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Speaker 1: From the Australian. Here's what's on the front. I'm Claire Harvey.

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Speaker 1: It's Monday, September eighth, twenty twenty five. Mushroom killer Aaron

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Speaker 1: Patterson will be sentenced on Monday for the murders of

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Speaker 1: three elderly relatives and the attempted murder of one man

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Speaker 1: at a family lunch in twenty twenty three. The sentencing

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Speaker 1: by Justice Christopher Beale will be broadcast live, in a

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Speaker 1: first for the Victorian Supreme Court. You can tune in

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Speaker 1: live at the Australian dot com do AU. China's interference

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Speaker 1: in Pacific Island politics has reached a new high, with

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Speaker 1: fresh allegations in The Australian Today about how Beijing ordered

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Speaker 1: a rogue Solomon Islands MP to be frozen out of

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Speaker 1: the government. That's after the Solomon signed a secretive security

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Speaker 1: pact with China.

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Speaker 2: That exclusive is live now.

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Speaker 1: Banks and a powerless to stop billions of dollars in

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Speaker 1: black money from the illegal tobacco trade being sent to

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Speaker 1: overseas crime gangs. Within minutes of a pack of illegal

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Speaker 1: cigarettes being sold at a tobacconist or convenience store on

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Speaker 1: Australian streets, the money is transferred overseas. That's just one

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Speaker 1: element of a big investigation into the illegal tobacco trade

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Speaker 1: launching in the Australian today. The black market is booming

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Speaker 1: because of government moves meant to help people kick smoking. Today,

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Speaker 1: How this policy mistake turned into a crime disaster and

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Speaker 1: can it all be unraveled. Sarah Eisen is a senior

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Speaker 1: political reporter with The Australian. Sarah, I was at the

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Speaker 1: service station the other day and there was a trader

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Speaker 1: in the queue in front of me. He bought a

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Speaker 1: packet of cigarettes and two large bottles of water and

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Speaker 1: it was seventy dollars. That was without any petrol. Who

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Speaker 1: is paying for legal sea garettes anymore?

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Speaker 3: I had this same thought, Claire, what I was buying

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Speaker 3: a pack of cigarettes, not for myself, but because I

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Speaker 3: had bummed a few cigarettes off a mate, And I thought,

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Speaker 3: you know what, I actually want to want to do

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Speaker 3: this for a mate. It's going to help him out.

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Speaker 3: It was back when you actually could still buy forty packs,

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Speaker 3: which is broadly not even doable now, and I couldn't

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Speaker 3: believe it. My eyes were popping out of my head. Basically,

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Speaker 3: as the guy behind the register said yep, that'd be

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Speaker 3: one hundred bucks, and I could not believe it. Now

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Speaker 3: you might be listening to this and wondering if I've

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Speaker 3: been taking for a ride. I too, am still wondering that, but.

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Speaker 2: I hope your friend appreciate it. Yeah.

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Speaker 3: I think my friend transferred me money very quickly when

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Speaker 3: he realized what I'd done. It is insane when you're

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Speaker 3: looking at just how much cigarettes have increased in price.

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Speaker 3: It's sort of fifty bucks twenty five bucks for some

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Speaker 3: twenty packs. It's insane when they used to be more

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Speaker 3: in their twenties, twenty dollars, thirty dollars sort of thing.

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Speaker 3: And this has been a huge increase since twenty ten,

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Speaker 3: when we first saw excises come in twenty five excise

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Speaker 3: at that time, and then every year they've just gone up.

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Speaker 3: We just had an eight percent increase on Monday, just

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Speaker 3: bin and so you're just seeing consistently the price of

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Speaker 3: cigarettes go up, while at the same time, on the

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Speaker 3: black market you can buy a cigarette packer for as

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Speaker 3: low as thirteen dollars for a twenty pack, so it's

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Speaker 3: a huge discrepancy. Now that means that we're just seeing

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Speaker 3: a complete exodus of the legal market by consumers to

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Speaker 3: the black market.

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Speaker 1: Let's step back in time a little bit to the

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Speaker 1: Gillard government. Health Minister Nicola Roxton, to kind of global

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Speaker 1: acclaim from health professionals, introduced plane packaging legislation.

