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Wednesday, 24 August 2011
Page: 9163


Dr SOUTHCOTT (Boothby) (10:52): I rise to speak on the Tobacco Plain Packaging Bill 2011 and the Trade Marks Amendment (Tobacco Plain Packaging) Bill 2011. Despite the way the Minister for Health and Ageing has portrayed this issue, I would like to state from the outset that the coalition has always supported sensible measures to reduce the rate of smoking in Australia. The coalition therefore supports plain packaging and the public health intent behind this proposal. The coalition will be supporting the plain packaging bills at the second reading stage.

I would like also to remind the House of the strong track record the coalition has with regard to reducing smoking rates in Australia. Robert Menzies first introduced a voluntary tobacco advertising code for television in 1966. It was the Fraser government in 1976 that first implemented a ban on the advertising of tobacco products on TV and radio. In May 1989 the Parliamentary Joint Committee on the National Crime Authority, comprising representatives from all major political parties, unanimously recommended to parliament that tobacco advertising be completely banned.

In opposition, the Liberal Party supported the prohibition on tobacco advertising in 1992. Dr Michael Wooldridge announced as health minister in June 1997 what, at the time, was the biggest ever national advertising campaign against smoking, with a federal government spend of $7 million over two years. It was the Howard government that reformed cigarette taxation from a weight basis to a per stick basis as part of the New Tax System in 2000. This was a recommendation of many health organisations at the time—ASH, the Cancer Council and the peak health bodies. It is something that I personally pushed for within the Howard government.

Under the Howard government Australia signed the Framework Convention on Tobacco Control in December 2003 and ratified this in October 2004. As Chair of the Joint Standing Committee on Treaties I supported the ratification of the framework convention. The committee in its recommendations stated:

The FCTC will have a positive effect on public health within Australia, and enhance Australia's leadership role in relation to tobacco control internationally.

It was the Howard government, and Tony Abbott as health minister, who introduced the graphic health warnings on tobacco products in 2006. This constituted warnings of 30 per cent on the front of the pack and 90 per cent on the rear of the pack. These are the same graphic health warnings that the government is now expanding. In opposition it was the coalition who first proposed an increase in the tobacco excise in May 2009 a measure later adopted by the government. As recently as this year the coalition supported an amendment to the Tobacco Advertising Prohibition Act to facilitate the banning of tobacco advertising on the internet. The results are there for all to see.

The coalition presided over the biggest declines in smoking rates whilst in government. Under the coalition government the prevalence of smoking declined from 21.8 per cent in 1998 to 16.6 per cent of Australians over the age of 14 by 2007. This was amongst the lowest rates of smoking in the world. The decline in smoking rates in Australia—a fall of 40 per cent for men and 44 per cent for women between 1989 and 2007—was among the biggest in the OECD. The fall in smoking rates amongst women was the biggest in the OECD. Only Sweden and the United States have lower smoking rates than Australia. It is worth noting that at a time when Australia's smoking rates have been decreasing several European countries such as France and Germany have seen rises and Greece has seen a dramatic rise in smoking rates during the same period. So the message is: it is not all one-way traffic, there is no cause for complacency.

But the suggestion that the coalition is soft on tobacco companies is just plain nonsense. Most public health experts in Australia understand that tobacco control has been a bipartisan affair in Australia for a long time. It should be a national goal to see the smoking rates in Australia fall below 10 per cent. I agree with the Preventive Health Task Force of 2009 which suggested this as a goal. This goal has been adopted by COAG.

Australian researcher Melanie Wakefield has produced a number of research papers on plain packaging and its impact on consumer choice and consumer perceptions. Dr Wakefield's research has shown that tobacco packets with increasingly fewer brand design elements are perceived increasingly unfavourably. I believe that plain packaging will have an impact on the smoking rates within Australia. I believe it will reduce the number of people who take up smoking and it will increase the number of people thinking of quitting to take the next step and give it up for good. It is supported by the public health research.

