PHILLIP HUDSON
AUGUST 01, 2013
HERALD SUN
SMOKERS will cough up an extra $5.3 billion in tax to help the Rudd Government plug a huge new hole in its Budget.
The unusual election-eve notice of a tax grab, adding $5.25 to the price of a pack of 20 cigarettes over four years, is being sold as a step up in the war on smoking-related cancer, which kills 15,000 people a year.
Treasurer Chris Bowen will today announce staged 12.5 per cent tax increases, starting on December 1, aimed both at deterring young people from taking up the habit and helping to repair the Budget.
From today, smokers and drinkers will also face a $50 million tax slug.
There will be an excise rise of 6c to 15c for a pack of cigarettes under automatic half-yearly indexation of the so-called “sin taxes”.
Drinkers will be hit with a 13c tax rise on a slab of full-strength beer.
The tax man will collect an extra 16c on a bottle of spirits. And the tax on a case of ready-to-drink mixed spirits leaps by 27c.
The Government’s nicotine fix will be a key part of an economic statement to be delivered in coming days.
There has been an estimated $20 billion deterioration in the Budget since it was delivered in May.
The razor gang has been looking at spending cuts and tackling tax breaks.
Mr Bowen said the tobacco tax rise would be on top of regular indexation.
“It provides funds for cancer-related health services; it deters young people from taking up smoking; and of course, it alleviates some of the revenue impacts on the Budget. There is not a family in Australia that hasn’t been touched by cancer caused by smoking.”
Prime Minister Kevin Rudd, who said his mother was a non-smoker who died from passive smoking, said it was a leading cause of preventable death and disease.
He said 30 per cent of cancers were linked to smoking.
And there was an “extraordinary cost” to the public hospital system. It accounting for 750,000 hospital bed days a year, costing the economy $31.5 billion a year.
Three years ago Mr Rudd imposed a 25 per cent increase in tobacco tax, adding about $2 to a pack’s price.
The PM said the Government was spending $1.5 billion on cancer research, including $426 million on the Victorian Comprehensive Cancer Centre and on cancer centres in Ballarat and Gippsland.
Opposition Leader Tony Abbott said: “This government can’t control its own spending; therefore, it always looks to increase taxes.”
Australasian Association of Convenience Stores chief Jeff Rogut accused the Government of “a cynical smokescreen for revenue-raising”.
But the Heart Foundation and lobby group Action on Smoking and Health said the price rise would “save lives, reduce consumption and boost revenue”.
The Heart Foundation’s Maurice Swanson said the tax rise three years ago led to an 11 per cent fall in smoking.
The Institute of Public Affairs senior fellow Dr Julie Novak said that a tobacco tax increase punished lower-income families, who “pay up to three times as much as wealthy families in nanny state taxes”.
But Mr Swanson said: “It’s a myth that poor smokers will be disadvantaged by a tobacco tax rise. They’re the ones who are suffering most from tobacco,” he said.
Today’s changes will see the excise on a pack of 20 cigarettes rise 6c to $7.15 and on a pack of 25s by 7c to $8.93.
The taxman collects $10.72 for every pack of 30s, up 9c.
Beer drinkers will pay 13c extra tax for a slab, taking the Federal Government’s share to $15.34. The tax on a bottle of spirits is up 16c to $20.21.
There’s no change to the tax on a beer served across the bar in a pub or club.
HOW MUCH MORE TAX YOU WILL PAY
Cigarettes
Pack of 20 – up 6c
Pack of 25 – up 7c
Pack of 30 – up 9c
Pack of 40 – up 11c
Pack of 50 – up 15c
Spirits
700ml bottle – up 16c
Slab, 24 ready-to-drink cans – up 27c
6-pack, ready-to-drink cans – up 7c
375ml ready-to-drink can – up 1c
Full-strength beer
Slab of 24 cans – up 13c
6-pack of cans – up 3c
285ml glass – no change
Light beer
Slab of 24 cans – up 4c
6-pack of cans – up 1c
285ml glass – no change
Source: ATO
*excide changes effective August 1
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