Labor hazy and lazy on taxing smokers

Jack The Insider
NOVEMBER 13, 2015
THE AUSTRALIAN
This week the government and the opposition have been locked in battle over tax reform and budget repair.
Labor is in the business of trying to paint Malcolm Turnbull as a high-taxing prime minister who all the while callously strips benefits from the most needy Australians.
The argument in response is that Labor does not have a plan for tax reform or budget repair.
However, it seems Labor does have a plan — albeit a more modest one, though it has not quite yet made it to the table, possibly out of sheer embarrassment.
Earlier this week news reports indicated Labor, which promised to create a funding model for the Gonski reforms — which currently remain unfunded beyond 2017 — had found a way to do it. How? It is tossing around the idea of increasing excise on tobacco. Again.
For smokers that would mean four more years of twice annual 12.5 per cent excise rises, putting the price of a pack of cigarettes up there with a 10th of a gram of black tar heroin.
The proposal exists in the ethereal at the moment. It has not gone through shadow cabinet or the caucus but it appears to be more than a thought bubble.
Regardless of what you think about the act of smoking, it is not illegal. It is a choice people make and given over 40 years of frank and often terrifying health warnings, it is an informed choice.
No one could possibly argue that tobacco is taxed fairly or proportionately in relation to other choices people make that are potentially as dangerous — the booze and the punt to name but two.
Tobacco excise hikes have probably done more than anything else — certainly more than plain packaging — to reduce smoking rates in Australia. That and the omnipresent health warnings have contributed to smoking rates falling from the mid 30s in the mid 1970s to less than half of that now.
Presumably any further excise hikes will lead to further drops in smoking rates so we are dealing with the laws of diminishing returns. If excise hikes are a genuine incentive for smokers to pack it in, then smoking rates will decline at a faster pace and total government receipts will diminish in turn.
It is an act of political cowardice to raise excise on tobacco. When you have smoking rates at around 15 per cent of all Australians — only some of whom are of voting age (the statistics on smoking include people aged 16 or more) — you are dealing with an absolute minority and it is easy to demonise the choices smokers make every day and expect no substantial electoral backlash.
But if there is some negative reaction, politicians quickly shroud themselves in the cloth of public health advocates and claim that smokers are scofflaws who place burdens on non-smokers in public health and ancillary social costs.
As it stands, smokers paid just on $9 billion in excise in the last financial year and every year that figure grows. You can look at this a number of different ways, of course, but if we look at public health and particularly the cost of Medicare ($19bn this year), smokers are not a burden on public health, they are bankrolling it.
Smokers are the go-to soft targets of all public policy makers, left and right in Australia. Just look at the recent move to ban smoking in prisons and what a colossal stuff up that has been.
To argue that a ban on smoking in prisons has some public health benefit is bordering on the bizarre.
After the smoking ban in Queensland kicked in, prisoner-on-prisoner attacks doubled. In Tasmania, the ever-innovative prisoners armed with their state supplied nicotine patches discovered the patches when placed in a microwave oven and then rubbed in with tea could be made into a passable cigarette. Microwave ovens started blowing up all over the place.
In Victoria, a riot in a remand centre substantially caused by the smoking ban cost the people of Victoria $20 million in repairs.
We all know why policy has been directed down this path. State governments fear a stream of litigation from people who claim to have contracted serious illness from passive smoking. Public policy has fallen foul to the risk assessors, the same folk who lock up the swings and slides in public parks not in fear of children hurting themselves but because if they do, local and state governments could be exposed to litigation.
Today’s smoking laws are based simply on the notion of reducing the state’s liability.
In New South Wales, a ban on smoking in prisons does not include prison guards and corrective services staff who can happily smoke away outdoors but this apparently does not contribute to any public liability. The price of a packet of smokes on the black market in a NSW prison has gone up to $300 since the ban came in on August 10.
When confronted with these issues, politicians and public health advocates alike assume the role of white knights, as if saving criminals from themselves is a worthwhile activity of the state. Maybe they will one day look on proudly while a con steps up and says, “I am a dangerous, violent criminal but I have the lungs of 17-year-old.”
I mean, really. This is how distorted public policy in relation to smoking has become.
And it gets worse, because smokers have become a giant ATM for political parties, the Labor Party especially so.
Adding to the tax burden smokers already pay is downright lazy public policy and is an attack on many people Labor would normally regard as their core constituents.
If Labor moves forward and formally announces the continued rise in tobacco excise to pay for the Gonski reforms beyond 2017 as policy, it will be more evidence if it was needed, the party has run out of ideas.