On tobacco control more broadly, it is very clear that for tobacco control to be successful it needs to be part of a comprehensive tobacco control strategy. There is no silver bullet. California demonstrates what a concerted tobacco control strategy can achieve. Its current smoking rates are below 10 per cent. I have looked extensively at the research on the effects of plain packaging and the effects of graphic health warnings on consumer choice and behaviours. There is no doubt that plain packaging will have some impact on smoking rates and there is no doubt that increasing the graphic health warnings will have some impact. In fact, increasing the graphic health warnings is a measure that I support. My reading of the research is that increasing the graphic health warning on the front of the packet from 30 per cent to 75 per cent will have a much larger impact on reducing the smoking rate in Australia than plain packaging itself will. After all, when more than 80 per cent of the front and back of the cigarette package is graphic health warning and less than 20 per cent is plain packaged in drab brown what is having the greater impact on your eyeballs? We must remember that plain packaging is only one tool in the armoury in the push to reduce smoking rates in Australia. I want to turn to concerns with the bill. There are broadly three concerns which have been raised with the bill before us. There have been issues raised as to the legal grounds of this proposal, there have been comments made as to the impact on small business and small retailers, and there have been comments made as to the effect of plain packaging on illicit and counterfeit tobacco. I would like to briefly address these issues.

Firstly, on the legal issues, there has been much discussion as to the impacts of the plain packaging proposal on intellectual property rights and the use of trademarks. The minister's office has on many occasions assured the opposition that its legal advice surrounding their plain packaging proposal is robust and that they are on strong legal ground. We have accepted the government's assurance on face value. We have had to accept the government's assurance on this, as they have refused to release or provide us with a copy of their legal advice. It is, however, interesting to note that, despite claiming that they are on strong legal ground, they have drafted a 'get out of jail free' clause into the Tobacco Plain Packaging Bill. The government claims that the bill has been drafted so as to avoid any potential for any acquisition of property on other than just terms, because to do so would be contrary to section 51 of the Constitution. However, the government must not be too confident in their drafting skills, as clause 15 of the bill provides that the bill would not apply to the extent that it would cause acquisition of property on other than just terms. What this means is that if this act is found to constitute acquisition of a tobacco company's trademarks on other than just terms then those trademarks can again be used but their size and location will be governed by the regulations.

There have also been concerns raised that the government's proposal may violate article 20 of the TRIPS agreement and/or the 1993 Australia-Hong Kong investment treaty. Mr Chris Reid, the general counsel for the Department of Health and Ageing, stated during the House of Representatives Standing Committee on Health and Ageing's public hearing:

… we are confident that, should proceedings of that kind be taken, we would expect to win those proceedings.

Once again, I would like to make it clear that we have accepted Minister Roxon's assurances that the government stands on strong legal ground with regard to these issues.

I would like to turn to the impact on small retailers. One of the main reasons that plain packaging has not been adopted in any other jurisdiction has been the concerns of small retailers. The government's consultation of small business and especially small retailers has been lacklustre at best. Simon Cotterell, the assistant secretary of the tobacco control task force in the Department of Health and Ageing, stated during the health and ageing committee's public hearing:

… we have agreed to meet and discuss this legislation with any retailer or retail organisation that has approached us.

Unfortunately, you would have thought that, considering the expected impact on retailers, the department would have been a little more proactive in consulting with them. It is really easy to sit back and say, 'This is what we're doing; come and complain.' It was obviously too much effort to engage with small business and small retailers. It was too much effort to be proactive in the government's consultation of small retailers. Mr Cotterell also went on to say during that hearing that he was not aware that the minister had personally conducted any consultations with small business, and it seems as if this has been left entirely to the department. In fact, until the opposition started asking questions about this in estimates, the government maintained that its consultation with small retailers had been conducted by the Preventative Health Taskforce back in 2009—not even by the government itself. It was only when the coalition started asking questions about this in Senate estimates that the department actually went out and started consulting with small business.

