The head of the Australian Border Force says the government’s plan to abolish retail vape sales is a “work in progress” with no funding attached to the crackdown in this month’s federal budget.
Commissioner Michael Outram warned that banning vapes at the border won’t be enough to stamp out a rampant black market, as his organisation was already only managing to detect a quarter of illicit drugs making their way into Australia.
“The level of criminal infiltration at our border is concerning,” Outram told a senate estimates hearing on Tuesday. “Prohibition [of] goods at the border, in itself, is unlikely to solve a problem.”
His comments indicate the scale of the task facing the government as it attempts to make Australia the first country to successfully regulate vapes as prescription-only products sold in pharmacies, in response to concern that a new generation is becoming addicted to nicotine.
Vapes and illicit tobacco have also become a lucrative market for organised crime groups because they offer high profit margins with smaller penalties than narcotics, adding to the complexity of the issue facing Health Minister Mark Butler.
Butler has taken a strong stance on eliminating illegal retail vape sales, which industry figures estimate could generate $300 million in tax revenue if they were regulated like cigarettes.
He has instead vowed to ban the import of all non-prescription e-cigarettes and will require the remainder of pharmaceutical products to meet strict standards around nicotine content and plain packaging – a move welcomed by health groups.
But there was no funding in the May budget allocated to enforcing the crackdown – which will require products to be seized at the border and retail sales to be policed at a state level – because the federal government is still figuring out how to regulate and execute the ban with states and territories.
A spokeswoman for Butler said that work was underway, with states and territories expected to play a “strong role”.
“At the Commonwealth level, we recognise additional resourcing will be required for the Therapeutic Goods Administration and the Australian Border Force. There is a commitment from the government to properly fund these activities from changes to the tobacco excise,” she said.
NSW Premier Chris Minns has conceded the vape ban will be difficult to enforce and has indicated his government would seek support from the Commonwealth.
Victorian Premier Daniel Andrews, whose state budget on Tuesday sought to rein in spending, has said he would engage on the issue in good faith but was concerned the Commonwealth would push costs onto states.
Police Federation of Australia chief executive Scott Weber said officers were already under-resourced at a state and territory level, meaning money for local crackdowns on illegal vapes would probably need to come from federal coffers.
The government would also need to introduce clear regulations around processes, fines, punishments and court procedures, as well as educate individual officers, he said.
“How many convenience stores and cigarette shops are there around the country? There are thousands of premises; that’s heaps of extra work hours,” Weber said.
“Is a police officer going to see someone walking down the street and confiscate their vape? And are they going to give us extra resources to do that? Because it’s extremely labour-intensive.
“Extra drains on the system needs to be well-thought-out and resourced. Police resources [are already] dealing with an emphasis on domestic violence, cybercrime and day-to-day policing, at a time when there are recruitment and retention issues.”
Weber said illicit tobacco was already difficult to police, despite having its own dedicated federal taskforce.
Illicit tobacco sales would also hinder the government’s efforts to collect more money for vape enforcement through raising the tobacco excise, he said, while both products were being eyed by organised crime.
“It’s such a lucrative market with minimal risk because you can import large volumes, and even if half gets confiscated you make a massive return on your investment. The fines are a lot less than illicit drugs,” he said.
Outram confirmed that criminal syndicates had become involved in illicit tobacco in recent years. “The reward and risk calculation is different [to narcotics],” he said.
The Border Force commissioner told federal senators on Tuesday that the duty evaded on tobacco so far this financial year was up 10.5 per cent on last year.
He said a border crackdown would only go part-way to solving the vape problem, which involves millions of products imported mainly from China.
“We are working with the TGA [Therapeutic Goods Administration] in appreciating how we would operationalise any sort of prohibition in relation to vapes at the border. That’s work in progress,” Outram said.
“Whatever the good is – nicotine, vapes, narcotics, weapons – there are things that need to be done in a domestic setting to reduce demand. You do need a systems-based approach to reducing the harm caused by these markets.
“A border ban by itself may be partly effective, but it won’t be fully effective to solve the problem.”
Outram said Border Force also had to prioritise which goods it detected and seized. “Obviously narcotics is the number one priority, because of the harm: the harm caused by the illicit drug trade is significant, and the amount of money generated is significant,” he said.
But cocaine is flooding into Australia at unprecedented rates. Outram said authorities were monitoring 100 companies suspected of helping traffic drugs, but that Border Force was “pretty stretched” and struggling to find the resources to combat corruption at the border.
The organisation also had its funding reduced in the May budget, from $1.6 billion allocated to border protection next financial year to an annual spend of about $1.4 billion in the three years after.
The head of the Australian Association of Convenience Stores, which advocates for selling vapes in retail settings, said the prescription model had already been attempted by former health minister Greg Hunt and that the black market erupted nonetheless.
“Doubling down on the failed prescription-only prohibition framework, without any funding for enforcement, is nothing short of catastrophic,” chief executive Theo Foukkare, a former tobacco executive, said.
With Matthew Knott
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