Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

The most disadvantaged groups are the ones that will pay most of this tax. I hear the member down there, but we must be honest: this revenue raising measure will hit the least well-off in our community. Figures from New South Wales show that, across the general population, 16 per cent of people smoke—14 per cent of women and 19 per cent of men. For those who are unemployed the smoking rate actually doubles, to 31 per cent. Thirty-five per cent of people with a mental illness smoke. For those who are in jail it is 75 per cent, and for those who are injecting drugs it is close to 95 per cent. Looking at all the evidence, the poorer you are, and the lower your socioeconomic status is, the more likely you are to smoke. This is perhaps something we could use, as tobacco companies portray smoking as something that is a glamorous luxury. In fact, it is the complete opposite.

We can only justify this being a regressive tax if it is going to drive down the smoking rates. We have had some success over past years. In fact, Australia can boast of one of the fastest-declining rates of people smoking. Quite a lot of that success came under the previous Howard government when the current Prime Minister, Tony Abbott, was the minister for health. He was the one who first pushed graphic health warnings on cigarette packets. Under the Howard government the rate of smoking declined by 20 per cent.

Many of my more libertarian friends—whom I mainly agree with and often agree with—argue that some of the things that were done in the past, such as the health warnings on cigarettes, are an extension of the nanny state. I disagree with that. One area where I believe it is legitimate for a government to interfere in the marketplace is the area of misleading and deceptive conduct in trade or commerce. This is where the government comes in and acts on behalf of the consumer where a firm is engaging in misleading or deceptive conduct. Of course, such conduct can be by omission or by silence. I think if you are selling a product that actually kills your customers, it is misleading or deceptive if you do not have some health warnings on the packet. Therefore, I reject the claims of my libertarian friends that health warnings on cigarette packets are nanny state. It is a legitimate step for governments to take to make sure that, at least, the person who is buying the product is not misled or deceived.

While smoking rates in Australia have been coming down, unfortunately we cannot say that for many other countries. While Australia's smoking rate is 18 per cent of the population, a few other countries are not faring so well. In China, 59 per cent of males smoke. In Indonesia it is 66 per cent of the male population over 18. Malaysia is little better, at 54 per cent. In Russia, one of the worst, it is 70 per cent and in Vietnam it is 46 per cent. Our rate of 18 per cent is good by world standards but we must continue to have policies that will drive that rate down lower. In doing so, we must always look for unintended consequences. In fact, for every policy that comes through this place we should think through what is known as Mauldin's law, which states:

For every government law hurriedly passed in response to a current or recent crisis, there will be two or more unintended consequences, which will have equal or greater negative effects then the problem it was designed to fix.

What are the potential unintended negative consequences of this legislation? Firstly, it will increase the risk of the smuggling of illicit tobacco. If there is such an economic advantage, if there is such a big discrepancy between the illegal price and the lawful price, it can only increase the demand for smugglers and for that illicit product. Since the introduction by the previous government of plain packaging we have already seen that borne out. Here are a few figures on the number of cigarettes that Customs agents have intercepted. In 2008-09, 50 million cigarettes were intercepted by our Customs agencies. In 2009-10 it was 82 million. In 2010-11 it had increased to 141 million and in 2012-13—last financial year—our Customs agencies intercepted 200 million cigarettes. It is true that we do not know what is getting through; those numbers are only what has been detected. But a recent study suggested that more than two billion illegal cigarettes are smuggled into this country every year.

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