ANDREWS, Mr Tim, Executive Director, Australian Taxpayers' Alliance

[12:02]

CHAIR: We now welcome a representative from the Australian Taxpayers' Alliance. Do you have any objection to being recorded by the media if they are present here today?

Mr Andrews : No.

CHAIR: I remind you that these are formal proceedings of the parliament and the giving of false or misleading evidence is a serious matter that could be considered contempt of parliament. Today's proceedings will be recorded by Hansard and attract parliamentary privilege. The Taxpayers' Alliance has a very keen interest in health related issues, by the depth of your submission. Would you like to make an opening statement?

Mr Andrews : Yes. Thank you for the opportunity. Presently 240,000 Australians are trying to quit smoking through the use of vaping technologies. This is understandable. Smoking is the leading preventable cause of death in Australia. Two-thirds of smokers will ultimately die from it. Smoking rates are the highest for the lowest income earners in Australia. A smoker on Newstart, on average, will spend over half of their weekly income on tobacco. So of course people wish to quit smoking, and many—such as these 240,000 who are choosing to do it—choose to quit smoking with a technology proven to be safer than smoking and with a 73 per cent higher success rate than willpower and nicotine replacement therapies. Yet these 240,000 people in Australia who are vaping with nicotine are breaking the law.

The use of nicotine in personal vaporisers without prescription in Australia is illegal in all states and territories. In Western Australia, the penalty for this is $45,000. In the ACT, it is $30,000 or two years imprisonment. Here in Victoria, it is only $15,546. People are being prosecuted for it. These vaporisers are being stopped at the border. The Queensland government has a tip line to dob in people who are vapers. This is the cost for trying to save your life.

It's clear from the evidence that Australia's current efforts to reduce smoking rates have stalled. Despite plain packaging and despite us having some of the highest cigarette taxes in the world, for the first time ever—or at least in the last few decades—the number of smokers in Australia has increased since 2013. Between 2010 and 2013, smoking rates fell by 300,000. Since 2013, they have increased by 21,000. This is the first time it has happened. While in the EU, the UK and the US smoking rates are going down considerably, in Australia they have plateaued. And the difference is vaping. Australia's outdated regulatory regime is literally costing lives.

On Tuesday of this week, a study in the journal of Tobacco Control found that in the United States, compared to the status quo, replacement of cigarettes by e-cigarettes over the next 10 years will yield up to 6.6 million fewer premature deaths. Translating this, roughly, to Australia's population, this is half a million people. Once again, I wish to stress this: we're talking about half a million lives that can be saved by a greater take up of vaping over the next 10 years. We're not talking about the perception that some people have that these are hipsters in the inner suburbs. This is about saving lives, particularly those who are sick, those who are struggling to quit and can't, the vulnerable and the low-income earners in society.

What we need is evidence based policy in Australia and not policy based on fear and myths—fears such as that it is a gateway drug or it will be taken up by non-smokers. Current use of electronic cigarettes by adults who have never smoked in the US and the UK is 0.3 percent. Other studies around the world have found it to be between 0.1 0.5 per cent. Dr Gartner from the University of Queensland stated a few weeks ago that current evidence had not shown an increase in youth smoking since the increase of vaping in the US or the UK. Another study released on 25 September this year by the Society for the Study of Addiction once again looked at vapers between the ages of 19 and 23 and concluded that e-cigarette use was not associated significantly with later conventional smoking, either direct or through nicotine dependence.

Similarly, study after study have shown vaping to be safer than smoking. Without the carcinogens in smoke, the actual burning, the tar and the combustibility, the vast majority of problems disappear. The most cited work by the UK Royal College of Physicians is that it is 95 per cent safer. This number is in dispute. There was a study a few months ago by Professor Stephens from the University of St Andrews who said it was only one per cent that of smoking. But whether it is 70 per cent, 85 per cent, 99 per cent or 60 per cent, that doesn't matter. What isn't in dispute, even by the people who oppose this, is that they are safer than smoking. They are a safer alternative. Applying the precautionary principle because some people might quibble about the exact percentage that they are safer and believe that we need 20 more years of studies is, I would argue, an immoral thing. It is immoral and it is definitely precautionary to force people to keep smoking. This is why public health groups, medical bodies and governments around the world are actively promoting vaping.

