More taxes for smokers. Source: Herald Sun
SMOKERS will be forced to cough up an extra $1.3 billion a year in tax to help Kevin Rudd plug an ever-deepening budget black hole and alleviate pressure on the health system.
From December this year the average price of a packet of cigarettes will rise by $1 - and will continue to increase to $5.25 more a packet by 2016, in a staged increase over four years of 12.5 per cent.
With the federal government tomorrow expected to release its pre-election economic statement - which will reveal a dramatic $8 billion in further cuts to plug the continuing collapse in its revenues - the tax grab on smokers will deliver an extra $5.3 billion to Treasury coffers.
Treasurer Chris Bowen last night confirmed the measure, and admitted that while it was being sold as a policy to deliver health benefits it would alleviate pressures on the budget.
"This increase in excise serves several purposes: 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," Mr Bowen said.
"I think the Australian people would agree that we need to consider all sorts of measures to reduce the impact of cancer caused by smoking."
Mr Rudd last hit smokers with a tobacco excise increase in 2010 when he raised taxes by 25 per cent. The government has since forced through the toughest packaging laws in the world to try to get people to kick the habit.
The public health cost of smoking is estimated to be more than $30 billion a year, killing an average of 15,000 people annually. The government claims that 750,000 hospital bed days per year are attributable to tobacco-related diseases.
The Coalition is expected to support the measure, having already announced it would "tick and flick" the majority of the government's revenue measures and spending cuts because of what it claimed was a "budget emergency".
The only exception so far has been the bungled $1.8 billion crackdown on tax breaks for salary-packaged vehicles - which has infuriated the motor vehicle industry.
"My view is we'll wait and see but the interesting thing about this government is that it can't control its own spending; therefore it always looks to increase taxes on the Australian people," Opposition Leader Tony Abbott said.
Health Minister Tanya Plibersek yesterday admitted tobacco tax rises hit lower income earners harder, but said these people were more price sensitive and therefore more likely to be encouraged to kick the habit.
"We know that increasing excise is the single most effective way for government to reduce premature death and disease due to smoking," Ms Plibersek said.
"This is a significant public health measure that will also help to build on the government's record investment of an extra $4.1 billion for world class cancer care here in Australia since 2007.
"Lower smoking rates will help to reduce rates of cancer, heart disease and stroke."
Mr Rudd yesterday said stopping people smoking would be a key health priority.
"We need to get serious on this major driver of cancer in Australia and around the world," Mr Rudd said.
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