Almost half of all tobacco consumption in Australia has shifted to the illicit market, according to analysis from the national employer association Australian Industry Group. This has resulted in an estimated loss of up to $10 billion a year in Commonwealth excise revenue – comparable to the revenue raised from superannuation fund income tax and more than double that collected from fringe benefits tax.

Speaking at the Senate Legal and Constitutional Affairs Committee on 4 May, the Australian Industry Group called for a co-ordinated national approach to deal with the illegal tobacco crisis – which it says has become a public health, safety and funding catastrophe.

“Our members are on the front line of this explosion in illicit tobacco trade – compliant retailers are bearing growing regulatory costs while their illegal competitors operate unchecked, and the gap is widening every year,” said Innes Willox, Chief Executive of the Australian Industry Group.

“Fragmented laws and inconsistent enforcement across jurisdictions have given the illicit trade room to grow. We need a single national market approach that closes those gaps and ensures Commonwealth funding reaches the state agencies doing the work on the ground.

“There are billions of dollars at stake and the time has come for a nationally coordinated solution,” Mr Willox said.

Australian Industry Group is also calling for the modernisation of Australia’s Integrated Cargo System and cargo screening infrastructure, a comprehensive review of penalty regimes to ensure sanctions are proportionate to the scale of illicit trade profits, and the adoption of landlord lease termination powers across all remaining jurisdictions consistent with the NSW and Victorian models.