Australia - will the federal tax on cigarettes increase..

May 30, 2009 - The 2009 to 2010 Australian federal budget was released on 12 May 2009 by the Treasurer of Australia, Wayne Swan. Swan has commented that the budget will be tougher than in previous years. "Projected government revenue has fallen by $200 billion since the last budget because of the global economic crisis."

In his response to the budget Malcolm Turnbull, opposition leader, presented the opposition's anti-tobacco plan that would push up the price of a packet of cigarettes by 12.5 per cent (about a 6 percent increase), from $13.85 to $14.85 - or about three cents a cigarette. Currently taxes on a packet of 20 cigarettes are $4.86.

Maurice Swanson, tobacco control spokesperson for the Heart Foundation, said the "Tobacco tax, which has not increased in real terms for a decade, has been shown to reduce smoking rates significantly."

Professor Harry Clarke: "There are good public health and public finance reasons to support an increase in tobacco taxes."

Of the 2.8 million Australians who currently smoke everyday at most about 42,000 to 84,000 will quit. This is a worthwhile response at least in terms of health outcomes particularly as it is likely to be concentrated among younger smokers who will substantially improve their lifetime health by quitting. Health benefits for those who 'cut back' but do not quit are less clear-cut since there is evidence that those who cutback 'compensate' in their smoking behaviour by puffing harder to gain the levels of nicotine that their brains have adapted to. Smoking harder, of course, means a higher intake of the deadly carcinogens that accompany nicotine intake. This emphasises that there is no safe level of smoking.

Health Minister Nicola Roxon says the Liberals' (the opposition party) suggestion to increase tobacco taxes is a good idea.

A 12.5 per cent tax hike on cigarettes would help people quit smoking and boost Government revenue, Federal Health Minister Nicola Roxon says. The coalition has said it would replace the Rudd government's forecast $1.9 billion in savings from paring back access to the private health insurance rebate with a 12.5 per cent increase in the tobacco excise - a tax of three cents per cigarette.

But Ms Roxon said Mr Turnbull was inconsistent for suggesting a rise in tobacco taxes after the coalition blocked in the Senate government measures to increase taxes on pre-mixed alcoholic drinks.

The Prime Minister of Australia Kevin Rudd has rejected Malcolm Turnbull's tobacco tax hike.

References: Tobacco tax proposal deserves support, Australian Broadcasting Corporation (ABC) News, 5/26/2009. 12.5 per cent cigarette tax hike to help more quit: Roxon, The Courier-Mail, 5/17/2009; Government, Opposition set sights on vice with higher taxes on cigarettes, alcohol by Cathy Alexander, The Daily Telegrapgh, 5/17/2009.

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