This bill became law on Jul 9th, 2024.
Budget, tax & economy
Imported tobacco in Australia gets an extra 5 per cent customs duty increase each September in 2023, 2024 and 2025, on top of the usual wage-linked indexation increases.
Earlier tariff proposals had already imposed higher tobacco import duties from 1 September 2023, leaving the law needing to catch up and prevent lower indexation rates applying instead. This bill writes those higher rates into law, adds the annual 5 per cent increases, and lowers the loose-tobacco conversion factor over time.
Australia had already built a strong tobacco-control regime, including plain packaging, but smoking still remained the leading cause of preventable death and disability and the government had begun collecting higher tobacco import duties from 1 September 2023 under tariff proposals. This bill brought the law into line with those higher rates, locked in annual 5 per cent rises through 2025 and a staged change to loose-tobacco duty calculations, and it took full legal effect after Parliament passed it and Royal AssentThe final formal approval that turns the passed bill into an Act of Parliament. was given in July 2024.
The main criticism was that higher tobacco duties could backfire by pushing smokers into the black market, boosting organised crime and hurting legitimate small retailers without doing enough on their own to cut smoking. This case was raised most clearly by Coalition and One Nation speakers, while some members who still supported the bill also warned stronger enforcement and wider health measures were needed.
Stephen Jones MPMember of Parliament, the title used after the names of ministers in the explanatory memorandum. introduced this bill. It passed on the voices.
Did it become law?
Yes
Became law 09 July 2024
Final passage
Passed without a counted vote
Members called out ‘aye’ or ‘no’ — no individual votes were recorded.
Passage speed
111 days
From introduction to the latest recorded parliamentary step
Meaning
Imported tobacco in Australia gets an extra 5 per cent customs duty increase each September in 2023, 2024 and 2025, on top of the usual wage-linked indexation increases.
Loose tobacco and other imported tobacco taxed by weight will face progressively higher duty because the law lowers the conversion factor each year from 1 September 2023 to 1 September 2026.
The law applies these higher imported tobacco duty rates from 1 September 2023, matching the higher rates already being collected under earlier tariff proposals.
The law replaces any lower tobacco duty indexation that would otherwise have applied on 1 September 2023, and possibly 1 March 2024, so importers are assessed under the new higher formula instead.
The amendments have the effect of increasing the Additional Factor for an indexation day by five per cent if the indexation day is 1 September 2023, 1 September 2024 or 1 September 2025. This has the effect of increasing the excise duty and the customs duty rate for all tobacco goods by five per cent per year for three years starting from 1 September 2023, in addition to the current indexation.[Schedule 1 to the Excise Tariff Amendment (Tobacco) Bill 2024, item 1, subsections 6AA(5) and (6) of the Excise Tariff Act; Schedule 1 to the Customs Tariff Amendment (Tobacco) Bill 2024, item 1, subsections 19AB(5) and (6) of the Customs Tariff Act]Customs Tariff Amendment (Tobacco) explanatory memorandum
will also align the tax treatment of tobacco products subject to the per kilogram excise and excise-equivalent customs duty (such as roll-your-own tobacco) with the manufactured per-stick rate, by progressively lowering the ‘equivalisation weight’ from 0.7 to 0.6 grams. These progressive decreases will occur on 1 September each year from 2023, with the new weight coming fully into effect from 1 September 2026. This will raise the per kilogram duty accordingly.Customs Tariff Amendment (Tobacco) explanatory memorandum
The Excise Tariff Amendment (Tobacco) Bill 2024 and the Customs Tariff Amendment (Tobacco) Bill 2024 are taken to have commenced on 1 September 2023. This ensures that the amendments retrospectively take effect on and from 1 September 2023, which is the day that the Customs and Excise Tariff Proposals facilitated the collection of duties at the higher rate. The retrospective application of the amendments does not adversely affect duty payers as they have been paying duty at the rate imposed under the amendments as a result of the application of the Tariff Proposals from 1 September 2023.[Excise Tariff Amendment (Tobacco) Bill 2024, clause 2; Customs Tariff Amendment (Tobacco) Bill 2024, clause 2]Customs Tariff Amendment (Tobacco) explanatory memorandum
The Bills identify two transitional indexation days, which are 1 September 2023 and 1 March 2024 (if the Acts receive Royal Assent on or after 1 March 2024). These are dates on which indexation would normally occur because the Tariff Proposals do not operate to amend the Excise Tariff Act or the Customs Tariff Act. In effect, the transitional provisions undo the indexation under the old (unamended) formula that happened on 1 September 2023 and replace it with indexation under the amended formula. The transitional provisions also anticipate an indexation that may occur on 1 March 2024 if the Bills have not commenced by that date by undoing any indexation under the old (unamended) formula that happens on 1 March 2024 and replacing it with indexation under the amended formula. The transitional provisions do not impose any further duty on 1 September 2023 or 1 March 2024 than is required to be remitted under the Tariff Proposals that apply from 1 September 2023.[Schedule 1 to the Excise Tariff Amendment (Tobacco) Bill 2024, item 5; Schedule 1 to the Customs Tariff Amendment (Tobacco) Bill 2024, item 4]Customs Tariff Amendment (Tobacco) explanatory memorandum
Context
Australia had already built a strong tobacco-control regime, including plain packaging, but smoking still remained the leading cause of preventable death and disability and the government had begun collecting higher tobacco import duties from 1 September 2023 under tariff proposals. This bill brought the law into line with those higher rates, locked in annual 5 per cent rises through 2025 and a staged change to loose-tobacco duty calculations, and it took full legal effect after Parliament passed it and Royal AssentThe final formal approval that turns the passed bill into an Act of Parliament. was given in July 2024.
