Major development after 840kg metal spill which caused traffic chaos
Traffic was brought to a standstill on the Pacific Motorway on May 2 after a truck spilled 840kg of metal pieces across a 30km stretch from Ourimbah to Mount White at about 5am.
It was estimated that 300 cars had their tyres punctured as they ran over the tiny pieces of metal, closing the southbound lanes of the highway.
It took 10 hours to re-open the highway - prompting some people to abandon their cars - as a massive clean up effort got underway to remove pieces of finely ground steel from the road.
There were no reports of injuries and at the time police said it was lucky the incident did not result in a serious accident.
At the time, police spoke with the driver of a heavy vehicle tipper which was towing a trailer.
On Saturday, the 46-year-old driver was given a court attendance notice after being charged with driving a heavy vehicle not complying with loading requirements.
The man is due to appear in Hornsby Local Court on July 10.
In a statement earlier this month, trucking company NJ Ashton apologised for the incident.
'We'd like to thank all motorists, and anyone else impacted in some way, for their patience today. The driver is devastated and profoundly apologetic — as are we,' the company said in a statement.
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The Australian
41 minutes ago
- The Australian
Janet Albrechtsen: ‘Stolen wage' cases must be seen for what they are
'Stolen wages' is a non-legal label attached to a spate of class actions brought by groups of Indigenous people against state and federal governments for claims of unpaid or underpaid wages between the mid to late 1930s up until the early 1970s. Although these appear to be legal claims, the judgments in these cases – which have yielded damages awards running into the hundreds of millions of dollars – unwittingly reveal they are no such thing. In each case, the judge admitted there is not enough evidence to support the various 'stolen wages' claims. Given there is little chance of establishing legal liability, the stolen wages claims are political, not legal, in nature. It follows that the law, our legal system, is not the right place for governments to make these enormous taxpayer-funded settlements. And yet there is now a troubling pattern of governments doing precisely that, reaching huge settlements paid for by taxpayers to Indigenous groups under the auspices of a cosy insiders club comprising a bevy of defendant and plaintiff solicitors and barristers, myriad other experts, litigation funders, of course, and judges. This elite club is allowing the legal system to be co-opted for political purposes. To be clear, lest what follows be misunderstood, there is nothing inherently wrong with Indigenous people making political claims for receiving little or no wages in the early decades of the last century. The fault lies with the political and legal club that is responsible for handing out taxpayer money under the cloak of the court system when in fact the claims are nothing short of a legal daydream. Australians have over many decades shown a commitment to supporting measures that genuinely improve Indigenous disadvantage. That much is clear from the fact that spending on Indigenous issues is rarely a mainstream election barney. However, if settlements are to be made to recompense Indigenous people for historical wrongs, they ought to be done in a transparent, honest and rigorous manner. Instead, judges are overseeing an unseemly and faux legal dance where a small group of legal insiders make whoopie with taxpayers' money. McDonald v the Commonwealth Perhaps one day a senior judge will call for an end to the ruse of stolen wages class action settlements. Alas, that did not happen in the most recent case of McDonald v the Commonwealth. Otherwise known as the Northern Territory Stolen Wages Class Action, this case was brought by a group of Aboriginal and Torres Strait Islander people and, where they have died, by their descendants, who claimed unpaid or underpaid wages while working on pastoral stations, other private workplaces, Aboriginal institutions and missions, or government-run stations from June 1933 until November 1971. The commonwealth governed the NT during that period. The claim was brought by Shine Lawyers on behalf of the plaintiffs, and was funded by litigation funders Litigation Lending Services. In April this year, Federal Court of Australia Chief Justice Debra Mortimer said that 'on any view of the pleadings and the filed material, the narrative of the claimed experiences of Aboriginal and Torres Strait Islander people in the Northern Territory casts a shameful shadow on the actions of government, government officials and other historic participants in the alleged exploitation of the labour of Aboriginal and Torres Strait Islander people'. Mortimer approved a settlement of $180m by the commonwealth to members of this class action as 'fair and reasonable'. The sum was calculated by multiplying $18,000 by the number of eligible claimants – up to 10,000. The legal conundrum arose when the Chief Justice focused on liability. Mortimer said that it would have been very difficult for the plaintiffs to establish that the commonwealth was legally liable for the alleged claims. 