Landlords who knowingly allow their tenants to sell illicit tobacco and illegal vapes could be fined up to $165,000, sentenced to up to a year in prison or both, under legislation planned by the New South Wales government.
The changes, expected to be introduced to state parliament this week, would create an offence for commercial landlords who do not notify authorities or take steps to evict a tenant running illicit tobacco and vaping businesses from their premises.
They follow the first stores being shut down in Sydney last week under state laws cracking down on a spiralling black market for cigarettes and vapes, amid a $3.3bn hole in the federal government’s finances from the declining legal tobacco excise.
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The NSW health minister, Ryan Park, said the proposed penalties were the result of a consultation with landlords, retailers and health advocates, and struck “a fair and reasonable balance”.
“We know that the vast majority of landlords do the right thing – but those bad actors out there not only undermine legitimate business, they also expose communities to criminal activity.”
Two stores in Sydney’s northern suburbs became the first to be shut down last week under powers which came into effect on 3 November, allowing officers to close stores for up to 90 days and seek closures of up to 12 months through the courts.
Landlords are now able to terminate leases where closure orders are in place. Other changes include a new offence for the possession of a commercial quantity of illicit tobacco, with a maximum penalty of over $1.5m and seven years’ imprisonment, or both.
Last week, Park said closures would “be done every day for the next few days and weeks ahead”, but said it was important to “manage expectations”.
The NSW government has said it is uncertain how many unlicensed retailers selling tobacco there are in the state, after initial estimates of about 19,000.
The NSW chief health officer, Kerry Chant, has said this likely included former retailers who had not deregistered from the previous scheme.
A new tobacco licensing scheme also requires retailers to display a valid licence at the point of sale or risk fines from $11,000 to $44,000.
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About 4,500 had obtained a licence under the new scheme when the changes came into effect on 1 October following a three-month grace period. Last week, Chant said this had increased to about 6,000.
She said one of the first two stores closed did have a licence under the new scheme. “Just because someone is licensed, you shouldn’t be complacent,” she said.
Park and the NSW premier, Chris Minns, have called on the federal government to lower the tobacco excise. The federal treasurer, Jim Chalmers, has rebuffed calls, saying he did not think the answer was “to make cigarettes cheaper for people”.
Minns told the ABC last week the excise was the “leading reason” for the recent boom in illegal tobacco use, which had seen Sydney “going back to the 90s”, with people congregating outside office blocks and football games to smoke.