For Stopober in the United Kingdom the UK government will be funding TV ads calling for people to take up vaping. As part of this campaign, Professor John Newton, Director of Health Improvement of Public Health England, which is part of the National Health Service, has said:

The evidence is clear - vaping is much less harmful than smoking - a fraction of the risk.

So, if you've struggled with quitting before, an e-cigarette may be the best option for you.

Indeed, as well as running TV ads, the UK government is now looking at changing advertising rules to allow for more promotion of these products. The British Lung Foundation, Cancer Research UK, NHS Scotland and the Royal College of Physicians are all on board. The New Zealand Medical Association has stated:

It is likely that e-cigarettes will be an effective tool for smokers who want to quit. There is general scientific consensus that the exclusive use of nicotine-containing e-cigarettes is considerably less harmful than smoking.

Just last month, the Drug and Alcohol Nurses Australasia released a statement supporting the use of these technologies and telling nurses to provide advice to patients that they deliver nicotine in fast, safer forms, and may help them to quit. A letter came out last night signed by 62 prominent Australian medical professionals, health experts and academics calling for change in this law, citing 30 new studies that have come out this year since the start of January that have all shown new evidence that this is a positive way forward.

This isn't a question about smoking versus non-smoking; this is about harm reduction. Abstinence only has failed. We cannot continue to wait on abstinence only. If we want to genuinely help save lives, the evidence is overwhelming and isn't in dispute. This isn't a question of ideology or politics or left versus right. This is an issue of morality. It's a question of fairness and of taking this new technology and using it to save lives. We would strongly urge the committee to issue a bipartisan recommendation to embrace reform and legalise these life-saving devices in Australia, because the evidence shows that half a million lives depend on it.

I also have a number of documents that I'm happy to table which I think will be useful and which I referred to in my opening remarks.

CHAIR: You can provide them to the committee secretariat at the end of your evidence.

Mr Andrews : Just to record them, I have the letter with the 30 new academic studies that have come out; a list of state and territory penalties in Australia; the Drug And Alcohol Nurses position statement; and also a list of things I have been given which are cases where they've been stopped at the border and confiscated, just to say that this is actually occurring.

Mr ZAPPIA: Mr Andrews, just on that last comment about being stopped at the border, are you referring to the border between the states or the border between Australia and the rest of the world?

Mr Andrews : Australia and the rest of the world.

Mr ZAPPIA: Do you know what the smoking rates in the USA and the UK are compared to in Australia?

Mr Andrews : The United States has fallen below Australia for the first time in decades. For most of the last several decades the US had a higher smoking rate. They've just fallen below Australia. Off the top of my head I cannot give you the exact rates. I can take it on notice and provide to the committee the exact number.

Mr ZAPPIA: The USA doesn't have plain packaging, from my understanding.

Mr Andrews : Correct.

Mr ZAPPIA: I think the UK is looking at introducing plain packaging, if it already hasn't done so. I know they were looking at it.

Mr TIM WILSON: The US doesn't even have graphic warning labels. It was overridden by the Supreme Court.

Mr ZAPPIA: Sorry?

Mr TIM WILSON: The US doesn't even have graphic warning labels.

Mr ZAPPIA: E-cigarettes have been legal in the USA for how long?

Mr Andrews : They've been around for about five years. That would be the time since they've become popular. They have been around and legal for longer. The FDA has recently issued new guidelines to allow for greater availability.

Mr ZAPPIA: Getting back to the prosecutions, you quoted some figures about the fines related to the sale of e-cigarettes or at least the nicotine associated with them. Were any of the prosecutions you were referring to earlier on related to state-based prosecutions?

Mr Andrews : The prosecutions are primarily done by the state with reference to the federal legislation. The state acts refer to being in possession of a schedule 7 substance—if you use, possess or obtain it. So if you change the federal regulatory regime that will have flow-on effects to the states.

Mr ZAPPIA: Is it your submission that e-cigarettes should be made available in the same way as normal tobacco cigarettes, or is it the case that you would support a licensing or regulated regime where the TGA approves the licensing or the issuing of them so that they have to be TGA approved before they can be sold?

Mr Andrews : That's a very good question because this is one of the elements of debate at the moment. We would argue very strongly that the TGA model is a bad model. It is essentially as bad as the status quo, and there are a number of reasons for this. First of all, I would note that at present you can technically buy these products with a prescription or through a compound pharmacy. There is one provider in Australia, Nicopharm, that does this. We can see from the fact that almost nobody uses it that this is a model that isn't working. I'll go into a bit of detail.