'The risks – in terms of proving liability and quantifying proof of loss – are plainly considerable,' Mortimer said. Surely something jars – legally – in the minds of curious people when plaintiffs, with little or no chance of succeeding at trial, receive a taxpayer-funded settlement of $180m that is duly signed off with much fanfare, and some highly critical historical commentary, by a judge as 'fair and reasonable'. The NT stolen wages case follows a familiar pattern of earlier stolen wages class action cases. In a case brought against the West Australian government by a group of Indigenous people – using Shine lawyers and the same litigation funders, LLS Fund Services Pty Ltd – in 2024, the plaintiffs and the WA government agreed to a $180.4m settlement. Another class action, brought against the state of Queensland a few years earlier and funded by Litigation Lending Services Ltd, led to a $190m settlement. Justice Bernard Murphy delivered judgment in both cases after hearing evidence in each that a group of Indigenous people in each state had not been paid, or had been underpaid, over a period of about 50 years. Murphy said that the class action members had been treated badly by government policies and had suffered shocking disadvantage. In each case, Murphy said that it would have been unlikely that the plaintiffs would have succeeded in establishing that the respective government was legally liable for the unpaid or underpaid wages had the class action gone to trial. 'I am satisfied that there is a significant risk that if the case proceeds to trial, the applicants' and class members' claims will fail,' Murphy said in 2024 when approving the $180.4m settlement in Street v State of Western Australia. Similarly, when approving the $190m settlement in the 2020 case of Pearson v The State of Queensland, Murphy said that: 'In my view the proceeding faced real risks and difficulties on liability and quantum, such that it was impossible for the applicants' lawyers to be confident of succeeding in the causes of action pleaded or, if they did succeed, obtaining any better result than the proposed settlement.' Settlements of legal claims between plaintiffs and defendants are, of course, not uncommon. The parties may choose to settle their case for a range of reasons, rather than go to court. Take a case of commercial litigation, for example, where a plaintiff is claiming damages for $100m. Even with decent prospects of winning at trial, a plaintiff may agree to take a haircut on the amount claimed. Litigation is a lottery, even for a plaintiff with a strong case. The prospect of a maverick judge at trial, the time, and legal costs in preparing a case, executive time and stress involved in giving evidence, possible bad media before and during the trial – even if you ultimately win — make a Pyrrhic victory likely. These and other reasons will often lead a plaintiff to settle a claim at a discount before trial. For a defendant, the same factors apply in reverse. Facing a $100m claim, a defendant may be prepared to pay, say, $20m to bring the matter to an end. The concept of 'go away' money is very real in commercial litigation. However, in the stolen wages cases, state and federal governments have agreed to settlements close to $200m even though there is no prospect of the plaintiff class action members establishing legal liability against the state or commonwealth at trial. Given this, it is not unreasonable then to suggest that the McDonald case, like other stolen wages cases settled by governments in recent years, appear to be poorly disguised backdoor ways of paying reparations to Indigenous groups. This begs a few obvious questions. If these claims are not legal in nature, but political, why are judges in each case essentially celebrating a legal farce by lauding the outcome? Need for transparency The other question is, why are governments using the court system to make enormous taxpayer-funded settlements where there is no legal liability to do so? One reason is that it is very easy spending other people's money. But still, if the government of the day – state or federal – genuinely believes taxpayers should stump up for stolen wages claims, then it should be done in a more honest and accountable way. If taxpayer-funded payments of this type are to be made by governments to Indigenous groups, they should be done openly as matters of public policy, not as a legal pretence. Governments could agree to pay reparations or make ex gratia payments to Indigenous people, rather than hiding behind the legal system and seeking out the imprimatur of a judge. That way, governments would avoid the expense and complexity of the court system. This direct route is not only honourable and honest but would cut out the middlemen of class action lawyers and litigation funders in each case making a motza from these faux class actions and allow more money to be paid to Indigenous people who have suffered historical wrongs. In the recent