us that there are a few drafting issues that need to be considered and resolved.

Therefore the amendments are unfortunately not ready for lodging at this time, but are expected to be finalised early in the next sitting year. The government is committed to addressing harmful tobacco use in all its forms, and I again thank the Hon. Connie Bonaros for her continued advocacy on this issue. I look forward to working with the honourable member to address illicit tobacco in South Australia.

The Hon. R.A. SIMMS (17:09): I rise today to speak very briefly in support of the Tobacco and E-Cigarette Products (Tobacco Product Prohibitions) Amendment Bill 2022. This bill, introduced by the Hon. Connie Bonaros, is a simple one. It increases the penalties for people who illegally import or pack tobacco in South Australia. These increased penalties are in close alignment with other jurisdictions, such as New South Wales and Victoria.

As with other drug reform, the Greens regard this as a health issue and believe that we should be guided by a harm minimisation approach. According to the Cancer Council, tobacco smoking is the largest preventable cause of cancer and the single greatest cause of preventable death. In Australia, smoking is estimated to kill almost 20,500 people per year. Dr Caroline Miller, from SAHMRI, in relation to plain packaging of cigarettes has stated: 'Implementing strong tobacco control policy measures like this ultimately makes profound differences for public health and our health system.'

I understand, in a separate bill, we will be considering the nature of packaging in more detail, but the fundamental principle here is the same: the regulation of the tobacco industry will give us beneficial health outcomes. The Hon. Connie Bonaros has brought to our attention the practice of illegally importing and packing tobacco products and described for us in detail how this system works. Illicit tobacco products are unregulated and, as such, we have no understanding of whether or not they are safe for sale within our country or whether or not they meet Australian standards. We do not know how much extra harm they cause beyond the harm that is already caused by tobacco products.

The intended outcome of this bill, and the increased penalties, is to deter people from illegally selling illicit cigarettes, and the Greens certainly support that objective. We hope that this is what will happen in practice, and that a reduction in illegal tobacco products will result in less harm for South Australians.

We will need to wait and see whether these increased penalties have the desired effect in terms of reducing the illegal packaging and import of cigarettes and tobacco products. I hope that, should this bill become law, the government will closely monitor its effectiveness. It may be some time before we have appropriate evidence to show us if these increased penalties have worked, and I look forward to looking at the outcomes.

As I indicated from the outset, the Greens are supportive of the honourable member's bill. I put on the public record our appreciation to the Hon. Connie Bonaros for putting this on the agenda of the parliament.

The Hon. N.J. CENTOFANTI (Leader of the Opposition) (17:12): I rise to speak briefly on the Tobacco and E-Cigarette Products (Tobacco Product Prohibitions) Amendment Bill 2022 and indicate that I will be the lead speaker for the opposition. This bill aims to strengthen the packaging, sale and supply requirements of tobacco in South Australia by aligning health warning requirements with commonwealth law and increasing maximum penalties and expiation fees for breaches of health warning, sale and supply offences. The bill is modelled on similar legislation that has been enacted in Western Australia and New South Wales to better align state laws with commonwealth law.

KPMG's 'Illicit tobacco in Australia' 2021 full-year report, which was released in June 2022, highlights a series of issues surrounding the illicit tobacco market in Australia. The 2021 report found that Australians consumed 2,242 tonnes of illicit tobacco, representing an estimated excise value of $3.4 billion. It has also found that unbranded tobacco usage has seen an increase of 36 per cent and that illicit tobacco consumption accounted for 19.3 per cent of total tobacco usage, an increase of 2.4 per cent since 2020. However, despite a marked increase in the consumption of illicit tobacco, there has only been one conviction following 1,723 investigations into the illegal sale of tobacco in Australia since 2012.

The opposition supports the bill and the measures it proposes to restrict the packaging, sale and supply of tobacco products that are not marked with labelling and health warning requirements. The bill will also increase the maximum penalties from $10,000 to $50,000 and the expiation fee from $500 to $1,250. These increases are proportionate given the huge profits being made in the black market for illicit tobacco.