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Speaker 3: This is the first, very courageous step that our Parliament

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Speaker 3: has taken to introduce plane packaging. We're going to be

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Speaker 3: the first country around the world to introduce it. And

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Speaker 3: the first of January is the start date.

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Speaker 1: That meant that cigarettes suddenly had to be packaged in

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Speaker 1: ugly gray green packets that we've all seen, and they

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Speaker 1: had to be kept behind the counter.

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Speaker 2: It was a way to discourage people from smoking.

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Speaker 3: Australia has scored a world first following the approval last

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Speaker 3: night of new laws to introduce plane packaging for cigarettes.

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Speaker 1: And at the time it sort of seemed like the

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Speaker 1: government was being a bit selfless. It's like, look, we're

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Speaker 1: going to fall go some tax revenue here. We think

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Speaker 1: that this will encourage people to stop smoking. That's good

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Speaker 1: for everybody because they don't then cost a huge amount

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Speaker 1: of money in healthcare. How has it gone so wrong

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Speaker 1: since then?

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Speaker 3: It's just that increase of the excise you've just seen

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Speaker 3: the difference between the price of allegal pack and an

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Speaker 3: illegal pack just yawn, and then that be exploited by

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Speaker 3: crime gangs. We've seen, of course, fire bombings across particularly Victoria.

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Speaker 3: As you're seeing crime gangs see what is really a

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Speaker 3: golden opportunity for them to import much cheaper cigarettes from

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Speaker 3: overseas and sell them at a much lower rate. To

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Speaker 3: the tune of five billion dollars a year is what

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Speaker 3: that black market is now worth. It's just the money thing.

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Speaker 3: And particularly we've heard those few words in the recent

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Speaker 3: years of cost of living crisis. We've heard that again

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Speaker 3: and again over the last five years or so. So

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Speaker 3: it's that price difference that is really pushing consumers to

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Speaker 3: go to the black market. And we've gone from seeing

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Speaker 3: you know, more than six billion dollars collected in taxes

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Speaker 3: from the excise just five years ago to that figure

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Speaker 3: being about seven billion in the last budget. So it's

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Speaker 3: really hit a tipping point that some experts say we're

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Speaker 3: very close to never being able to reverse. Some say

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Speaker 3: it's already too late. So it's a really really huge issue.

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Speaker 1: Tipping point is a great phrase because the excise reaches

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Speaker 1: a point where it is just ridiculous to be paying

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Speaker 1: one hundred dollars or fifty dollars for a packet of cigarettes.

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Speaker 1: And then what's happened on the other side is that

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Speaker 1: the barrier to buying something on the black market has

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Speaker 1: gone down because presumably the shame or the scariness of

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Speaker 1: buying something from a black market seller isn't that big,

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Speaker 1: when in fact, the black market seller is a convenience

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Speaker 1: to it.

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Speaker 3: Absolutely. It's not someone in a parking lot, it's not

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Speaker 3: someone dodgy, it's not someone who even makes you feel

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Speaker 3: like you're doing the wrong thing. These are convenience stores.

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Speaker 3: And you see states trying to figure out how to

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Speaker 3: tackle this problem in different ways. Queensland and New South

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Speaker 3: Wales recently have tried to say to landlords, if we

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Speaker 3: find that in your building there are people running convenience

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Speaker 3: stores that are selling these black market products, you will

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Speaker 3: be fined, you will be pinked. The problem with that

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Speaker 3: is that we're seeing all this haphazard legislation across the country,

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Speaker 3: not a unified response. So when Queensland introduces some laws,

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Speaker 3: New South Wales quickly goes, oh my goodness, if they

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Speaker 3: do that, we're going to have this huge influx of

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Speaker 3: black market operators into our state, and so you're seeing

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Speaker 3: legislation at different rates. You're seeing, as I said, fire

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Speaker 3: bombing in different cities where you have crime gangs fighting

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Speaker 3: for control over this lucrative market, and then broadly a

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Speaker 3: normalization of buying black market cigarettes across the consumer base

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Speaker 3: because it's just becoming so common, mostly due to that

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Speaker 3: huge discrepancy in costs between black market and legal cigarettes.