McDonald case, litigation funders LLS Fund Services Pty Limited received $30m for their work while Shine lawyers received upwards of $15m. Cowardice likely explains why governments are making these mammoth taxpayer-funded settlements under the cloak of the courts. Getting a settlement stamped by a judge means a government can avoid political accountability. Making the case for reparations to voters and taxpayers is a harder ask. Paying reparations for past alleged sins is far more politically controversial than lauding a settlement signed off by a Federal Court judge. This is not to criticise the practice of settling contested cases. Doing so in cases of genuine contest, and for a reasonable amount, is a laudable way to avoid clogging up the court system. Except that in the recent stolen wages cases, it is clear from the judgments that the plaintiffs would fail to prove in the respective cases that commonwealth or state government was legally liable for the wrongs claimed. And even in the unlikely event of success, the plaintiffs would not have recovered anything like the enormous sums agreed to. At the end of her judgment approving the commonwealth settlement for stolen wages in April, Chief Justice Mortimer said the 'enormous body of material' – meaning testimony of disadvantage suffered by Indigenous people – 'cannot fail to move the reader'. Her sentiments are, without question, sincere. But they are just that – sentiments. The legal system is concerned with who is liable for legal wrongs. While the Federal Court has powers under the Federal Court Act to approve settlements, it is disconcerting to see judges stamping their approval on settlements that look suspiciously like they are being reached for political purposes. At the end of her judgment, Mortimer made another observation. Having been critical about some of the conduct by Shine lawyers, and the litigation funder, she said: 'It seems to me a not inconsiderable number of people in Aboriginal and Torres Strait Islander communities in the Northern Territory would look at the figures being paid to the lawyers and to the funder … and then look at what their family members are getting at an individual level, and they would be frustrated, and likely mystified about how city-based non-Indigenous participants in this proceeding come out with so much money compared to their family and friends.' Instead of attacking lawyers and litigation funders, the Federal Court's most senior judge could have raised concerns the legal system is being co-opted for apparently unseemly political purposes. The only real winners are the lawyers and the litigation funders. And those judges who use the settlements as opportunities to express their deeply felt feelings. But those observations will have to wait for another judge. Janet Albrechtsen Columnist Janet Albrechtsen is an opinion columnist with The Australian. She has worked as a solicitor in commercial law, and attained a Doctorate of Juridical Studies from the University of Sydney. She has written for numerous other publications including the Australian Financial Review, The Age, The Sydney Morning Herald, The Sunday Age, and The Wall Street Journal. Inquirer Emissions policy has become a make or break issue for Labor and the Coalition. Inquirer Almost two years after the October 7 atrocities, when the PM failed to clamp down on anti-Israeli hatred and baulked at offering proper support to Israel's defence, we are in a worse place.
ABC News
an hour ago
- ABC News
Law firms and investors making millions from class actions while victims get just thousands
For Minnie McDonald, the class action represented hope — justice after decades of unpaid work. The lawsuit was supposed to right a wrong, provide compensation for thousands of Aboriginal workers who received little or no money for their labour. Instead, some Aboriginal workers and their families will end up with payouts as little as $10,000, while the law firm and its financial backers have pocketed tens of millions. Minnie agreed to be the lead plaintiff in a Northern Territory class action, meaning she represented the group, instructed the lawyers, reviewed costs, and signed legal documents on behalf of the group. But Minnie can't read or write. For help, she relied partly on her granddaughter, who has no legal experience, alongside Shine's lawyers. Shine told Four Corners that Minnie was given independent legal advice. One document Minnie signed was a proposed $11 million increase to Shine's costs. At least one class action is launched every week on average in Australia against banks, governments, and big corporations. But the stolen wages case raises questions about whether class actions are delivering justice for ordinary Australians or are simply a money-making exercise for lawyers and investors. Minnie was just 14 years old when she started working on an outback station near the Queensland-Northern Territory border. Her family was paid in rations of flour, sugar, and tea. Now aged in her 90s, Minnie still remembers life on the station. "It was hard work," she says. Living in a tent and working alongside her family, they would