Based on the concerns raised by small business during the coalition's consultations, the coalition will be moving an amendment to the Tobacco Plain Packaging Bill. This amendment seeks to address some of the concerns raised by small business and small retailers—the same concerns which have fallen on the deaf ears of this government. The Department of Health and Ageing have treated the concerns of small business as not core business for them. They have really been blind to the issues regarding small business and counterfeit tobacco, and the minister has been deaf to them. It seems as if the government have lumped these issues into the 'too hard' basket. The coalition's amendment seeks to allow the use of a tobacco company trademark on one of the two smallest outer surfaces of a cigarette carton. It is intended that this will aid in the stock management concerns of retailers without undermining the public health impact of the plain packaging proposal. Cartons of cigarettes are used almost exclusively in retailers' storerooms and, with the exception of duty-free stores at airports, are almost never on public display. Cartons of cigarettes are very rarely purchased by consumers, and they are not carried around by consumers. It is hoped that this measure will go, at least in some small way, to helping retailers who will be inconvenienced by this measure.

Turning to the issue of counterfeit tobacco, while Australia is generally seen as a country which has a low rate of illicit and counterfeit tobacco, there are concerns that plain packaging may increase the rate of illicit and counterfeit tobacco. The Australian Customs and Border Protection Service annual report shows that over the last three years it has seized 743 tonnes of tobacco and 217 million cigarettes. The 2010 National Drug Strategy household survey report run by the Australian Institute of Health and Welfare and released last month claims that illicit tobacco in Australia is smoked regularly by 4.6 per cent of smokers. The World Health Organisation Framework Convention on Tobacco Control recognises that illicit tobacco is a public health concern. I do not for a minute accept the claims which have been made by the tobacco companies on the levels of chop-chop, illicit or counterfeit tobacco that we may see under this proposal; however, I do feel that the government has not adequately addressed this issue. The minister has always been quick to point out that Australia was the first signatory to the framework to implement the WHO recommendation for plain packaging. What the government never says is that Australia signed the WHO Framework Convention on Tobacco Control during the Howard government years, in 2003. Turning to the point of illicit tobacco, this is really the blind spot in the government's proposal. The government are inexplicably silent on the fact that article 15 and article 20 of the WHO framework recommend implementing a track-and-trace regime for tobacco products and strengthening the legislation against illicit trade in tobacco products. This is something that the government have just not done.

The Department of Health and Ageing have regarded this as too difficult; they have not addressed it properly. They have not made any reasonable attempt to actually deal with the issue. Articles 7.2 and 7.12 of the Draft Protocol to Eliminate Illicit Trade in Tobacco Products, as published by the World Health Organisation, also states that the obligations of each party of the FCTC shall not be performed by or delegated to the tobacco industry. Unfortunately, the government have completely ignored the WHO recommendations on the control of illicit tobacco, and as their own plain packaging of tobacco products consultation paper states, on page 14, they are proposing that any alphanumeric code markings can be used by tobacco companies on a voluntary basis. Not only is the scheme not compulsory but it runs contrary to World Health Organisation best practice in this area, and it runs explicitly against the World Health Organisation recommendations that you do not put the anti-counterfeit measures in the hands of the tobacco industry.

WHO recommends that you do not put any track-and-trace measures in the hands of the tobacco industry. Even the tobacco companies requested, during their consultation with the government, that a unique alphanumeric code on each pack be generated by a government-endorsed and licensed machine, a suggestion which the government subsequently rejected. The opposition calls on the government to implement a neutral track-and-trace system for tobacco products. This scheme could be managed by the Australian Customs and Border Protection Service in conjunction with the Australian Taxation Office. Along these lines, the House of Representatives Standing Committee on Health and Ageing, on page 18 of their report on these bills, noted that there were:

… a range of sophisticated anti-counterfeiting measures which could be adopted.

So the opposition offers this as a constructive suggestion to the government and encourages the government to this. Do what the framework says; do not put your counterfeit measures in the hands of big tobacco but actually establish a neutral track-and-trace scheme. Look at what is done in California, in Massachusetts and in Canada. They are all jurisdictions which have an excellent reputation in the public health area. We encourage the government to move towards this because it is not good enough to implement plain packaging without having the counterfeit and illicit side squared off.

