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Smoking tax rise would 'hurt the poor' -

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Smoking tax rise would 'hurt the poor'

The World Today - Monday, 28 April , 2008 12:28:00

Reporter: Ashley Hall

ELEANOR HALL: The Federal Government is relying on basic economics to try to deal with the problem
of binge drinking. It has raised the price of ready-mixed drinks, in the hope that fewer teenage
girls will buy them.

Now a public health expert wants the Government to lift the price of cigarettes too, in order to
encourage more people to quit smoking.

But welfare groups are warning that it will be the poorest people who would bear the cost of such a

Ashley Hall has our report.

ASHLEY HALL: Any talk about raising the price of cigarettes or alcohol is sure to spark a volatile
response in Australia.

And these callers to ABC Local Radio in Melbourne are a prime example.

CALLER 1: The kids are really not that fussed. If they want to drink, they'll have a drink, the
dollars are just going to be another bucket the Government's coffers, really.

CALLER 2: I have spent the last six years in Sweden where they have an alcohol monopoly and
enormous taxes on alcohol, and it does not affect the levels which people drink.

CALLER 3: I'm 15 and I don't think the Government should do that because not just for kids, but
adults are going to get annoyed that it's going up and kids are, you know, $2 extra isn't that

ASHLEY HALL: They're responding to the Federal Government's move to increase taxes on pre-mixed
drinks to curb binge drinking, especially by teenage girls.

So will it work?

Dr Anthony Shakeshaft is a senior research fellow at the National Drug and Alcohol Research Centre.

ANTHONY SHAKESHAFT: Whether that specifically will impact on young people as opposed to the
population generally, is an open question.

ASHLEY HALL: The chair of the Federal Government's Preventative Health Task Force, Dr Rob Moodie is
a lot more positive.

ROB MOODIE: I think it's a very, very good idea. We know that by increasing taxes on harmful
products, then the potentially harmful products that will decrease consumption.

ASHLEY HALL: And Dr Moodie wants to extend the plan to cigarettes.

He says increasing taxes on cigarettes could raise $400 million a year for the Government, and it
could cut smoking related health costs too.

ROB MOODIE: It hasn't increased over the last 10 years. It's now the time we did increase the cost
of cigarettes, after all, the major killer in Australia and we know that if for example we added an
extra 2.5 cents to every cigarette stick, that would across the board, that would drop consumption
by nearly three per cent.

ASHLEY HALL: But the plan is causing concern for The Australian Council of Social Service.

ACOSS president Lin Hatfield Dodds says increasing the price of cigarettes could unfairly target
poorer people locked in a tobacco addiction.

LIN HATFIELD DODDS: People with not very much discretionary come at all, who are spending a
proportion on cigarettes are going to find it harder to make ends meet in terms of their rental
obligations, in terms of all the extra bits the need to send their kids to school.

ASHLEY HALL: Professor Simon Chapman of Sydney University's School of Public Health questions that

SIMON CHAPMAN: I think this is a particularly perverse argument because of the corollary of it of
course is that if he didn't want to harm the poor with price rises, you'd put the price of
cigarettes down.

ASHLEY HALL: ACOSS wants any money raised by increased taxes on alcohol and cigarettes to be
funnelled into programs to help poorer families.

LIN HATFIELD DODDS: Going straight into the essential supports and services that low income and
struggling Australians need to assist them to make ends meet.

ASHLEY HALL: Hiking the tax on cigarettes is an idea that was floated by health experts at the 2020
Summit. They argue the money raised could help fund preventative health strategies.

Simon Chapman agrees.

SIMON CHAPMAN: The most obvious thing to do would be to open up a scheme such as we've seen in the
city of New York and also in New Zealand where people are given free access to nicotine replacement
therapy for a limited period of time.

ASHLEY HALL: A spokesman for the Federal Minister for Health Nicola Roxon says she has no further
plan to boost the price of alcoholic drinks or cigarettes.

And he says she'll wait to see the full details of Dr Moodie's call to increase cigarette taxes
before she enters the debate.

ELEANOR HALL: Ashley Hall with that report.