Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

This legislation—the Excise Tariff Amendment (Tobacco) Bill 2010 and the Customs Tariff Amendment (Tobacco) Bill 2010is proposed as one of the recommendations of the Preventative Health Taskforce, which handed down its findings last September, and also of Australia’s Future Tax System Review. This will see a 25 per cent increase in the cost of cigarettes and tobacco products, aimed at producing the number of people who smoke. This is the first increase above inflation in the taxation on tobacco in over a decade. The expectation of the government is that this measure will increase revenue by $5 billion over four years. According to the World Health Organisation, tobacco is the second-highest cause of death in the world. It is responsible for about one in 10 adult deaths or five million deaths each year.

According to data in 2007 of the Australian Bureau of Statistics, Australia had one of the lowest smoking rates in the OECD with around 17 per cent of people aged 15 years and over smoking every day. However, Indigenous Australians are far more likely to smoke, with those in remote communities even more likely to do so. One in five Indigenous deaths is attributed to smoking—that is, 20 per cent of the Indigenous population. Higher rates of smoking can also be observed within lower socioeconomic communities and in other disadvantaged groups. The Taking preventative action report of the National Preventative Health Taskforce has identified that around 41 per cent of pregnant teenagers, 38 per cent of unemployed people, 34 per cent of people unable to work, 32 per cent of people with a mental illness, 78 per cent of male prisoners and 83 per cent of female prisoners are smokers. These are all groups where price increases for tobacco should have a real impact. As awareness of the negative impacts of smoking tobacco has increased, the proportion of people who smoke has inclined. Yet tobacco contains an addictive stimulant in the form of nicotine, which does mean that quitting smoking can be very difficult.

The decline in smoking rates in Australia, a fall of 40 per cent for men and 44 per cent for women, between 1989 and 2007 was among the biggest in the OECD. But, given that the total cost to Australian society of tobacco is estimated at $31½ billion each year, reducing the number of people who smoke and the quantities people smoke is vital. There has been a lot of discussion about what is the proudest part of Tony Abbott’s very successful record during his time in the health portfolio as part of the Howard government. This must rank as one of the most significant achievements of Tony Abbott as Minister for Health and Ageing. There were many other achievements: the increase from about $19½ billion a year that was spent on health when we came into government in 1996 to about $52 billion a year by 2007 and the record investment in public hospitals. Increasing the private health coverage from the low-30s per cent up to the mid-40s was I think one of Tony Abbott’s most successful achievements as health minister. Immunisation rates increased from 52 per cent up to 90 per cent—an amazing outcome for Tony Abbott as health minister. Tony Abbott increased PBS expenditure over that period and introduced reforms which put the PBS onto a sustainable path into the future, which was incredibly important with an ageing population. They are all significant events that Tony Abbott can be very proud of. People can understand that Tony Abbott, as opposition leader, has a proud track record not just as a health minister but also as a cabinet minister for about eight years in the Howard government. He is a person with experience. The fall in smoking rates over his term as health minister must rank as one of the highest of his achievements in that portfolio.

However, smoking is still the leading preventable cause of disease and premature death in our country, so considerably more work is needed to further reduce the rate of smoking. Australia does have a moderate tobacco price by international standards. Therefore, increases in the cost of cigarettes and tobacco products to bring Australia more in line with international pricing are not unreasonable. That is the reason the coalition first called on the government to increase the tobacco excise rate more than 12 months ago—not in reply to this budget but in reply to the one before that. We saw it as a legitimate means of trying to reduce the rate of smoking. Although it took the government some time to catch up, we have supported the measure proposed in this bill.

Increasing the cost of cigarettes and tobacco has proved to provide financial incentive for people to quit smoking, thereby reducing the long-term strain on the hospital and healthcare system. This coalition, when elected at the next election, will continue that commitment to the Australian people. We are genuine in our resolve to improve services in public hospitals and to improve the coverage of private health insurance beyond even the 10 million people who have private health insurance now in our country, because we want to ease the burden on our public system. We want to make sure that mums and dads who are waiting long periods of time in emergency departments in the early hours have better and faster access to health professionals. We want to make sure that we continue the great work of Tony Abbott when he was health minister so that we can improve health outcomes. We have some amazing statistics in this country when you contrast us to similar countries. We have something to be very proud of. We have a great number of graduating doctors coming through the system at the moment and I know, while some medical students have expressed concern about where they will be trained and where they will be doing their internships, these people have not just popped out at the two-year mark of the Rudd government. These are people who went to university because of new places created by Tony Abbott when he was health minister. So we want to make sure that, when the coalition is elected at the next election, we fix some of the mistakes that Labor has made in health.