In turning to the House of Representatives inquiry into these bills, these bills were referred off to the House of Representatives Standing Committee on Health and Ageing with a wide-ranging brief to inquire into them. They were sent to this committee with an exceptional wide-ranging brief to avoid having to refer these bills to three different committees. The coalition did not want to hold up or delay this legislation, and that is why we did this. It is disappointing to note that the committee paid very little attention, none really, to the issues I have raised earlier: the issues of the impact on small business, the legal standing, the IP issues and the issues around counterfeit and illicit tobacco. There was really no consideration of these. The committee focused solely on the health impacts of this bill, which are not the subject of any dispute or disagreement. Even the chair of the committee has suggested that there were issues that needed dealing with by other committees, and these are the same issues that the minister has ignored.

What it comes down to is that it is really like an old-style Labor trade union demarcation dispute. They are saying, 'Look, it's not health; we will not deal with it.' It is really disappointing that the House committee has not done its job here. Let us be very clear: this is a health bill. The Minister for Health and Ageing has carriage of it. All of the material has been prepared by the Department of Health and Ageing. They have prepared the exposure draft and the discussion papers. The notion that it needed to be sent to three committees to get to the bottom of the legal, IP, small business and counterfeit issues is just a cop-out, but it is consistent with the approach that the government has taken from the very top, from the minister and from the Department of Health and Ageing. If the Department of Health and Ageing are competent to conduct the consultation with small business and to address the counterfeit, IP and legal issues then I think the health committee could have given this a go.

From opposition I am not sure how robust the government's interdepartmental committees are or how robust the cabinet system of government is, because this was a bill that needed input in lots of different areas. It is fair to say that even members of the government feel that there have been times when the normal processes of government have ceased to function with this government. In this case, it will be small business who have not been listened to by this dysfunctional government.

I want to touch briefly on the minister's conduct. It is disappointing, again, that the minister has sought to politicise the issues surrounding plain packaging and tobacco control for her own political gain, rather than taking an approach where the nation's health interests were at its core. She seems to have the attitude that no-one took any interest in tobacco control before she came along. If the minister had spent 10 per cent of the time that she spent talking about the coalition competently and properly implementing this proposal then we would be in a much better position today. The Minister for Health and Ageing has taken the attitude that if you do not agree with her 100 per cent then you must be in the pockets of the tobacco companies. This is puerile. Let us be clear: this is the first opportunity the opposition have had to vote on this issue, and we will be supporting the bill at the second reading stage.

The minister has had a lot to say about the coalition but has been silent on her own relationship with big tobacco. What we now know is that her own relationship with big tobacco was much closer and cosier than anyone ever realised. The minister has never fully disclosed to parliament the extent to which she was involved with big tobacco. It was not all that long ago that she was going to the football as a guest of Philip Morris, and she has never been up front to the parliament about that. In the minister's Register of Members' Interests she has declared a number of football matches she has attended, but she has never declared the one she attended as a guest of Philip Morris.

I would like to turn now to the drafting of these two bills. Given that the government have had more than two years since they first received the Preventative Health Taskforce recommendation to implement plain packaging, there has been no shortage of time to draft these bills. Considering that the government have, from the outset, claimed that they expected this proposal to be the subject of legal challenges, I would have thought that every possible care and attention would have been paid to the exact and proper drafting of these pieces of legislation. They released their exposure draft in April of this year, almost two years after the Preventative Health Taskforce handed down its recommendations.

The Senate Standing Committee for the Scrutiny of Bills have reported on both of these bills, and I would like to take a moment to inform the House of their findings. In brief, they found a lot of problems with the drafting of these bills. The committee has pointed to clause 27 in the Tobacco Plain Packaging Bill 2011 as potential inappropriate delegation. There was a concern from the committee that too many of the important details regarding the plain packaging proposal have been left to the regulations, rather than being included in the primary legislation. There was also concern raised that the various penalties in chapter 3 part 2 of the Tobacco Plain Packaging Bill 2011 may be considered to trespass unduly on personal rights and liberties due to the strict liability nature or the fact that the onus of proof has been placed on the defendant for certain elements of the offence. Thirdly, clause 83 of the Tobacco Plain Packaging Bill 2011 partially abrogates the longstanding principle that there is a privilege against self-incrimination. The committee was concerned that the public benefit which is to be achieved may not decisively outweigh the resultant harm to the maintenance of civil rights. Finally, the Senate Scrutiny of Bills Committee also pointed out the presence of a Henry VIII clause within the Trade Marks Amendment (Tobacco Plain Packaging) Bill 2011—the second bill.

