Australia’s tax on the tobacco industry hits an all-time high

Image Source: Quit WA

By David McManus Jr | @davidmcmanusjr 

Australia is now the most expensive country to purchase cigarettes in the world.

At the rate of one standard cigarette (weighing approximately 80 grams), Australian smokers pay $0.81775 in taxation per stick as of the beginning of March.

In addition, RYO (Roll Your Own) tobacco is taxed at a rate now relative to tailored cigarettes, making the initially cheaper method for smokers a now equally expensive way to manage addiction.

The citizens paying the most because of tobacco taxation are Aboriginal Australians, those afflicted with mental illness and those in lower socio-economic standing. 

“The government only care about taxing the little guy, even Labor, as opposed to the upper end of town,” said Daniel O’Gorman, a citizen from Port Adelaide and a pack-a-day smoker hindered by bi-polar disorder.

Senator David Leyonhjelm of the Liberal Democrats delivered a speech to the Senate in late 2014, regarding the comparative expenses of smoking to the Australian taxpayers to the net gain as a result of Labor’s tax policy.

His estimation – at the time of the speech – was that the excise duty contributes $8 billion dollars towards the economy, $320 million towards healthcare costs, and $150 million in bushfire control relative to the yearly rainfall.

Senator Leyonhjelm’s estimates differ extraordinarily from those given by Labor Prime Minister at the time, Kevin Rudd, who put forward a figure of $35 billion in estimating the cost of smoking.

From 2013 onwards, the 12.5 per cent yearly increase on cigarette taxation came into effect, changing the cost of the market prices for good, with the intent to help cover costs and dissuade Australians from taking up the habit.

However, Australia’s monetary increase over 2013 to 2016 only demonstrated a 0.2 per cent decrease in the annual smoking rate, which is eclipsed by Iceland, Norway, USA, England, Canada, and New Zealand.

In a News.com article, Australian Tobacco Harm Reduction Association GP Dr Joe Kosterich said that if anything, there may have been a slight increase as a result of migration.

“In [Australia in] 2013 and 2016 there’s been virtually no change. Some people are saying there might have been a very small increase in the number of smokers — that’s partly due to migration,” he said.

“If we look at other jurisdictions, they’ve pretty much done similar things to what we’ve done; similar increase in taxation, banning smoking in public places, smoking health education. All of these things are really important moves but you then reach a point where you’re not going any further.”

Despite the poor results of the tobacco crackdown, the government has no plans to lower duty rates, or the additional GST on tobacco items.

“We want people to stop, we want more people to give up, we want more people who are in difficult circumstances to give up as well because we know that smoking kills people,” Labor’s Shadow Minister for Health and Medicare, Catherine King, told the ABC.

“The World Health Organisation will tell us, as our own national tobacco strategy does, that you do need to continue to ramp up the excise on cigarettes if you are going to continue to drive smoking rates down.”

 

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