occasionally receive the bones of a bullock killed by the station owner and cook it over an open fire. "My mother used to cook it. Backbone, leg bone, everything," she says. In Western Australia, Mervyn Street and his family lived and worked on another station and were also paid in rations. Mervyn remembers his father being given "a blanket, a canvas and an axe". "My family worked like slaves," he says. Like Minnie, Mervyn was the lead plaintiff in the WA class action representing thousands of Aboriginal men, women, and children who lived and worked on stations and in missions over the past century, receiving little to no pay. Like Minnie, he can't read or write either, and relied on a younger relative and Shine lawyers to help him. Class actions are hugely expensive, but a law change in Australia almost 20 years ago transformed them into a form of investment where "litigation funders" provide the capital. These dedicated companies team up with lawyers to finance the legal costs of a class action in return for a slice of any payout. When they are successful, funders can more than double or triple their money. However, if they lose, the funders lose their investment and have to pay the other side's costs. The chairman of the Association of Litigation Funders of Australia, John Walker, says they don't see it as gambling. This business model is how legal firm Shine Lawyers was able to launch class actions in NT and WA to recoup stolen wages, after securing the backing of Litigation Lending Services, a company chaired by billionaire businessman Shaun Bonett. It took four years, but both class actions eventually reached a settlement. In WA, the state government agreed to pay $180 million, and the federal government paid about $200 million for the NT. But first, the law firm and investors have to take their cut. Shine Lawyers will receive more than $41 million in approved costs for its work in both cases, while Litigation Lending Services will take a commission of up to $57 million. The exact amount that Aboriginal workers will receive is unclear because the final number of eligible recipients is not known. Based on court documents, Four Corners estimates the workers will get between $10,000 and $14,000. If those workers have died, the amount will be divided among their families. Although it was Minnie who had to approve the proposed settlement, she said it wasn't enough. She had hoped there would be enough to buy a car so that her children "could take me for a picnic somewhere, you know, have a feed, cook kangaroo tail or whatever, but I didn't get enough". When Four Corners spoke to Mervyn, he was unaware of the final payout individuals would receive until it was spelt out to him. "What you're telling me is not good enough," he says. Shine Lawyers did not want to do an interview with Four Corners. It said in a statement that governments had ignored "the stories of indigenous workers who were denied fair wages. Shine Lawyers gave Aboriginal workers "the chance to tell their stories, receive compensation and be acknowledged … for the historical injustices they suffered". When asked about Minnie and Mervyn's inability to read and write and their capacity to understand legal and financial issues, Shine said: "We are confused that the ABC would suggest that illiteracy implies a lack of intelligence". "This is an unacceptable proposition." Shine said it was not appropriate to comment on "the way in which we provided advice … as these are privileged communications". "We can confirm, however, that both clients received independent legal advice" and that "Shine Lawyers used Aboriginal barristers to bridge communication and cultural barriers." Former Indigenous Affairs Minister Linda Burney questioned how much people understood about the class action. "If you are illiterate, if you're innumerate, and your first language is not English, how on Earth are people supposed to understand anything?" she says. "It is very exploitative because you are seeing such a disparity in the outcomes for the legal teams financially, and the outcomes for those that have joined the class action." The stolen wages cases have highlighted concerns about the business model underpinning class actions in Australia and the amounts being taken away by funders and lawyers. The judges who oversaw the WA and NT class actions flagged their concerns about the high legal costs when delivering their judgements, but ultimately approved the settlement amounts as "fair and reasonable". In the NT, Chief Justice Elizabeth Mortimer was scathing in her judgement, saying "the pursuit of the business model" had, at times, overshadowed the good intentions of the lawyers. She said "it would not be surprising" if Aboriginal workers who were part of the class action thought that "the proceeding was little more than a money-making exercise for others". "It seems to me a not inconsiderable number of people … would be frustrated, and likely mystified about how city-based non-indigenous participants in this proceeding come out with so much money compared to their family and friends," Justice Mortimer said. In WA, Justice Bernard Murphy remarked