Health Minister Mark Butler announces tax hike for tobacco products

Australian smokers are set to pay more for cigarettes and other tobacco products under a tax hike announced by the Health Minister.

Tobacco companies will have to pay an additional $3.3bn in tax over the next four years in a bid to drive up the price of cigarettes and stop Australians smoking.

Health Minister Mark Butler used his speech to the National Press Club in Canberra on Tuesday to announce the government would increase the tobacco excise by 5 per cent over the next three years from September 1.

Describing the approach as being aimed at “knocking out the market” rather than blaming customers themselves, Mr Butler said the government was determined not to see the price of cigarettes become more enticing.

“The excise stopped increasing in about 2020 and since that time, excise increases have actually started to lag inflation, particularly last year,” he said.

“We know that a higher price cigarette is a more unattractive cigarette.”

Along with the excise hike, the commonwealth will also start taxing tobacco products such as roll-your-own tobacco and manufactured cigarettes uniformly.

Together, the reforms are forecast to raise an additional $3.3bn over the next four years including $290m worth of GST payments to the states and territories.

Health Minister Mark Butler has announced a tax hike on tobacco products. Picture: NCA NewsWire/Martin Ollman

Some of these savings will be reinvested in lung disease prevention in the Albanese government’s first full federal budget, which will be handed down next Tuesday.

The federal government will invest $260m of the money it saves into a new national lung cancer screening program, which Mr Butler said would prevent more than 4000 deaths caused by the disease.

At risk Australians — including former vapers as well as former cigarette smokers of a certain age — will be able to get a lung scan every two years, as recommended by the independent Medical Services Advisory Committee.

Additionally, $240m will be set aside for measures to address lung cancer in Indigenous people, with funding promised to ensure mainstream cancer services are “culturally safe and accessible” and to bolster Aboriginal community controlled health services.

Mr Butler said state and territory health ministers had made a “unanimous” commitment to work together on vaping and tobacco control at their meeting on Monday.

However, he said the government had no plans “at this stage” to follow New Zealand in phasing out cigarette smoking by introducing a ban for younger residents based on birth year.

Mr Butler also flagged a crackdown on illegal vaping. Picture: NCA NewsWire/Martin Ollman

Next week’s federal budget will also include funding for a range of measures aimed at stamping out the illegal vaping trade which has seen the use of e-cigarettes skyrocket among young Australians.

The government will spend $30m on support programs to help Australians quit smoking cigarettes and vapes as well as $63m for a national evidence-based information campaign that will target young people.

Mr Butler said one in six teenagers aged between 14 and 16 and one in four Australians aged between 18 and 24 had vaped.

“Vaping was sold to governments and communities around the world as a therapeutic product to help long-term smokers quit,” Mr Butler said.

“It was not sold as a recreational product — especially not one for our kids. But that is what it has become: the biggest loophole in Australian history.”

The government is planning a major crack down on black market vapes which are imported from overseas and readily available at retail outlets around the country.

Single use, disposable vapes will be banned and more doctors given the ability to prescribe prescription vapes to patients who need one to help them stop smoking cigarettes.

The new rules will also include restrictions on the flavours and colours of vapes that can be sold in Australia as well as tougher border controls.

Originally published as Health Minister Mark Butler announces tax hike for tobacco products