Government not ruling out tobacco tax hike, despite former PM’s claims it’s a “workers’ tax”

SMOKERS could be paying more for a packet of cigarettes after next month’s budget, after Christopher Pyne argued that high tobacco taxes had positive health effects.

Minister for Industry, Innovation and Science Christopher Pyne and Assistant Minister for Science, Karen Andrews MP hold a press conference regarding the latest anti-dumping decision on imported steel, at Parliament House in Canberra.

INNOVATION Minister Christopher Pyne has talked up the benefits of a tobacco tax hike, as speculation mounts that increasing the excise is part of the government’s Budget plan.

Labor’s plan to push up the price of cigarettes to $40 over the next four years has previously been criticised by former prime minister Tony Abbott as a “workers’ tax”.

But Mr Pyne said today reducing the number of smokers would lower health costs for all Australians.

“We have very high tobacco taxes, but we also have found, as a Minister for Health in the Howard Government ... one of the most significant ways of reducing health costs is to reduce the number of smokers,” he told Channel Nine.

“It makes a direct impact on the cost to health on the rest of the community.”

Treasurer Scott Morrison and Minister for Finance Senator Mathias Cormann who will hand down the Budget on May 3. Picture: AAP Image/Richard Wainwright

Mr Pyne refused to reveal whether or not increased tobacco taxes would be announced in the Budget, but perhaps hinted any excise hikes would be smaller than those proposed by Labor which he described as “massive”.

Labor claims its plan would raise $105 billion over a decade.

Opposition Leader Bill Shorten accused the government of backflipping on tobacco tax, but said he didn’t mind if they adopted Labor’s “sensible” policy.

“Mr Turnbull should take up some of Labor’s other ideas,” he said.

“Reform negative gearing tax laws, go ahead with a tobacco excise increase, clamp down on excessively generous tax concessions to people who already have millions of dollars in superannuation.

“While he’s at it, he should pick up the rest of Labor’s sensible and well funded plans.”

Finance Minister Mathias Cormann also wouldn’t rule out increasing taxes on cigarettes today.

“I’m not going to go into specific measures in the Budget,” he told Sky News.

“The Budget will be delivered on the third of May but what I can say is that our focus has been on strengthening growth, creating more jobs, and as such our focus has been on improving the way we raise the necessary revenue for government, not on increasing the overall tax burden in the economy.”

“Because what we are seeking to do is by improving our tax mix, by making our tax system more growth friendly.”

Treasurer Scott Morrison said all savings and revenue measures would be announced in the Budget.

“But what I can tell you is, where the Government makes moves in whatever areas we may, what we will be doing is ensuring we’re reinvesting in ensuring that there is a fairer and better and lower tax burden for Australians,” he said.

It comes after a warning from ratings agency Moody’s yesterday that increasing national debt would jeopardise the nation’s AAA credit rating.

Originally published as Government not ruling out tobacco tax hike, despite former PM’s claims it’s a “workers’ tax”