The first is the cost to the healthcare system. If you have the TGA process you need a doctor's prescription, so you have bulk billing costs to Medicare as well as costs to the individual. That's a significant cost burden on the healthcare system of Australia.

Secondly, we are talking about somebody who at the moment can go to their local servo and buy a packet of cigarettes. If they're trying to quit, they think: 'Oh, I've run out! I need to schedule an appoint with my doctor, go to visit the doctor, see the doctor, pay for the doctor if they're not bulk billing, then go to the pharmacy and hope the pharmacy is selling something at the time that it's open, because it might be out of hours.' If we are trying to stop people from smoking, giving them so many hoops to go through just to buy something doesn't really work.

Thirdly, by doing this it's sort of a one-size-fits-all model. One of the reasons there is such a take-up of these is that different flavours, different compounds and different tastes suit different people. You can tailor these to your individual preferences. If you have a one-size-fits-all generic script, a lot of people aren't going to take that up.

Similarly, if we're trying to stigmatise smoking, whereas this doesn't have the stigma attached to it, treat it through that medical route, where it will have similar stigmas and you won't have that level of uptick. In many countries around the world, like the UK, you have this option as well—the therapeutic route. There was one company that did it through the therapeutic route and they ended up going bankrupt because people didn't buy their products. So the fact that you have these options in other countries and nobody is taking them up should show what the situation is. We've had this therapeutic model in Australia for 30 years. We have nicotine inhalers; we had to have gums; we have patches. We have all of these other regulated product and we still have millions of smokers in Australia.

The last point I would note is the bureaucratic cost to have this approved. If small vape distributors need to go through bureaucratic scripts to have an approved process, the costs involved, the regulation involved and the incredibly high bar, which is almost so high that it's setting it up to fail—that's another problem with that model. So, for all of these reasons—the international comparisons, the cost to the taxpayer, the issue with consumers—if we go down that model, it will essentially, we submit, be the same situation as the status quo. We won't have the benefits that we're looking for.

Mr ZAPPIA: Lastly, you might have heard the evidence from the previous witnesses, who said that the number of people likely to be using e-cigarettes in Australia is very, very low. Given that they are so readily available online, why do you think more people are not buying the e-cigarettes from overseas?

Mr Andrews : I think first of all a lot of Australians are law-abiding people who don't want to break the law. When you have something that's illegal, that's a fairly strong impediment to people purchasing these products. Secondly, it's a hassle. You need to purchase something online, order it, wait, pay shipping, possibly mix your own nicotine. You don't have the consumer protections in place that you would have were these legal to purchase in Australia. If you have a regulated regime in Australia you know that if something says it has four milligrams of nicotine, it has four milligrams of nicotine. If you purchase something over the internet which is made, for instance, in China, where there have been consumer standard safety issues, you don't know that that's what you're getting; you don't have those checks and balances. You could be buying an electronic vaporiser, atomiser, which might have issues with the battery—which again has significant safety problems. So I think it's a combination of those three reasons. First of all—and probably the biggest one—it's illegal. The fact that it's illegal and we still have over 200,000 Australians doing it should show where we are at in this. So there is the issue of illegality, the issue of inconvenience and the issue of safety.

Mr ZAPPIA: Thank you.

Mr TIM WILSON: As the Australian Taxpayers' Alliance, I presume you're talking from the position that it's lower tax, and from my knowledge of your previous activity you're generally in favour of minimising tax. But I think there has to be some acknowledgement that, by making these products illegal at the moment, there is virtually no tax being collected, beyond perhaps the sale of vaporizers, which we heard from the previous representatives, the retailers, was relatively minimal. Do you have some sort of estimation or idea about the likely tax revenue that could be raised as a consequence of making these products legal? Do you have a preferential tax arrangement? One of the things we've heard from other representatives is that if you had a lower tax environment you would have substitution from tobacco with people moving towards e-cigarettes.

Mr Andrews : At the moment Australia is obviously missing out on GST revenue for these products, because if they're black market products you're missing out on GST. So there will always be a GST. Once these are legalised, the Commonwealth will receive the GST revenue, which will end up with the states—but anyway.

CHAIR: The Commonwealth has to channel the GST revenue—to Western Australia!