on the "enormous costs" Shine racked up travelling around the state signing people up to the class action. Part of those costs included law clerks who were billed out at a rate of $375 an hour, even though many of them were undergraduate law students. Describing the charges as "excessive" and "seriously overblown", Justice Murphy deducted $4 million from the firm's claims. Shine said "the costs were incurred over the course of six years" and that "a significant portion … came as a result of a "court-ordered outreach and registration process". The breakdown of what lawyers are charging is rarely disclosed, even to members of a class action other than the lead plaintiff, although class members can usually request access. But a confidential report of Shine's costs was released to Four Corners after an application through the courts, revealing in granular detail what the law firm charged while working on the WA class action. It shows Shine had at least a dozen barristers – one charging almost $5,000 an hour — who billed the class action almost $3.5 million. But there were bills that were rejected by a costs expert appointed by the court. Shine tried to charge almost $35,000 for booking and credit card fees from its clients, but the expert rejected it because they were "usually considered to be an overhead of the business rather than a cost reasonably borne by the applicant". Thousands of dollars for Uber and taxi fares were also rejected. Shine also tried to claim tens of thousands of dollars for "grocery items, meals purchased whilst travelling to various communities, and meals and alcohol purchased in hotels and restaurants". The expert rejected these, saying these "should form part of the firm's internal overheads in running a matter such as this". The funder of the stolen wages cases, Litigation Lending Services, bankrolled another action in Queensland. They are set to make up to $95 million in commission from all three cases, which equates to a 250 per cent return on their investment. The funder, Litigation Lending Services said "the real injustice" is how "government fought these claims fiercely, with considerable public resources over many years". "Without LLS's financial support and commitment to taking on all the risk, these claims would not have been brought and group members would have received nothing," it said in a statement. They told Four Corners they were proud of their role and their commission was lower than market rates "to reflect the social justice nature of the claims". George Dann, a member of the WA class action who started work at age 14, was appalled by the amount going to Shine and Litigation Lending Services. He says the amount being taken in fees and commissions is disgraceful. "They get that in an hour, what our family would get in a year," he says. His cousin, Sharon Todd, who put in claims for both her parents, was shocked to learn of the sums. "It's a real insult. It just makes me feel that we are an industry that is being used over and over again to make money for other people," she says. "How are these people sleeping at night?" Although the settlement was approved by the Federal Court almost a year ago, none of the people who joined the WA class action have received any money. The administrators, Grant Thornton, who is being paid up to $3 million to administer the funds, says it's been unable to distribute the funds because it's been dealing with the Australian Taxation Office over a tax issue, which has now been resolved. Shine Lawyers has been paid its share. "It's a farce," George Dann says. "A lot of people worked all their life, and for this to happen, it's a terrible thing." In Canberra, there has been a political battle over the lack of regulation for law firms and litigation funders in the current class action system. Most of the litigation funders operating in Australia come from overseas, with some of them based in tax havens. They are not required to hold a financial licence with ASIC, the corporate regulator. "We have a system where litigation funders who were taking sometimes 30, 40 per cent of the settlement away from victims operate in a largely unregulated environment," says David Hughes of the Liberal-aligned Menzies Research Centre. "In many instances, you could argue that they have less regulation than real estate agents or mortgage brokers." The Morrison government tried to crack down on lawyers and funders in 2021 by capping legal fees and funder commissions at 30 per cent of the settlement. Labor opposed the proposal, and the legislation never went through parliament. Mr Hughes believes the reason for Labor's opposition was because the party is connected to the law firms. "The Labor Party has had strong links with what we call these plaintiff law firms, so think of the Slater and Gordons and the Maurice Blackburns … they're often seen as a training ground for future Labor politicians," he says. "Labor was sympathetic to the cause of these plaintiff law firms, but ultimately these plaintiff law firms just knew that their profit share was at risk if these reforms went through." Maurice Blackburn said it "actively engaged