There has been a waste of money in some areas in health. Putting GP superclinics alongside existing practices has caused great distress among doctors and practice nurses operating in those existing practices. What sense does it make to put millions of dollars of taxpayers’ money into a GP superclinic which sits alongside an existing practice, a practice that might be trying to help young people give up the habit of smoking or addressing the chronic disease that they might present with? Why would we put those surgeries under pressure and potentially have them close if a flood of those doctors go into the new GP superclinic when already there exists a viable practice?

There is a lot to be rectified. A lot of damage has been done not just to the health system but to the Australian economy in a very short period of time. This government has thrust our country into enormous debt. We started with $20 billion in the bank. This is a government that, instead of spending some of that money on health and instead of spending some of the stimulus package on health, decided to waste that money. That will make it more difficult for the coalition and indeed the next government to make the decisions about health that we want to, because we will have billions of dollars in interest each year to pay off Labor’s debt.

This is always the legacy of a Labor government. It always makes it hard to invest in health and the sorts of programs that we want to when we succeed a Labor government, because always Labor thrusts this country into debt. That is the Achilles heel that Labor brings to government. It is a burden that has now been thrust upon generations to come. It will take generations to pay Labor’s debt back, but the coalition is committed to doing it. We want to invest further in health at the same time as we manage the Australian economy responsibly. We support the bills. There is a lot more work that needs to be done in health. There needs to be a redirection of the investment in health. The coalition is the only party at this election that stands to serve the Australian people in getting better health outcomes for all Australians.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Excise Tariff Amendment (Tobacco) Bill 2010 and the related bill, which increase the rate of excise on cigarettes and tobacco by 25 per cent. Just before I get on to my remarks, I want to respond to some of the comments made by the member for Dickson just a moment ago. I begin by saying that he may well wish that he could rewrite history in respect of the track record of the Leader of the Opposition when he was the Minister for Health and Ageing. But the cold, hard reality is that he cannot. The opposition leader, during his time as minister for health, slashed a billion dollars from the health budget of this nation. People well remember that it was during his time that hospital waiting lists increased and there was a shortage of doctors and nurses. The health system was in absolute crisis—so much so that I can recall that in the lead-up to the 2007 election his own Prime Minister, in a mercy dash to Tasmania, said that they would take over the Mersey hospital as part of their attempt to restore their credibility on the management of the health system of Australia. For all their protestations and all the attempts by the member for Dickson to try and change that record, the fact of the matter is that the Australian people well recall what it was like trying to get a doctor and trying to get into hospitals during the term of the last government.

Getting back to the essence of these bills, in money terms the raising of the excise on tobacco cigarettes by 25 per cent means that on each cigarette there will be a price rise from 26.22c to 32.775c. For a kilogram of tobacco, the price will increase from $327.77 to $409.71. The measures raise the percentage of tax in the retail price of a packet of 25 cigarettes from around 62 per cent to around 67 per cent, which is still considerably lower than in France, where the tax percentage on a packet of cigarettes is around 80 per cent, and in the UK, where the percentage is around 77 per cent.

As the minister has made clear, all the additional revenue raised will be invested in the National Health and Hospitals Network fund. This is the fund that the Prime Minister and the health minister have announced and which has been agreed to by seven states and territories. It is intended to reform Australia’s health and hospital system. It is a reform that is absolutely necessary following the administration of hospitals and the health system in this country by the previous government. This reform will ensure that the federal government will take responsibility for 60 per cent of the funding of all public hospitals.

The Commonwealth government will also take full responsibility for GP and related services provided outside hospitals. It will replace separate health systems with a National Health and Hospitals Network. It will dedicate one-third of GST revenue to health and hospitals and will put local hospital networks in charge of hospitals. Furthermore, local hospital networks will be funded for each service that they deliver. Importantly, national health standards will be set, cost shifting will be avoided and funding will be better targeted. The reforms start from 1 July 2010. We will then begin to deliver 1,300 new hospital beds, more than 6,000 new doctors and an additional 2,500 age care beds through the Commonwealth takeover of primary and age care.