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Speaker 1: The fact that organized crime has taken an interest in

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Speaker 1: this business opportunity is a big part of the issue, right,

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Speaker 1: Like you can't really expect a landlord to take on

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Speaker 1: whichever crime gang it is who happens to be selling

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Speaker 1: cigarettes in his or her apartment building. So who is

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Speaker 1: actually profiting from this illegal trade?

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Speaker 3: Now? Well, yeah, you have these big crime gangs. You

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Speaker 3: have names like kaz Hamad, and people would know of

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Speaker 3: this big crime boss in Melbourne, most recently because he

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Speaker 3: was allegedly involved in the firebombing of the synagogue in

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Speaker 3: Melbourne and that was orchestrated by Iran. Police have declared

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Speaker 3: a fire bombing attack on the Israel Synagogue in Melbourne

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Speaker 3: Southeast last week as a likely terrorist incident. Our world

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Speaker 3: class agencies will provide all the support necessary to find

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Speaker 3: the perpetrators.

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Speaker 4: And ensure they face the full force of the law.

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Speaker 3: So you're seeing even some links between these crime bosses

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Speaker 3: are being propped up through black market cigarettes and terror

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Speaker 3: attacks and foreign actors. It just gets bigger and bigger

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Speaker 3: and bigger. And what we're hearing from cops is that

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Speaker 3: what started as one of the biggest health issues facing

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Speaker 3: the country regarding smoking and smoking rates and the health

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Speaker 3: burden because of that, is quickly turning into the biggest

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Speaker 3: crime issue that the country has ever.

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Speaker 1: Faced coming up. So is smoking actually going down? That's

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Speaker 1: after the break so Sarah, Now practically cigarettes are cheaper

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Speaker 1: than they've been in decades and it's not scary for

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Speaker 1: me to go and buy some from a convenience store

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Speaker 1: that's selling them illegally. Has that undermined the health reform?

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Speaker 2: Here? Are smoking rates now not going down anymore? Suppose?

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Speaker 3: It's hard to say because a lot of the rates

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Speaker 3: that we do broadly see is based off what is

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Speaker 3: being legally bought and reported, right, So that's a difficult

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Speaker 3: thing to keep track of. There's plenty of data that

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Speaker 3: government's good point to showing the legal purchase of cigarettes

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Speaker 3: going down, and so the prevalence of smoking must be

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Speaker 3: going down, whereas tracking illegal smoking or smoking through illegal

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Speaker 3: means this black market much much more difficult to track.

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Speaker 3: Roy morgan survey was anonymized. It was really widespread and

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Speaker 3: from its point of view, from Roy Morgan's point of view,

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Speaker 3: based on the people who responded, and again it was anonymized,

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Speaker 3: was the key thing there. Smoking rates that have now

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Speaker 3: remained static over the past decade, so we've seen any

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Speaker 3: gains that could have been made due to the maybe

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Speaker 3: smaller increases in costs per packet now reversed because of

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Speaker 3: people having a different place to go and to buy

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Speaker 3: those cheaper packs of cigarettes.

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Speaker 1: Big Tobacco's role is very interesting in this. Of course,

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Speaker 1: they fought very hard to resist the plane packaging legislation

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Speaker 1: and their argument at the time was we're very happy

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Speaker 1: for people to give up smoking.

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Speaker 2: Of course we support that, but the.

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Speaker 1: Risk is here that illegal operators will come in and

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Speaker 1: create a black market.

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Speaker 2: That has now come true.

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Speaker 1: In the meantime, the tobacco firms have pivoted their business

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Speaker 1: model to vapes and are very actively pushing those.

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Speaker 2: How do they fit in now that we're in this

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Speaker 2: diabolical situation.

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Speaker 3: Yeah, I think you've described that well. It almost feels

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Speaker 3: like a boy who Cried Wolf situation. The huge tobacco condomerates.

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Speaker 3: We're saying for years, don't regulate us too hard, don't

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Speaker 3: make our product too expensive, or you're going to create

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Speaker 3: a black market, which is a convenient excuse or argument.