Finally, the bill will bring South Australian legislation into line with the commonwealth's Tobacco Plain Packaging Act 2011 with respect to packaging, appearance of products and health warnings. I thank the Hon. Connie Bonaros for identifying this opportunity to strengthen health laws in South Australia and for bringing this bill before the council.

The Hon. C. BONAROS (17:14): Nothing pleases me more than when we have agreement across the floor in this place. I am very thankful to all honourable members for their support of this important bill. Can I thank the speakers for their contributions today: the Hon. Mr Martin, the Hon. Mr Simms and the Hon. Ms Centofanti. I think everyone has articulated very well why we are here.

I want to say that I think the Hon. Mr Simms has made a very good point that the proof will be in the pudding. I do not think this is a magic solution or the silver bullet in terms of addressing this problem, but I am hoping that it will deter people from selling illegal tobacco for all the reasons that the honourable members have outlined today. I also acknowledge that it is one of several tools that we need to look at further to further strengthen those rules to deter people even more.

I would say also that I probably would have increased those penalties a lot more if we could have, but obviously we have to be consistent in terms of our drafting and the penalties that we can apply. This bill, as the Hon. Mr Martin has outlined, is complicated by the fact that we are traversing the commonwealth jurisdiction as well. We are doing what we can within the ambits of what is allowed, and I am very grateful to all honourable members for their support.

I will note that, in terms of one of the issues I flagged during my second reading explanation when I introduced this bill, there is an amendment on file that members will have in relation to possession. That was an issue that came up post the introduction of the bill and should have been addressed earlier. There was some concern flagged with us about a provision specifically in relation to possession to make it crystal clear that, if you are in possession of illegal tobacco for the purposes of sale, that would be enough in order for our authorities to be able to enter a premises and take further action.

We just wanted to make that absolutely clear. That was the intent of parliament, and that is what that amendment seeks to do. In relation to ongoing discussions that have taken place with the relevant minister and the government, I have flagged my support for further amendments. I think the Hon. Mr Martin outlined quite succinctly why we have not got those now but also the reasons for those. All the amendments that we have discussed with the minister are aimed at further strengthening the provisions of this bill and not having to come back for future adjustments also in relation to future further changes that may be needed in due course.

With those words, I indicate that, based on those discussions with the minister, we have certainly agreed between us—and I am asking members to be mindful of this when we consider the bill—that the quickest way to do this would be to pass the bill through this chamber with the amendment that relates to possession, and then the minister will have carriage of the bill in the other place and be in a position to file amendments to deal with those issues that have already been outlined.

That is certainly the discussion that we have had, and that is my understanding of how we will progress today. Those amendments will obviously come back to this place for consideration once we have had the opportunity to have them dealt with in the other place. With those words, I thank everybody again, all honourable members, for their support of this bill, and I look forward to its swift passage through this chamber.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 3 passed.

Clause 4.

The Hon. C. BONAROS: I move:

Amendment No 1 [Bonaros-1]—

Page 3, after line 28—insert:

33—Possession of certain tobacco products

(1) A person must not, without lawful excuse, have possession of prescribed tobacco products for the purpose of sale.

Maximum penalty: $50,000.

(2) In this section—

prescribed tobacco product means tobacco products that—

(a) are prohibited goods within the meaning of the Customs Act 1901 of the Commonwealth; or

(b) do not comply with the requirements of the Tobacco Plain Packaging Act 2011 of the Commonwealth.

I have already explained what this amendment does. It seeks to make it abundantly clear and explicit in the bill that possession of certain tobacco products for the purposes of sale will also be captured by the bill. I think it is important to note for the benefit of members also that it is possession for the purposes of sale. We are not suggesting that these penalties apply to someone walking out of a shop with a packet of cigarettes, even though it is illegal tobacco. They apply to the individuals who are actually selling the tobacco. This amendment makes it clear that if a person without lawful excuse has possession of prescribed tobacco for the purposes of sale then that will become an offence under this bill.

Amendment carried; clause as amended passed.

Title passed.

Bill reported with amendment.

Third Reading

The Hon. C. BONAROS (17:21): I move:

That this bill be now read a third time.

Bill read a third time and passed.