with decision-makers … to make sure everyday Australians were better represented by the law". A statement from Attorney-General Michelle Rowland said that class actions provide an important pathway for Australians who might otherwise be denied justice. John Walker, the head of the Litigation Funders Association of Australia, says the Coalition and the Liberal-aligned Menzies Research Centre have their own agenda in wanting to protect "the big end of town" from shareholder class actions against big business. He says litigation funders are necessary to pay the legal bills so that ordinary people can get justice. "We're a for-profit industry and we seek to maximise profit as much as we can, but at the same time seek to focus on creating value," he says. Mr Walker also disputes suggestions that litigation funders are not regulated. "We are regulated daily. The system has a capacity to do the best it can. It has checks and balances," he says. "We need to submit to the court and say, 'you tell us what we are going to get paid'. Barrister Peter Cashman, who was at the forefront of class actions in the 1990s, believes the system needs to change to ensure group members get a fair share of the settlement. "Transaction costs are high, the legal costs are high, the funding commissions are high, and the ultimate people who pay the price are the consumers or the class members," he says. "Australia has become a honey pot for commercial investors in litigation. They're not in it for love, and they're not in it to further the interests of access to justice. They're in it for the money. Mr Cashman wants to see the federal government establish an alternative model to fund class actions and prevent them from becoming money-making machines. "You need a publicly funded not-for-profit entity to fill the void that was filled by commercial funders that would do the cases without seeking to make a profit out of it … where the transaction costs are lower, and where the funder is interested in funding … public interest cases." Watch Four Corners' full investigation, The Price of Justice, tonight at 8.30pm on ABC TV and ABC iview.
ABC News
an hour ago
- ABC News
Illegal tobacco is a deadly $10 billion industry wiping out legitimate businesses
Australia's illegal tobacco problem has made the proverbial transition from tragedy to farce. Illicit, excise-evading cigarettes now comprise half of the cancer-inducing products sold to Australia's 2.7 million smokers. A study published by FTI Consulting put it at 39.4 per cent in 2024, up from 14 per cent six years ago, but an update for the month of June puts it at 50 per cent. And, according to studies of wastewater, nicotine consumption in Australia, including vaping, is at an all-time high. We can now conclude that the strategy of taxing and banning nicotine addiction out of existence is a complete failure. The result is that organised crime is making about $10 billion a year in revenue. Who needs narcotics? With them, you risk lengthy jail time; with smokes and vapes, it's a fine, but only if you're very unlucky. It means Australia's criminals are better paid than they have ever been, and the result of that is showing up in an explosion in both the amount of crime and its brazenness. And because the people engaged in this "industry" are gangsters, competition is not met by price wars and the ACCC, but by burning your competitor's business to the ground, or, as happened last week, by allegedly murdering your competitor's staff. Athan Boursinos, 21, an alleged employee of "tobacco kingpin" Kazem "Kaz" Hamad and his cousin, Ahmed Al Hamza, both of whom live overseas, was shot dead in a laneway behind his home in broad daylight on Thursday morning. In the past couple of years, there have been 125 fire-bombings of tobacco shops in Victoria, and another 50 or so in other states — the most recent last week in Corrimal, NSW. Victoria's coat of arms bears the phrase "Peace and Prosperity", but there's a lot more of the latter in that state these days than the former, and that's not saying much. Violent robberies in Victoria have grown by more than 150 per cent since February 2024 due to tobacco-related crime. This is much worse than an unintended consequence of the effort to reduce smoking; it is a complete stuff-up. A window into what's happened was provided last week by Viva Energy, which operates Australia's largest network of petrol stations with convenience stores attached. In its six-monthly results, the company reported that tobacco sales are down 27 per cent — in one year! — because of the growth in the illicit tobacco trade. The problem for Viva is more than money: its petrol stations and other convenience stores are now being regularly robbed by gangs of balaclava-wearing teenagers waving handguns and machetes, traumatising the staff. Serious, well-resourced gangs are only after cigarettes — the entire stock — because at $57.89 a pack, the stock can be worth $100,000. Do five or six of those in a night, and you're making very good money. The till is small beer. The Albanese government is having a similar financial problem to that of Viva. This year's federal