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Speaker 3: It's come to fruition, which is interesting. But at the

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Speaker 3: same time you have also seen the proliferation of as

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Speaker 3: you said, that second range of products of the vapes.

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Speaker 3: In Australia, we've been trying to keep up with the

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Speaker 3: proliferation of vapes, particularly with how many kids are taking

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Speaker 3: up vapes and what to do there, and that's being

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Speaker 3: treated almost as a separate policy because of how much

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Speaker 3: children have been attracted to those bubblegum flavors and so on.

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Speaker 4: The federal government will introduce tough new vaping legislation today.

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Speaker 4: The new laws would see pharmacies become the sole trader

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Speaker 4: of products in a bid to tackle the rapid rise

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Speaker 4: in vaping among young people.

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Speaker 3: So the government has been focusing on vapes quite a lot.

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Speaker 3: We've probably seen them talked about much more in recent

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Speaker 3: years up until maybe this year compared to analog cigarettes

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Speaker 3: as you'd call them. But now we're really exciting to

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Speaker 3: see the cigarette problem come back into the debate in

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Speaker 3: a big way, because, particularly in March, there was this

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Speaker 3: huge moment where you saw just how much less was

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Speaker 3: being collected through the tobacco Excise and that moment was

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Speaker 3: really an eye opener for governments which have been focused

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Speaker 3: really really hard on the vapes inarticular to looking at

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Speaker 3: the whole system again because of what seems like an

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Speaker 3: exodus of consumers outside of the legal markets and really

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Speaker 3: flocking to the black market for analog cigarettes.

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Speaker 2: Can this be unraveled now in a policy sense, can

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Speaker 2: the government do anything to fix this situation?

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Speaker 3: The government is being called upon by some state premiers,

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Speaker 3: New South Wales' Premier Chris Mins specifically to pause the excise. Essentially,

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Speaker 3: this policy is what is creating the problem to at

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Speaker 3: least some degree. A lot of people are saying please stop.

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Speaker 3: It is really the message stop increasing them at this rate.

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Speaker 1: Here's something you probably thought the premier would never say

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Speaker 1: cigarettes should be cheaper. He's not encouraging smoking, but he

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Speaker 1: is fed up battling the boom in illegal tobacco. Chris

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Speaker 1: Mins says, as it stands, police are being taken off

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Speaker 1: major investigations to crack down on tobacco crime.

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Speaker 2: The current situation is intolerable.

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Speaker 1: The massive increase has exploded the illicit tobacco marketplace.

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Speaker 3: The government has not agreed to that or seemed even

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Speaker 3: very open to having that conversation. Now it would be

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Speaker 3: almost political kryptonite to, let's say, reverse an excise, to pause, though,

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Speaker 3: I mean, it's something that people are wanting just to

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Speaker 3: feel like we're not pouring fuel on a fire. Outside

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Speaker 3: of that, though, Queensland is also calling for the federal

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Speaker 3: government to do more. But in their case, they feel

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Speaker 3: like our borders are just not being patrolled and protected

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Speaker 3: enough by the Australian Border Force, which is a federal

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Speaker 3: government responsibility, and so they want way more money, resources,

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Speaker 3: funding put into that particular measure. The federal government will

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Speaker 3: point to the fact that they've put in three to

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Speaker 3: four hundred million in the past few years into things

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Speaker 3: like the ABF and policing and so on. But you

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Speaker 3: have experts who point out that for a five billion

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Speaker 3: dollar a year black market, that is a drop in

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Speaker 3: the bucket, and that is simply not going to address

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Speaker 3: the problem. And so for the more pessimistic of those

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Speaker 3: out there, there's definitely a sense of this is now

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Speaker 3: too late. There's no putting the journey back in the bottle.

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Speaker 3: Those who think there might still be something we can

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Speaker 3: do when we pause the exercise or do other things

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Speaker 3: like that are still warning that we're getting very close

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Speaker 3: to that point of no return.

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Speaker 2: Sarah Eisen is a senior political reporter with The Australian.

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Speaker 2: Thanks Sarah, cheers.

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Speaker 1: You can read this investigation, led by Sarah and our

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Speaker 1: reporter Muhammad Alpharez, right now at the Australian dot com

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Speaker 1: dot au