I would like to make some specific comments on the Trade Marks Amendment (Tobacco Plain Packaging) Bill. The first we saw of this bill was when the minister introduced it into the House on 6 July. It was not flagged or issued as part of the government's exposure draft or consultation paper. This is a bill which, until 6 July, was not seen as necessary by the Department of Health and Ageing or the minister. On this specific bill the opposition has four simple questions for the minister. When did she realise that there were problems with her Tobacco Plain Packaging Bill that were in the exposure draft from April? What were the problems that were identified with the exposure draft? The third question is: why did she decide not to draft legislation which trumped regulation in the normal way as has been done by every other minister since Federation? And, fourthly: is the purpose of the bill to clarify the interaction between the bill and the Trade Marks Act, as said by the Department of Health and Ageing's submission to the inquiry, or is it so the government can quickly remedy any unintended interaction between the new Tobacco Plain Packaging Act and the Trade Marks Act, which is in the EM, or is it to ensure that applicants for trademark registration and registered owners of trademarks are not disadvantaged by the practical operation of the plain packaging act—again in the explanatory memorandum—or is it, as the minister said in her press conference of 17 August, that it is an important component of making sure that the trademarks are still able to exist?

The Trade Marks Amendment (Tobacco Plain Packaging) Bill has been referred to the Senate Standing Committee on Legal and Constitutional Affairs to consider the specific provisions within this bill, any issues they create and, ultimately, their constitutionality. The bill, as I said, contains what is known as a Henry VIII clause; it is in section 231A of the amendment. It is a clause that allows for regulations made by the minister under an act of parliament to override the act itself. In this situation, regulations under the Trade Marks Act could override the Trade Marks Act. It is exceptionally uncommon, and it goes against the basic legal principle that an act trumps regulations. These clauses are exceptionally rare, and only used as a last resort when there is no other option. That is not the case in this situation. The minister did have an alternative and the Department of Health and Ageing had an alternative: they could have drafted the Tobacco Plain Packaging Bill properly. The coalition does not believe that this second bill is necessary for the government to implement their plain packaging. We think that this second bill is a sign that the government have botched the drafting of this bill. If the minister had taken the time to draft the Tobacco Plain Packaging Bill properly, the trademarks amendment, using an extraordinary power, would not be needed. It is for these reasons that the coalition cannot support the Trade Marks Amendment (Tobacco Plain Packaging) Bill. It goes against longstanding parliamentary convention and legal principles.

Government speakers on these bills may use the precedent of a similar amendment to the Trade Marks Act back in 2000—to implement the provisions of the Madrid protocol—to argue that the current trademarks amendment bill before this House should be supported. This was the last time I am aware of that a Henry VIII clause was used in this parliament. I would like to take the time to differentiate its use back then from the current situation before the parliament. The Trade Marks Amendment (Madrid Protocol) Bill 2000 was drafted to implement an international protocol: the Madrid protocol. It was a treaty to protect the rights of trademark owners, and it had a clearly defined purpose. My understanding is that it was used in this situation because there was no other alternative to implement our obligations under the international protocol. This plain packaging situation is completely different. The minister could have protected these rights by drafting her original bill properly. This is the reserve parachute—the escape hatch—if the minister has bungled the original bill. Hypothetically, this bill could be used to amend, to protect or to extinguish trademark rights for tobacco products, if the minister so chose. The department itself has said it is for 'any unintended consequence'. This is not a power we are willing to give this government. I reiterate that the coalition supports the plain-packaging proposal and the public health intent behind it. We will be moving an amendment to the legislation. But we cannot support the second bill because the principle that legislation trumps regulation should be upheld. (Time expired)