Smoke gets in your eyes: What will fix Sydney’s illicit tobacco problem?

You don’t need to be an expert on the topic to know the North Shore is far from immune to the tobacco and vape trade. All you need to do, in fact, is take a stroll along any main street — Victoria Avenue, Willoughby Road, Military Road — to see that tobacco vendors outnumber nearly any other business. 

Local MPs have been pushing for tougher laws to suppress a burgeoning and thriving illicit market. The NSW Coalition will be introducing a bill to parliament that intends to “crack down on criminals” with “million-dollar fines or jail”. The bill is being pushed by local Liberal MPs such as Tim James, Felicity Wilson, and James Griffith, and has also gained the support of independent MPs such as Jacqui Scruby and Michael Regan, who have been vocal about the issue.

But will the route of strong-armed law and order be enough to tackle the problem of illicit tobacco? 

What do we know about the bill so far?

While a draft of the bill has yet to be seen, some details of it have been released by the NSW Coalition. These include harsher penalties for offenders, the ability for NSW Health to close businesses found in breach, and the creation of an offence for landlords who knowingly let tenants use stores for the sale of illegal tobacco or vapes.

This will come in addition to the $157 million package in the federal budget this year, which will be split primarily across the Australian Federal Police and local State and Territory agencies, as well as various other government agencies in smaller dividends.

What do the experts say?

Experts have differing opinions on what the solution should be. 

For Professor Becky Freeman, a leading academic in public health, it revolves around stronger regulations and enforcement infrastructure. In particular, Freeman has stressed the need for the adoption of a tobacco licensing scheme. 

“While we’ve made cigarettes more expensive, put graphic warnings on packs, gotten rid of tobacco advertising, we have done very little to control how and where tobacco is sold”, Freeman said in June. The NSW Government officially introduced such a licensing scheme last week, replacing the previous Retailer Identification Number system. Under this new scheme, a national police check and proof of identity will need to be provided by applicants. Licenses can also be refused or revoked if a holder has been found guilty of an offence relating to the sale or supply of tobacco or vaping goods.

Other experts, such as Dr James Martin — a senior lecturer in criminology — and Dr Edward Jegasothy — a senior lecturer in public health — see the problem as more grounded in economics. In a paper published in March, Martin and Jegasothy write “the government’s current approach to restricting the supply of nicotine has facilitated the growth of a dangerous black market”.

Arguing the growth of illicit trade is linked to excessive excises on legal tobacco, the two conclude that “nicotine consumers are voting with their feet”.

They’re certainly not alone with this perspective. 

Even NSW Premier Chris Minns has hinted at the possibility of excise tax reform, stating last month that "we need to have a look at how big this excise is; how it's driving illegal tobacco sales in our community”.

However, this reform would have to occur at the federal level. The excise tax on tobacco has been steadily increasing across Australia since 2010, where it faced a singular 25 percent rise. Between the years of 2013 to 2020, the excise was raised annually by 12.5 percent. 

Whether the bill proposed by the Coalition will be solely centred around enforcement and regulation, or have a more multi-faceted approach to the issue, we will have to wait to find out: NSW Parliament does not sit until August and a full draft has yet to be released.

When approached for comment, Willoughby MP Tim James said that “while excise is a federal matter, we shouldn’t let that become an excuse for inaction at the state level. The NSW Government can and should be doing far more through stronger enforcement, regulation and tougher penalties”.

Image: AFP