New South Wales Clamps Down on Illicit Tobacco Trade
The New South Wales government is introducing tough new legislation that could see commercial landlords facing severe penalties, including potential jail time, if they knowingly allow their tenants to sell illicit tobacco and illegal vapes. The proposed laws, set to be presented to state parliament this week, mark a significant escalation in the fight against a booming black market.
Hefty Fines and Prison Sentences for Non-Compliant Landlords
Under the planned legislation, landlords who fail to notify authorities or take action to evict tenants running illicit tobacco and vaping businesses could be hit with fines of up to $165,000, sentenced to a maximum of one year in prison, or both. This move follows the recent closure of the first stores in Sydney under new state powers that came into effect on 3 November.
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 Expanded Enforcement Powers
The crackdown is already underway, with two stores in Sydney's northern suburbs becoming the first to be shut down last week. Authorities now have the power to close stores for up to 90 days immediately and can seek court-ordered closures for as long as 12 months. Furthermore, landlords are now empowered to terminate leases where such closure orders are in place.
Other significant changes introduced include a new offence for the possession of a commercial quantity of illicit tobacco, carrying a maximum penalty of over $1.5 million and 7 years' imprisonment. Minister Park has indicated that store closures will continue regularly in the coming days and weeks, though he cautioned about managing public expectations.
New Licensing Scheme and Federal Tax Dispute
The NSW government is simultaneously rolling out a new tobacco licensing scheme. Retailers are required to display a valid licence at the point of sale, risking fines from $11,000 to $44,000 for non-compliance. After a three-month grace period ending on 1 October, approximately 4,500 retailers had obtained a licence. This number had grown to around 6,000 by last week.
Interestingly, NSW Chief Health Officer Kerry Chant revealed that one of the first two stores closed did possess a licence under the new scheme, serving as a warning against complacency. The government admits it is uncertain how many unlicensed tobacco retailers operate in the state, with initial estimates as high as 19,000.
The state government, led by Premier Chris Minns, is also pointing a finger at the federal level, calling for a reduction in the tobacco excise. Premier Minns argues that the high excise is the "leading reason" for the surge in illegal tobacco, which has seen Sydney "going back to the 90s" with open street sales. However, Federal Treasurer Jim Chalmers has rebuffed these calls, stating he does not believe the solution is to make cigarettes cheaper.