In addition to that, in the recent budget it was announced that a further $2.2 billion will be committed to building a modern health system for all Australians. That $2.2 billion will be used to provide an additional 23 GP superclinics around the country at a cost of $355 million, $417 million to enhance after-hours services, $523 million to train more nurses and $467 million for individual electronic health records.

I want to spend a moment on that further $2.2 billion of expenditure, because most of it will be cut by the opposition if they win government. We heard a moment ago the member for Dickson criticising the government’s investment in GP superclinics around the country. There is a GP superclinic already under construction in my electorate of Makin, and I welcome that investment. It was a total investment of $25 million, jointly funded by the federal government and the state Labor government. It is an investment that will see a GP superclinic provided, with all the ancillary services that go with it. I know that will ensure that better health services are provided to the people I represent. Yet I see the opposition saying that they would cut that funding and that they would not proceed with the GP superclinics that this government has committed to.

In one of the other cuts they have mentioned, they would not proceed with the individual electronic health records commitment of $467 million. I have spoken in this place on another occasion in support of an electronic health system for this country and the importance of it. The ability of doctors in hospitals to have at their fingertips accurate information about the patients they are treating will undoubtedly ensure that we have a much more efficient health system and a much more accurate health system, which can only be good for those people who are being treated. I know that is a policy supported by the medical fraternity generally. I am surprised to see that the opposition is now suggesting that they would cut it, given that when they were in government they had said they would support an electronic health system for Australia. They have clearly now done a backflip, again highlighting that in reality they are not committed to a better health system for Australia and that if elected they will go back to their old stance of making cuts to the health system, as they did when the current Leader of the Opposition was the health minister.

It is expected that this measure will result in a reduction of tobacco consumption of about six per cent and a reduction of two to three per cent in the number of daily smokers in Australia—around 87,000 Australians will probably give up the habit of smoking. In introducing these measures the minister for health outlined the serious health effects and costs to the Australian community of tobacco related illness, and I want to reiterate some of the facts. Each year around 15,000 Australians die of tobacco related illness and 750,000 hospital bed days are taken up by patients with tobacco related illness. The total financial costs to Australia associated with tobacco use are in the order of $31.5 billion each year. Through a range of strategies—including health warnings, tax rises, banning smoking in workplaces and other venues, advertising bans and other measures—smoking rates in Australia over the last two decades have been almost halved, from 30.5 per cent in 1988 to 16.6 per cent in 2007.

Across the world, around 5.4 million people die each year from smoking related illness. More concerning to smokers should be the fact that tobacco kills up to half of all users. That is quite a frightening statistic: tobacco kills almost half of all users. Yesterday was World Tobacco Day. Mr Deputy Speaker Georganas, I note that you—as a former smoker who, I understand, gave up some years ago—made a speech in respect of World Tobacco Day, in support of the campaign to reduce the number of people who smoke throughout the world. It is a day which focuses attention on the global disastrous effects of tobacco consumption, and it is one of the international strategies aimed at curbing cigarette smoking. Mr Deputy Speaker, I hope other people follow your lead.

Not surprisingly, the increase of the excise on cigarettes has not been received well by smokers. In my own electorate I have been contacted by several of them. Some might say that if smokers do not want to pay the tax they can simply give up or cut back on smoking. For someone who is addicted to smoking, it is simply not that easy. I am sure that most smokers would want to give up if they could. I note that a high proportion of smokers are in the lower socioeconomic status categories of society. In fact, those who can least afford the cigarettes are spending the most on them, and they will therefore contribute most to the increased revenue raised. People who are poorly educated, unemployed, unable to work or on low incomes and Indigenous Australians are more than twice as likely to smoke as other Australians, with smoking rates amongst the unemployed and Indigenous Australians at more than one in three. For example, smoking levels amongst the unemployed are at about 38 per cent, whilst for the most advantaged sector of society smoking rates in Australia are around 14 per cent.