Australia introduces plain packaging for tobacco
Senators cited Australia's 2012 plain packaging reform as part of the long-standing tobacco-control settings already in place before this bill.
Hansard ↗Higher tobacco import duties begin under tariff proposals
Speeches on the bill said an extra 5 per cent annual customs duty increase started from this date under earlier tariff proposals, alongside staged changes to align per-kilogram tobacco duty with cigarette-equivalent rates.
Hansard ↗Government introduces the bill to write the higher rates into law
The bill would legislate higher customs duty increases from 1 September 2023 and continue the extra 5 per cent rises for three years. The explanatory memorandum said transitional rules would stop lower indexation outcomes applying instead.
Explanatory memorandum ↗Parliament passes the bill
Both houses passed the bill in the same form, completing the parliamentary step needed to permanently replace the temporary tariff-proposal settings.
Parliamentary timeline ↗Royal AssentThe final formal approval that turns the passed bill into an Act of Parliament. makes the tobacco duty changes law
Royal AssentThe final formal approval that turns the passed bill into an Act of Parliament. turned the bill into an Act, giving full legal effect to the higher import duty schedule already being applied from September 2023.
Parliamentary timeline ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The bill reached this recorded parliamentary step.
Reported from Federation Chamber
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
The Governor-General gave Royal AssentThe final formal approval that turns the passed bill into an Act of Parliament., turning the bill into an Act.
Key criticism
The main criticism was that higher tobacco duties could backfire by pushing smokers into the black market, boosting organised crime and hurting legitimate small retailers without doing enough on their own to cut smoking. This case was raised most clearly by Coalition and One Nation speakers, while some members who still supported the bill also warned stronger enforcement and wider health measures were needed.
Criticism focused more on side effects and enforcement gaps than on rejecting the anti-smoking goal itself.
Higher taxes may expand the illicit tobacco market
Critics argued that lifting tobacco duties further would drive more smokers toward illegal or grey-market tobacco, handing more trade to organised crime and weakening the policy's health benefits if enforcement does not keep pace.
Law-abiding smokers and small businesses could bear the cost
Some speakers said the policy would fall hardest on poorer smokers and on legitimate retailers who obey the law, while illegal sellers gain an advantage. They argued this makes the measure unfair and incomplete if it is not matched by a tougher crackdown and broader quit support.
Further sources
Votes
The bill passed both chambers on the voices, so there is no list of individual Aye and No votes for final passage.
House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Senate agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Parliamentary debate
Start here — lead voices
Jones supports the bill, saying it raises customs duty on tobacco over several years and aligns the tariff treatment of different tobacco products so they are taxed more consistently.
Read in Hansard ↗Malcolm Roberts opposes the bill because he says a higher tobacco tax will push more sales into the black market and hand more business to organised crime.
Read in Hansard ↗Barnaby Joyce says he supports the bill, but argues higher tobacco taxes mostly punish poorer smokers while pushing more people into the illegal tobacco market.
Read in Hansard ↗Perrett strongly supports the bill and says it is part of Labor's fight against tobacco and vaping by lifting tobacco duties to deter smoking and protect young people from nicotine addiction.