Mr Andrews : I was going to make a Western Australia joke! If we want to encourage these products, then there shouldn't be an excise on them, for the reason that's mentioned. If we want people to go from tobacco to vaping, we need to do everything in our power to make it easier for people. One of the easiest ways of doing this is to make it economically viable for them. So we concede the role for the Commonwealth to collect GST revenue, but any further excise on top of that will have a detrimental impact on the public health goals of this.

Mr TIM WILSON: Just to follow up on that, you talked about the challenges of going through a TGA/prescription based model for access to these products. Do you have views on other regulations that operate around tobacco based products which could be moved over to e-cigarettes, particularly some of the things that have been discussed around limitations or restrictions on flavouring because of the potential attractiveness to children—that was how it was represented to us, anyway—or marketing and advertising restrictions, as well as other models of restriction such as point of sale limitations and plain packaging?

Mr Andrews : Certainly. On the issue of flavouring, there was a 2016 survey which showed that 72 per cent of respondents 'credited tasty flavours with helping them to give up tobacco'. Similarly, another study by the Onassis Cardiac Surgery Centre concluded that flavourings in e-cigarettes 'appear to contribute to both perceived pleasure and the effort to reduce cigarette consumption or quit smoking'. Given the fact that studies have shown that these flavours are a contributing factor to helping people quit smoking, it would be incredibly counterproductive for us to then seek to further regulate or ban them and have this 'one size fits all' model where you get your nicotine in a flavourless hit like with a nicotine inhaler, because these don't work.

In terms of other regulations, I am very reticent about anything which puts barriers to people taking these things up. Given the amount of misinformation in the community, anything which helps educate people, promotes the availability and shows the health benefits, whether this be advertising or other forms of regulation, is a positive which should be embraced. People who say we should put all of these restrictions in place are still basing it on the discredited notion that people who are nonsmokers are taking up vaping. As we said before, all the evidence shows they are a fraction of one per cent, which is negligible. We need to provide as much information to smokers as possible as to the benefits for them and why they should quit, and that's why things such as advertising restrictions, hiding them with display bans and all those other things will be very counterproductive, and we would very strongly urge the committee to recommend against such bans.

Mr TIM WILSON: The other thing that we've heard consistently from some people has been the idea that e-cigarettes will essentially become a gateway to people normalising consumption of either e-cigarettes or other tobacco based products because of behavioural change that it might lead to, and particularly that it may lead to consumption of either e-cigarettes or tobacco based products among young people who otherwise might not do so. Do you have any thoughts or reflections on that?

Mr Andrews : Certainly. The fact is that the evidence has shown that not to be the case. There is no better way of saying it. There has been study after study after study which has demonstrated that this isn't the case. There have been studies this year. When you look at the document that I tabled, on the 30 studies from this year, on the issue of gateways there are seven new studies that came out this year which disprove this thesis. Seven studies looked at it, and all seven dispute this thesis. According to some of them, 0.1 per cent of people take up vaping and move on to smoking. These are the numbers we're looking at, and we also note some in our submission. Paragraphs 23, 24 and 25 look at some of these studies as well and summarise them. Once again, I would strongly urge the committee to look into the summary of the seven studies that came out this year alone debunking that myth, and I have printed several copies.

Mr TIM WILSON: Just to go back to that, though—and perhaps I've misunderstood—there are two components of what I was seeking to ask. The first is people using the e-cigarettes and then moving on to tobacco products. There is also the issue of somebody who was highly unlikely ever to consume a tobacco based product or cigarette taking up the use of e-cigarettes.

Mr Andrews : And both of these do not occur.

Mr TIM WILSON: That's your position?

Mr Andrews : That's the position of the scientific consensus on it.

Mr TIM WILSON: The scientific consensus?

Mr Andrews : The academic studies that have come out over the term are fairly unanimously clear, and there have been a number of meta-analyses that have also looked at this overarching level and have shown that that does not occur. If it occurs, it is around the one per cent mark, which is negligible compared to the costs.

One thing I would note, however, is that, in the study that was released on Tuesday that showed up to 6.6 million lives to be saved in the United States, the same study had a number of scenarios. One was the most pessimistic scenario. The pessimistic scenario was more pessimistic than I think anyone would think it would be. The scenario was that it is considerably more dangerous than we thought and that people who took up e-cigarettes would then start smoking. It was a worst-case scenario. It was even worse than many of the assumptions of the opponents of vaping legalisation. That still showed that well over a million lives would be saved in the United States over the 10-year period, which would again translate to well over 100,000 in Australia. So even if you accept the worst-case scenario, where all of the gateway arguments are true—which, once again, I would argue that the scientific studies show isn't the case—the evidence still shows this will have a huge positive public health impact.