What I would like to see and what I urge the minister to consider is the provision of increased support to smokers for the purchase of nicotine patches or similar aids to help them quit smoking. Increasing the range of items which attract a PBS rebate when prescribed by a GP should be considered, as I know some of the products available can be costly. Of course the costs of tobacco smoking are not borne only by the smokers. The effects of passive smoking on children, other family members, work mates and people in social venues is well documented. It is estimated that around one in 10 tobacco related deaths is due to second-hand smoking. I repeat: one in 10 tobacco related deaths is attributed to second-hand smoking—in other words, people who do not smoke but are in the company of others who do. Over the years we have seen action taken by all three levels of government in Australia to curb the effects of passive smoking on others in the community—for example, bans on smoking in workplaces, in public venues and in vehicles which children are in are now commonplace.

One cost to the community which is difficult to quantify but which is undoubtedly significant is the cost to communities and the environment through damage caused by discarded cigarette butts. Each year about 24 billion cigarettes are sold in Australia. It is estimated that around seven billion of these end up as litter in our streets and waterways. In fact, I have seen a figure that suggests it is higher than 24 billion cigarettes—perhaps up to 32 billion cigarettes. Whichever it is, it is a huge amount of cigarettes that are sold. If a third of those butts end up in our streets and our waterways, they not only create a litter problem but also create additional environmental and health problems. Given that cigarettes contain about 4,000 chemicals, one can only guess the damage they cause to the environment, particularly waterways, once they are discarded. Cigarette butts can take up to 12 months to break down in freshwater and up to five years to break down in seawater.

There is also the cost and risk of fires caused by carelessly discarded cigarette butts. Many house fires and large bushland fires have been attributed to cigarette smoking. Again, the actual costs are impossible to measure—and, of course, you cannot put a price on human life. As recently as six weeks ago a wheelchair-bound resident in my electorate died as a result of a fire which authorities believe was caused by a cigarette.

I said earlier that there has been significant progress over the last two decades in reducing the number of smokers in Australia. Clearly, a sustained campaign of education, advertising restrictions and increasing public places where smoking is prohibited are measures that are working. I therefore welcome the announcement by the government that, as from 1 July 2012, all cigarettes will be sold in plain packaging. In view of the initial reaction to this measure by the tobacco companies, I expect it will be another positive step in reducing the number of smokers in Australia. I wait with interest to see what level of resistance tobacco companies put up to the plain-packaging proposal.

This measure, in conjunction with legislation restricting internet advertising of tobacco products, updating and expanding the graphic health warnings on packets and increasing anti-smoking advertising revenue by $27.8 million over four years to take it to more than $85 million over that period, should make a difference in reducing the level of tobacco use throughout the country.

I welcome the announcement by Minister Snowdon—the Minister for Indigenous Health, Rural and Regional Health and Regional Services Delivery—made yesterday as part of World Tobacco Day, that a new workforce to tackle Indigenous smoking rates and promote healthy lifestyles would be established in 20 regions across Australia. He said that 82 positions, to start in July, would be created. Almost half of Indigenous Australians smoke, and one in five deaths amongst Indigenous Australians is caused by smoking. Through the employment of regional tobacco coordinators, tobacco action workers and healthy lifestyle workers, and the Quit Smoking and Healthy Lifestyle programs they will be responsible for, it is hoped that smoking rates amongst Indigenous Australians will be reduced. It is only through these kinds of targeted programs that I believe we can make some real inroads in reducing tobacco consumption amongst Indigenous people.

I heard the shadow minister for health speaking on this legislation a few moments ago and I understand the opposition will be supporting these measures. I certainly welcome their support. Unlike what the Leader of the Opposition had proposed, however, the money raised from these measures will go into our health and hospital system. He proposed earlier that it would go into clamping down on people who are welfare recipients.

I believe these measures go a long way towards not only improving the health of our nation but assisting people, through the accompanying health reforms, to quit the smoking habit. While I accept the legislation is not welcome right throughout the community—certainly three million smokers throughout the nation would not be pleased about it—it nevertheless has the support of the medical community, the Cancer Council of Australia and other authorities who have studied the effects of smoking on health across our nation. I commend the bills to the House.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

This legislation, the Excise Tariff Amendment (Tobacco) Bill 2010, has good purpose and the coalition obviously supports it. Let me say, nevertheless, that I am not exactly sure what this had to do with excise on tobacco products but I did hear the member for Makin make some reference to the government’s GP superclinics. My recollection was that there was an ironclad guarantee made at the last election that the government would deliver 36 of these clinics around Australia. Some of us thought they might even turn up where there is a shortage of doctors. The member for Makin tells me he has got one. He must be one of the three members who has. So the government has again failed to keep its promise. We are lectured daily by the Minister for Health and Ageing about how much money she is spending or how much of Australian taxpayers’ money is being given to the states. I refer to that as measuring excellence by expenditure. We also have excellence by promises that are not kept. Furthermore, the coalition has identified this scheme for what it is: (a) it has not happened; and (b) it simply replaces the services that were given by independent members of the medical profession, by general practitioners. It is another attempt to socialise the services of medicine by putting—as they typically do—these facilities in where there are plenty of doctors anyway.