Read in Hansard ↗All speeches by bloc
4 speakers · 4 support
“So today I'm pleased to support the Excise Tariff Amendment (Tobacco) Bill 2024 and the Customs Tariff Amendment (Tobacco) Bill 2024. These bills will increase the excise and customs duty on tobacco goods by five per cent per year for three years, in addition to the ordinary biannual indexation. These amendments cannot come soon enough when it comes to the scourge of vaping. Labor is taking on the tobacco industry so it cannot succeed in getting a new generation addicted to nicotine.”Read the full speech in Hansard ↗
“This Bill amends the Customs Tariff Act 1995 to raise the customs duty on excise-equivalent tobacco goods by 5 per cent each year for 3 years and to align the customs duty rate for tobacco goods subject to the 'per kilogram' rate with the customs duty rate applying to the average per stick tobacco content of cigarettes, progressively over 4 years. These amendments support the Excise Tariff Amendment (Tobacco) Bill 2024.”Read the full speech in Hansard ↗
“This bill amends the Customs Tariff Act 1995 to raise the customs duty on excise-equivalent tobacco goods by five per cent each year for three years and to align the customs duty rate for tobacco goods subject to the 'per kilogram' rate with the customs duty rate applying to the average per stick tobacco content of cigarettes, progressively over four years. These amendments support the Excise Tariff Amendment (Tobacco) Bill 2024.”Read the full speech in Hansard ↗
“These bills also align the excise and customs duty rate for tobacco goods subject to the per kilogram rate, with a duty rate applying to the average per stick tobacco content of cigarettes. This alignment will be implemented progressively over four years, from 1 September 2023, ensuring all tobacco products generally have equivalent tax treatment regardless of their form. These changes support the National Tobacco Strategy, in line with the government's aim of continuing to reduce tobacco consumption.”Read the full speech in Hansard ↗
4 speakers · 2 support · 1 oppose · 1 unclear
“I rise because, although we support these bills, there are a few things that I think we have to be aware of in this parliament. You can't keep putting up the tax on cigarettes and not believe that you're going to get a movement from legal, regulated cigarettes to unregulated cigarettes, and that's precisely what is happening.”Read the full speech in Hansard ↗
“Can I just say: organised crime is involved in this. They always just follow the money, and the simple way to do it is to take the incentive away. You take the incentive away by going after those illegal operators with very tough penalties, then you take away the market. Sadly, that hasn't happened, and that's what we're getting down in Victoria. I'll leave it there.”Read the full speech in Hansard ↗
“Increasing duties on tobacco also increases the end-cost of tobacco products. While these price increases typically reduce overall rates of smoking, they can also push customers to seek out black- or grey-market substitutes at a lower price. These increasingly punish small businesses who do the right thing and don't sell those illegal products. It is essential that this be countered through greater enforcement, and these issues prompted the creation of the Illicit Tobacco Taskforce under the previous coalition government of 2018.”Read the full speech in Hansard ↗
“Increasing duties on tobacco also increases the end cost of tobacco products. While these price increases typically reduce overall rates of smoking, they can also push customers to seek out black- or grey-market substitutes at lower prices. This increasingly punishes small businesses who do the right thing and don't sell illegal products.”Read the full speech in Hansard ↗
1 speaker · 1 support
“Fundamentally, it is the Greens' view that the government should not bank the income of this bill and save it for a rainy day. It is paramount that this funding is invested in supports for our community. While we're at it, it'd be great to get some more money for research, education, evaluation and other forms of healthcare cost-of-living relief by—and I make these suggestions quite often in this place—ending the currently supported tax cuts for billionaires and those corporations that receive subsidies from this government while burning down the planet. The Greens want the federal government, along with the states and territories, to invest these funds in public health care. I reaffirm that the Australian Greens will support this bill in the Senate.”Read the full speech in Hansard ↗
1 speaker · 1 oppose
“I must ask: how did Border Force fail to intercept 2.6 million kilograms of tobacco? Clearly this government has a problem enforcing the laws it already has. Now it wants to make matters worse. The vaping ban has already moved 87 per cent of vape users across to illegal vapes. While yesterday's brief moment of partial sanity will help that figure, it must surely be clear now that more taxation and prohibitions are futile and counterproductive. Here's a better idea: the government should spend less, tax less, and let everyday Australians and businesses get on with their lives.”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Referred to Federation Chamber
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
House · Reported from Federation Chamber
Reported from Federation Chamber
The bill reached this recorded parliamentary step.
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Senate · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Senate · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
Assent · Assent
Assent
The Governor-General gave Royal AssentThe final formal approval that turns the passed bill into an Act of Parliament., turning the bill into an Act.
