Rudd hints at raising tobacco price

BEN PACKHAM
July 31, 2013
The Australian

KEVIN Rudd has given a strong hint Labor will raise the price of cigarettes in this week’s economic statement saying it was “time to get serious” about tackling the devastating health impacts of smoking.

Touring the Royal Prince Alfred Hospital’s under-construction cancer centre in Sydney today, the Prime Minister singled out smoking as a top health priority for his government.

“We need to get serious on this major driver of cancer in Australia and around the world. The legitimate question is ‘well what are you doing about it?’.

“That’s the nature of the challenge; 125,000 Australians being affected by cancer each year, 30 per cent of them afflicted through smoking-related cancers,’ Mr Rudd said.

“And on top of that you have the extraordinary cost to our public hospital system. The cost to the economy by the way is estimated to be $31.5 billion a year.”

The comments come less than a year after Labor introduced the toughest packaging of cigarettes, which is widely regarded as the world’s toughest anti-smoking initiative.

Labor has to claw back major savings ahead of the election to fund its PNG solution, its axing of the fixed carbon price and a revenue shortfall of up to $30 billion over the forward estimates.

The last big one-off increase on tobacco excise occurred in 2010 when Kevin Rudd was first prime minister.

It was a 25 per cent jump – or $2 a packet – and was linked to a drop in the Rudd government’s popularity.

A further hike in tobacco excise could risk angering the Labor base, with smokers statistically more likely to be on lower incomes and living in Labor electorates.

The Australian National Preventive Health Agency recently found the sharp reduction in cigarette smoking over recent years had occurred among the wealthy.

“As a result, in 2011-12 the smoking prevalence in the most disadvantaged areas was 2.4 times that in the most advantaged areas the comparable figure in 2001 was a little lower, at 2.2 times,” the agency found.

Treasurer Chris Bowen refused to confirm or deny the expected excise hike, but said the government had to continually look at what it could do to prevent smoking.

“There is not a family in Australia that has not been touched by cancer caused by smoking,” he said.

“I think the Australian people would agree with us that we need to consider all sorts of measures to reduce that, and of course that is exactly what the government has done and will continue to do, and we’ll make further announcements.”

Tony Abbott said Labor typically opted to raise taxes rather than make hard savings.

“It can’t control its own spending, therefore it always looks to increase taxes on the Australian people,” the Opposition Leader said.

Action on Smoking and Health Australia urged the government to follow through on the anticipated excise hike, saying it would be a win-win for Australia.

“It would raise revenue while driving down smoking rates and the uptake of smoking by children,” chief executive Anne Jones said.

The Heart Foundation said the 2010 excise hike had markedly improved health outcomes, decreasing smoking rates by 11 per cent.

But the Australasian Association of Convenience Stores condemned in advance any excise hike, saying it would hit smokers and small retailers hard.

“Raising tobacco excise has become a default answer to filling budget shortfalls,” chief executive Jeff Rogut said.

“It not only represents short sighted, lazy and uninspired economic management, it’s also having zero impact on improving health outcomes and a very negative impact on small business.”