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Wednesday, 22 August 2012
Page: 9687


Mr TEHAN (Wannon) (10:43): No; I am the member for Wannon, Mr Deputy Speaker. I am sure the member for Aston is busy somewhere working on behalf of his constituents—he being a very dedicated, hardworking local member.

Mrs Griggs: He is, just like the member for Wannon.

Mr TEHAN: It is very kind of my dear friend the member for Solomon to say that I am a dedicated hardworking member. Thank you. Later in life I might be delighted to use that as a reference, because the member for Solomon does a fantastic job on behalf of her constituents. I do not think there has been a harder working local member for the Northern Territory in all the time of the federal parliament.

The DEPUTY SPEAKER: The member for Wannon might choose to address himself to the bill before the House.

Mr TEHAN: The member for Solomon is doing a great job. So it is fantastic to get that endorsement from her. I rise today to speak on the Customs Amendment (Smuggled Tobacco) Bill 2012, which, as stated by the shadow minister, the coalition supports. The process of the bill getting to this place sums up the Gillard government. There is a proper way to do things, there is a proper way to implement, there is a proper way to create laws; and then there is the Gillard government way. It is almost like a Marx brothers approach, like some bizarre sitcom where we are just going to create a story, create a mess, create a muddle and then we will come in and try to half fix it. This bill sums that up.

In 2009-10, because of Labor's wasteful spending, they had to cut the budget for the Customs cargo screening program by $58.1 million. We also saw their incompetence in pink batts and the BER. They would say that they had a budgetary issue, they had wasted the taxpayers' money and they had wasted the surplus presented to them when the budget was in the black, and all of a sudden they say that they are in the red—they have some issues and they are going to have to cut the Customs screening program by $58.1 million.

As a result there is less screening, and the smugglers think to themselves that there is an opportunity so they start bringing things through the borders, including tobacco. All of a sudden we have an issue with tobacco smuggling. It is quite an impact. Various surveys and reports have been done; one of which showed that in 2011 an estimated total of 2.26 million kilograms of tobacco might have been smuggled through our borders into the Australian market. That potentially was a forgone tobacco excise revenue of approximately $1 billion. So they say they will cut Customs screening to save $58 million, but the end result is that that has cost us revenue of $1 billion. Only the Gillard government could dream up such a scheme and implement it.

Mrs Griggs: The Midas touch in reverse.

Mr TEHAN: It is the Midas touch in reverse, as the member for Solomon says. It is quite remarkable. Then they think that they have to do something about this so they had better toughen up on the offences in this area, and they decide they had better implement some changes. So what do they do in implementing the changes? They decide that they will also broaden some of the issues that they are going to address in this bill and look at some modifications to how duty-free provisions for tobacco are handled. The main industry representative body for duty-free issues is the Australian Duty Free Association. As chief of staff to the former minister for tourism, I had dealings with ADFA. They are a wonderful organisation—they are very serious about what they do and very dedicated to the duty-free sector. They understand its importance to the tourism industry. They were always welcome in the office of the former minister for tourism. They were seen as a very sensible organisation, and if they had something to say they would say it properly and base it on facts.

The Australian Duty Free Association had some concerns about the changes and they wanted to bring those issues to the minister's attention. They wrote to the Minister for Health on 9 March 2012, asking if the rumours they had heard through the media, that the government was planning on introducing the duty-free tobacco ban, were true.

The Minister for Health, the member for Sydney, did not even want to engage with ADFA. So what did she write on the letter? She referred it—just flicked it over to the Treasurer—and then wrote on the letter 'a minor organisation'. With all due respect, I would like to give some advice to the member for Sydney, the Minister for Health. Maybe she should stop the personal attacks on people in this place and concentrate on her day job, and she might do it a little bit better. Rather than going out with malicious attacks in the media about members in this place, she should concentrate on doing her job. Doing her job might include, when ADFA write to you, raising some issues which they would like thought about, considered and maybe addressed, rather than rushing out to do some media interview where you are just going to make some rather baseless, crude attacks on people's character, that, instead, you might say, 'I might spend that half an hour seeing ADFA, listening to their point of view, considering their point of view.' You might not agree with it. You might dismiss it. But at least you should recognise that they are an important organisation. They represent a significant part of the tourism industry and they deserve to be heard, not dismissed out of hand with some sort of flick of a pen of 'a minor organisation' over to the Treasurer.

