The Combatting Illicit Tobacco Act 2026 lifts maximum penalties to 15 years' jail and fines of up to 30 times the duty evaded. But courts rarely go near the maximum, and criminals treat fines as a cost of doing business. What deters them is the real chance of being caught.

The Commonwealth controls the border, not the shop counter. Until the states agree on uniform, properly policed retail licensing, a raided store just reopens down the road.

A credible response needs a binding intergovernmental agreement for uniform, properly policed retail licensing in every jurisdiction. That is achievable: this very Act delays one of its own provisions so the states can sign a new agreement on unexplained wealth and asset confiscation. If governments can cooperate on seizing criminal assets, they can cooperate on who is allowed to sell tobacco.

Then there is price. Successive excise increases have made legal tobacco among the most expensive in the world, creating the price gap the black market feeds on. The Opposition cites Parliamentary Budget Office estimates that the government's excise policies will reduce revenue by more than $20 billion over five years to 2028-29, against a 2023 forecast of a $3.3 billion increase. A tax that collects less while enriching criminals deserves a hard look.

Meanwhile, the follow-up Bill introduced on 10 September adds new obligations for customs brokers, depots and warehouses, much of which was never discussed with industry. Customs broker numbers are already falling. Once again, the burden lands on the compliant trade, not on the criminals.

The new Act gives law enforcement sharper tools, and that is welcome. But until the states close the shop door and Canberra confronts the price signal it created, the trade will simply step around the penalties.

A longer version of this article was first published in the Daily Cargo News on 12 October 2026.