NSW Government Declares War on Illicit Tobacco and Vape Trade
The New South Wales government is taking drastic action against the black market for cigarettes and vapes, introducing new laws that will see commercial landlords face severe consequences if they knowingly allow their tenants to sell illicit products. Under the proposed legislation, property owners could be hit with fines of up to $165,000, sentenced to a maximum of one year in prison, or both.
New Offences and Landlord Responsibilities
The changes, set to be introduced to state parliament this week, will create a specific offence for landlords who fail to notify authorities or take steps to evict a tenant who is operating an illicit tobacco or vaping business from their premises. This forms part of a broader crackdown that has already seen the first stores shut down in Sydney's northern suburbs.
NSW Health Minister, Ryan Park, stated that the proposed penalties are the result of extensive consultation. He emphasised that the laws aim to strike a "fair and reasonable balance", acknowledging that most landlords are responsible while targeting the "bad actors" who undermine legitimate business and expose communities to criminal activity.
First Store Closures and Wider Crackdown
Last week, the government's new powers, which came into effect on 3 November, were used for the first time. Two stores in Sydney's north were closed for up to 90 days, with courts able to enforce closures of up to 12 months. Landlords are now empowered to terminate leases where such closure orders are in place.
Further legislative changes include a new offence for possessing a commercial quantity of illicit tobacco, carrying a maximum penalty of over $1.5 million and 7 years' imprisonment. Minister Park confirmed that store closures would continue regularly in the coming days and weeks, though he cautioned the public to "manage expectations" regarding the scale of the operation.
The Scale of the Problem and Federal Pressure
The NSW government admits it is uncertain how many unlicensed tobacco retailers operate in the state, with initial estimates around 19,000. According to NSW Chief Health Officer Kerry Chant, this figure likely includes former retailers who failed to deregister from the previous scheme.
A new tobacco licensing scheme, which began on 1 October after a three-month grace period, requires retailers to display a valid licence or face fines from $11,000 to $44,000. While about 4,500 retailers were initially licensed, Dr. Chant reported last week that this number had risen to approximately 6,000. She also revealed that one of the first two stores closed down did hold a licence, warning that "just because someone is licensed, you shouldn’t be complacent."
The crackdown addresses a significant financial issue, with the federal government facing a $3.3 billion hole in its finances due to declining legal tobacco excise. Premier Chris Minns and Minister Park have called on the federal government to lower the tobacco excise, which they identify as the "leading reason" for the boom in illegal tobacco use. However, Federal Treasurer Jim Chalmers has rebuffed these calls, stating he does not believe the solution is to make cigarettes cheaper.