budget contained an estimate of $7.4 billion from tobacco excise for the current financial year, down from $8.75 billion just six months ago in MYEFO. The CEO of the Australian Association of Convenience Stores, Theo Foukkares, says the tipping point happened in 2019 when the excise increased 55 per cent over three years to $1.10 per cigarette stick. As a direct result, illicit smoking took off and tobacco excise revenue to the government collapsed, from a peak of $16 billion in 2019 to this year's $7.4 billion. And it's not just the price that's driving people towards the much cheaper illegal alternatives, although that's the main thing, especially in a cost-of-living crisis. For a start, the packs look nicer without pictures of horrible mouth tumours. And on July 1 this year, menthol cigarettes were banned completely, along with those that contain a little burst of minty flavour in the filter. Also, cigarette companies are now required to print health warnings on the cigarette stick, not just put gruesome pictures on the packet — another increase in cost. Naturally, illegal tobacco importers are not concerned about complying with the menthol ban and are even bringing in berry-flavoured cigarettes as well as menthol ones, hoping to appeal to a younger demographic. The requirement that vaping products with more than 20mg of nicotine must have a prescription is not working either. Only 700 chemists around the country stock them, reluctantly, while the products are readily available without a prescription in the same stores that stock the illicit cigarettes. There are thought to be 1.5 million regular vapers, adding to the 2.7 million smokers. The real danger now is that the stores selling legitimate tobacco will give up and leave the industry to the crooks. Coles' Liquorland has already stopped selling cigarettes, and both Coles and Woolworths are reported to be considering dropping them from behind the service counters of their supermarkets. It's harder for petrol stations to do that, since tobacco represents 25-30 per cent of store revenues; if they didn't sell cigarettes, many petrol stations would close. But eventually, with more and more staff suffering PTSD, they'll have to do it if the problem is not resolved. At which point, Australia would have managed to hand over an entire industry to gangsters. The basic problem seems to be that the excise is collected by the federal government, but the enforcement is done by under-funded state police forces. The illegal products all arrive at Australia's ports, and the importers are engaged in tax avoidance, so in theory, it should be two federal agencies that deal with it — Border Force and the Tax Office. But only about 1 per cent of incoming containers are inspected by Border Force, and ATO officers don't have the resources, or the desire, to chase organised crime gangs for a few hundred thousand dollars of excise and risk a Molotov cocktail landing on their doorstep. Once the stuff is in the country, selling it is not a criminal offence, and while blowing up or torching your competitor is a very criminal undertaking, the arsonists are proving hard to catch, except when they set fire to themselves in the process, which happens quite often, perhaps unsurprisingly. In this year's budget, the federal government said it was committing $156.7 million to the "Illicit Tobacco Compliance and Enforcement Package", adding to the $188.5 million over four years that was "invested" in 2023. That's a new total of $86.3 million a year, of which $10 million will find its way to the states. Most of it goes into the welcoming arms of Border Force. But they're bringing millions to a game of billions; a knife to a gunfight. It may be that the criminals are now too rich, well-organised and violent to be shut down, but Australia's governments can hardly give up. Confronting crime and large-scale tax avoidance is not an optional activity for the government. The only state that is coming to grips with the problem is South Australia. The Malinauskas government has set up a special tobacco enforcement squad of 45 officers and given them warrant-free search and seizure powers. Members of the squad can enter a shop selling illicit tobacco or vaping products, confiscate the stock, and shut the store for three months. With an order from a magistrate, the closure can be extended to 12 months. Theo Foukkares reports that nearby legal tobacconists experience an instant uplift in sales when that happens. The Queensland government has now copied South Australia, but the other states are slow to do it. What's needed is a meeting of state and federal attorneys general and health ministers to agree on a uniform national approach that mirrors the SA laws. Everyone knows where the shops are that are selling the illicit cigarettes — this is not an industry shrouded in mystery; it operates in plain sight. The other thing the federal government could do is reduce the tobacco excise back to what it was before 2019, which would lead to a huge increase in revenue. Alan Kohler is a finance presenter and columnist on ABC News, and he also writes for Intelligent Investor.
