Smokers targeted by Shorten and Labor to spare GST hike

THE $40 packet of cigarettes is on the way if Labor gets hold of the federal excise system and implements the ultimate sin tax.

smoking cigarette

THE $40 packet of cigarettes is on the way if Labor gets hold of the federal excise system and implements the ultimate sin tax.

The Budget could be healthier by close to $50 billion in the medium term, and the high cost of smoking-induced illnesses would be reduced, according to Labor calculations.

Opposition Leader Bill Shorten today is arguing it would be better to hit Australia’s 2.5 million daily smokers with a sin tax than to burden all voters with a rise in the GST.

He is confirming a Labor government would increase excise on cigarettes in four stages of 12.5 per cent each from July, 2017 if it wins next year’s election.

This would push the price of 25 cigarettes from $24.69 now to $40.80 by 2020. Under current excise arrangements, the price would be a relatively modest $29.91.

That means a single cigarette could cost $1.60 instead of $1.20.

The aim would be to discourage tobacco consumption and to raise more revenue - an extra $3.8 billion in the first two years 2017-18 and 2018-19.

Labor believes smoking costs the economy $31 billion a year, and Opposition Leader Bill Shorten also wants voters to look at the dangers of cigarettes to youngsters.

“Ask any parent who smokes whether they want their kids to start smoking as well and of course they’ll say no,” he said in a statement today.

“I want to stop young people taking up smoking and I want more people to quit smoking. The difference between Labor and the Liberals could not be starker.

“Labor wants to reduce the number of people who smoke; (Prime Minister) Malcolm Turnbull’s Liberals want to increase the GST and the cost of everything, including fresh food, school fees and going to the doctor.”

Labor will use the final two weeks of Parliament to hammer the Government with claims it wants to increase the GST and apply the indirect tax to new items such as rents and fresh food.

Opposition sources say the objective is to have voters thinking of GST rises on food as they prepare holiday season meals.

The Government has not made any decision to increase the 10 per cent GST or to expand its coverage. Treasurer Scott Morrison and Mr Turnbull have consistently said it is one of several options which will be considered before the next election.

Labor says the policy would bring Australia in line with 33 other countries including the UK, France and New Zealand, where at least 75 per cent of the overall cost of a pack of cigarettes comes from taxation.

“Each year in Australia, tobacco kills more than 15,000 people and has more than $31.5 billion in health and economic costs,” said Shadow Minister for Health Catherine King today.

And the revenue boost would come even though the number of smokers would be lowered by the rising prices.

“According to the latest National Drug Strategy Household Survey, daily smoking declined significantly between 2010 and 2014, from 15.1 per cent to 12.8 per cent,” said Ms King.