Double hit for smokers could add $2.81 to cost of a pack

Phillip Hudson
SEPTEMBER 01, 2014
THE AUSTRALIAN

Double hit. Source: TheAustralian
SMOKERS will be slugged with a double tax hit today thanks to the Rudd and Abbott governments adding between $1.12 and $2.81 to the price of a packet of cigarettes.
Tobacco excise rises 12.5 per cent under changes put in place by former treasurer Chris Bowen and retained by Joe Hockey.
Excise also will be increased under the normal twice-yearly indexation introduced 30 years ago by the Hawke government, although it will rise in line with the new benchmark of average weekly ordinary-time earnings.
But while Labor and the ­Coalition agree on higher taxes for smokers, the opposition is ­refusing to back a smaller rise in petrol tax, which it says is a ­broken promise and would be ­unfair to motorists.
Today’s tax rise adds $1.12 to a pack of 20 cigarettes with all but 9c of that due to the tax increase announced a year ago in the final weeks of the then Labor government.
The government will take an extra $1.41 on every pack of 25, with $1.28 due to Labor’s increase and 13c courtesy of the Coalition.
Someone smoking 25 cigarettes a day will pay an extra $9.87 a week in tax, bringing the total amount of tax they pay for their habit to $81 a week.
The excise on a pack of 30 rises by $1.69, while it will be an extra $2.25 for a pack of 40 cigarettes and $2.81 for a pack of 50.
The 12.5 per cent tax rise is the second of four increases announced by Mr Bowen and former prime minister Kevin Rudd that will raise $5.3 billion across four years. The tax will go up again in September next year and September 2016.
Introducing the rise last year, Labor said it was stepping up the war on smoking-related cancer and trying to plug budget holes.
At the time Tony Abbott said Labor could not control its spending, “therefore it always looks to increase taxes”. However, it retained the tax.