The Albanese government introduced sweeping legislation to federal parliament on Thursday to overhaul customs rules and target illegal chop shop tobacco.
The reforms remove previous legal burdens, allowing border authorities to charge importers if cigarettes are concealed, packaged improperly, or sold below tax rates.
Under existing customs rules, officials had to prove that illicit tobacco was being knowingly imported illegally before taking action. The new laws simplify seizures by establishing clear criteria, including whether products are presented in non-standard packaging or priced below the combined amount of federal excise and Goods and Services Tax (GST).
Customs administration in Australia is managed federally, with the Australian Border Force overseeing enforcement at ports and international borders. Illicit tobacco, often referred to as chop shop tobacco, includes finely cut black-market leaf and imported contraband cigarettes sold outside the regulated, heavily taxed domestic market.
New powers for law enforcement
Assistant Customs Minister Julian Hill said the updated regulations would modernize border controls and equip law enforcement agencies across the country with stronger powers.
He told ABC Radio on Thursday that the measures would give "powerful new tools to border force, but every state and territory police force to go after the crooks."
Hill described illicit tobacco as a major global issue. "This is a major global problem, and Australia's not immune. It's this massive surplus of cheap production of stuff for less than $1 a pack that's been weaponised by serious and organised criminal syndicates flooding national borders," he said.
Law enforcement officials have long requested additional powers to intercept illicit shipments. Hill said the updated customs changes were "exactly the powers which our law enforcement officials have been asking for," adding that he expected to have support across the parliament for the bill.
"The way to really hurt these crooks is to go after their cash and their houses and their boats and their cars and their toys and take the profits of their crime off them," Hill said.
Surging black market and political debate
The legislative crackdown comes amid a steep rise in black-market tobacco consumption across Australia in recent years.
Estimates from the Australian Bureau of Statistics show that about 80 per cent of all tobacco consumed in 2025 was illegal, representing a dramatic increase from 12 per cent recorded in 2017. During that same period, the federal tobacco excise has more than tripled.
The Australian Bureau of Statistics is the national statistical agency responsible for gathering economic and social data. Political debate over tobacco regulation has centered in Canberra, Australia's capital, where lawmakers have grappled with the dual pressures of public health taxation and rising organized crime.
Opponents of current tax policy argue that the government increasing the excise by 34 per cent since taking office in 2022 has contributed to a burgeoning black market. Critics have linked the price hikes to a recent wave of fire bombings targeting tobacco and vape sellers across multiple states.
In response to the growing illicit trade, opposition political parties have proposed drastic reductions to tobacco taxes. The Coalition pledged to cut the tobacco excise by 80 per cent in an effort to stop the rise of illegal cigarettes, following a proposal by One Nation to cut the excise by 75 per cent.
Prime Minister Anthony Albanese left the door open on Wednesday to cutting the tobacco excise, but also said making legal tobacco and vapes more affordable was not going to help. "State governments as well have a responsibility to crack down on shops that are selling illegal products," he said.