Mr TIM WILSON: In speaking to some of the people who presented this morning, there was a discussion about whether introducing e-cigarettes would reduce costs or not in comparison to consumption of tobacco based products. Essentially there was a proposition that it might extend lifespan but the trade-off was that it would increase issues around morbidities and chronic health problems down the track, depending on the dataset and the consequences of extending people's lives. That's generally true of extending people's lives period. But there seemed to be—and I do not want a verbal any of the people who presented—an understanding that that would potentially increase the costs to the health system because you would actually be extending people's lives and potentially needing to support management of people's chronic health conditions. As a taxpayers' body that wants to reduce health costs, do you have a view on that?

Mr Andrews : I think it's a fairly reprehensible argument to say that people living longer is a bad thing because it will create a bigger burden on the tax base. This is an argument that people rightly pilloried tobacco companies for making in the 1970s and 1980s. I think it's not an argument that we should be making. I think it's purely an immoral argument. 'If people live longer we're going to have to pay them a pension for longer and might have to pay for longer treatment in a hospital'—that is not an argument that we are happy to make.

We will also note that there are other cost savings here. The government frequently likes to use the argument about the social cost of smoking in justifying tax increases, as do the AMA and other groups. It equates to over $30 billion a year if you accept the study that is the stated position of the Australian Medical Association, the Cancer Council and so forth. If you accept the social-cost-of-smoking argument, as all these organisations do, weaning people off tobacco may make it viable in the long run.

In addition, there are other costs you need to factor in, such as things like fires. We are looking at about $85 million a year in costs from bushfires and fires in people's homes caused by people smoking. That's $85 million a year—that is the adjusted-for-inflation amount—for things such as fires. These are other costs that will be saved because you don't have lit cigarette butts that you throw out the window or you fall asleep with. So these are other cost savings that will occur. Ultimately the argument would be that we don't need to put a price on people's lives and say we shouldn't do it because there will be implications for government expenditure in the future.

CHAIR: In your presentation you have relied a lot on the view, for which you say there is a scientific consensus, that there is no disagreement that e-cigarettes do less harm than smoking cigarettes. This morning we heard from a range of medical organisations that were not prepared to accept that point of view. They say the evidence simply isn't there. Part of the problem is that you referred to 30 studies. They referred to 30 different studies this morning. That is often the way with these issues. They say the evidence simply isn't there because there are longitudinal studies which, for example, demonstrate the harmful impacts of tobacco and you can't really make a judgement that it is a safe product until you have that 20-year assessment period. Why are they wrong in arguing that?

Mr Andrews : To the best of my knowledge, these organisations—

CHAIR: There is contradictory evidence.

Mr Andrews : These organisations have never stated that smoking is less safe than vaping. Their position is that over 20 years there might possibly be evidence from a longitudinal study that might maybe come up with something that we don't know at the moment, which is the precautionary principle. The simple response to this is: we know for a fact that smoking kills. This is not in dispute. Without the carcinogenic element of burning tobacco it is safer because there isn't the smoke, other particles and tar. Other organisations that have presented against this do not dispute this point, to the best of my understanding.

The argument that you should allow people to keep smoking until we assess the exact nature of just how safe e-cigarettes are I don't think is appropriate for two reasons. First of all, I don't think we can wait that long while people are dying. Secondly, you are setting yourself up for a position where for pretty much anything you need 20 years of studies. This isn't viable. There are things that we know are better for you. You don't need 20 years of studies to show the exact quantum of how they are better for you. This precautionary principle that they are talking about is essentially saying, 'Keep smoking.' How is it precautionary to say that you should continue partaking in a process that is known to kill you?

CHAIR: I'm not quite sure that they'd agree with that summation, but I understand the point you are making. Thank you very much for your evidence today, Mr Andrews. You will be provided with a Hansard transcript of the proceedings. If there are any errors or additions you'd like to make, let the committee secretariat know. Once the committee secretariat staff during their lunch break have looked at the additional material you've provided, we will consider admitting that to the inquiry. Thank you for your time today.

Mr Andrews : Thank you very much.

Pr oceedings suspended from 12:32 to 13:24