It does bell the cat a little bit that maybe the government's whole objective here has been revenue raising, rather than trying to address this issue. I go back to the first point I made, that maybe we would not be here in the first place if those original cuts had not been made from this 'comical Ali' government, but at least they should give reputable organisations the time of day, not just flick them, in particular when it has been demonstrated that you do have the time to see these organisations, because you have got time to run out to do these press conferences, which can probably only be described as grubby or offensive. Just quit that. There is no need for it—concentrate on doing the work that you should be doing as the Minister for Health.

In that letter, ADFA did raise some concerns which I think are worth placing on the record. The shadow minister did that, but I would just like to make sure that we get them heard, because there is an impact on the duty-free sector as a result of these changes. They wanted it known that there are increased compliance costs for Customs associated with searching travellers with illegal cigarettes entering Australia at all airports. Treasury assumes a revenue gain of $200 million, yet Deloitte Access Economics' conclusion is a maximum of $42.1 million of revenue gain. Once again we see some issues being raised here. Treasury has said $200 million, and we all know they are under pressure. They are under pressure to make sure the government gets its surplus. What we need to do, and what needs to be looked at seriously, is to ask is there credibility in the Deloitte Access Economics conclusion of a maximum $42.1 million revenue gain, and is the government going to relook at the Treasury modelling to ensure that it is right. Otherwise, we are being told one thing by the government to try to get its surplus, yet another by Deloitte that it is only going to generate about a quarter, or even a little bit less than a quarter, of that revenue. I would ask the government to look seriously at that issue and come back and inform the parliament that their modelling is, in fact, correct on this.

There is going to be a reduction in tax revenue from duty-free operators, suppliers and airports as a result of the reduced profits and the reduced income tax paid by employees, as a result of the job losses that will inevitably occur. There will be a major inconvenience to tourists due to longer queues in busy airports and greater congestion due to additional Customs searches for cigarettes, which will need to be declared, and there is potential for increased black market activities. They are some of the serious concerns that ADFA wrote to the Minister for Health about. They are the concerns that she dismissed with the flick of a pen as coming from 'a minor organisation'. The Minister for Health should look again at the way she is going about running her portfolio if that is the attitude she is taking to these issues.

There are serious issues around the Customs Amendment (Smuggled Tobacco) Bill 2012. Once again, the way the government has gone about implementation leaves a lot to be desired. We do need to tackle the issue of the trade of illicit tobacco and the government has gone some way to doing that by changing the penalties, in particular the 10 years imprisonment. But the fact is that in the 2009-10 budget the Gillard government cut funding for the Customs cargo screening program by $58.1 million. At some stage, the government needs to understand the pressure that has been on Customs over the last three or four years and that Customs needs to be properly resourced. The government needs to come out and acknowledge that.

We need to see the government place on the record that the $58.1 billion that it cut from the Customs budget was a mistake and that it erred. It would not hurt for the government to do that. There are plenty of other motions at the moment where people are being called on to apologise. I cannot see why the government, if it is serious about apologising, cannot say, 'Okay, we got this wrong.' We need to get proper screening back in place. We have to make sure that the processes are there and that Customs are properly resourced, so it can do its job properly. In conjunction with that, we also need to increase the penalty for being caught in this area and make the maximum penalty 10 years imprisonment. That would be the type of sensible action that would indicate that the government was seriously committed to doing something in this area, instead of just robbing Peter to pay Paul, which is where we are as a result of the government's handling of this issue.

The coalition support the bill. We need to do everything we can to make sure that the issue of smuggled tobacco is addressed and that there are penalties to make sure that this crime does not continue to occur. We also have to look at the lessons learnt in getting where we are today with this bill, because unfortunately at every step it has been a story of incompetence and bungled handling by the Gillard government. One does hope that after so many programs and so many bungled pieces of legislation, one day we might be able to praise the government for having done something properly. I will not hold my breath, but we do live in hope.

The DEPUTY SPEAKER ( Mr Lyons ): Thank you. I trust the self-praise does not continue with the next speaker. That could happen between the member for Makin and the member for Fowler, but we probably should get on with the question, which is that the bill be now read a second time.