As with the argument that has prevailed in this place when it comes to how you might fund the difficulties that people experience in getting dental services, the idea that you just send away the money and, hey presto, a lot of disadvantaged people get services, ignores completely the availability of dentists who will go and work for wages in the public sector when, as we well know if we are in the habit of visiting a dentist, they can make about 50 times as much in the private sector. There is no purpose. You create GPs superclinics—a fancy name—and put a lot of services under one roof, if you have got a roof. I think we have only got three roofs. And one might even ask why it is necessary to build before you get the people. You can rent premises. If you go into a Bunnings warehouse you will not find too many that are owned by Bunnings. They know that the economic benefit is in renting the premises and conducting their business therein. But this government has to build the structure—no doubt at similar cost to what we are seeing in the Building the Education Revolution—before it provides the service. But, again, if the service is not placed in areas of significant need through the absence of other medical practitioners, then it serves no beneficial purpose.

Another issue that arises out of all of this that I have experienced in my electorate, and more particularly in some of the nicer places to live, is of medical practitioners, maybe with family obligations, who are only working two or three days a week, yet when another practitioner tries to bring in a couple of full-time practitioners from South Africa, the UK or some of the more desirable spots they are told by the socialised Medicare system, ‘You have got enough provider numbers and you do not need any more practitioners.’ But the practitioners are not available. I just thought I would make those points, considering the remarks of the member for Makin.

What we are talking about is something that governments of all political persuasions choose to do—to tax us to save us from ourselves. I am not objecting to that and I note the second reading speech of the Minister for Health and Ageing in which she talked about increasing the charge per stick—in other words, per individual cigarette. That initiative came out of the GST tax reform. It was the Howard government that introduced it because previously the excise related to packets. It was being manipulated by people with larger packets of 30 cigarettes instead of 20. There were all sorts of practices going that the stick proposition, which is accepted by this government at this stage, overcame. It was a good measure. However, notwithstanding all the arguments relevant to the consumption of alcohol, it will not bite the bullet on volumetric taxes for alcohol. There was the farce that was the alcopops issue. Even the revenue that the government predicted from alcopops is now starting to decline. What did it do? It taught kids to buy full bottles of spirits at 40 per cent alcohol instead of the five per cent mixers that looked like a good profit for the government. We will tax you to save you. The kids are not that silly.

I am anxious that the increase in the cost of cigarettes will have the desired reduction which the minister refers to. I think it is something like three per cent or thereabouts. It has already been reported that some people have reduced their discretionary expenditure in other areas. They are addicted. They are buying cigarettes and paying the tax. The media producers will be interested to know that one of the losers has been magazines. That might balance out over a while, but for all the claims, which can only be applauded, the second reading speech tells us:

This action has had a dramatic effect.

That is the various warning labels and things of that nature. It continues:

The number of daily smokers aged 14 and over in Australia has been reduced from approximately 30.5 per cent of Australians in 1988 to 16.6 per cent in 2007.

That is good news. But in that period we are told that there has not been any adjustment in the excise other than by way of the CPI automatic adjustment. What caused that reduction? It was all the things that have been mentioned. It was an extensive advertising campaign—at times almost offensive but I will not complain about it. The second reading speech says:

That is why successive Commonwealth and state governments have taken action to reduce Australia’s smoking rates. This has included action at the Commonwealth level by increasing taxation—

no they did not; the increase has been very modest in that period—

conducting hard-hitting social marketing campaigns—

hooray for that—

banning tobacco advertising and introducing graphic warning labels.

But in my view the most successful initiative is:

States and territories have also acted by banning smoking inside licensed venues, running Quitline services and hiding cigarettes from view at point of sale.

I think that major cutback has resulted primarily from making the practice of smoking extremely inconvenient. There are so few places you can have a smoke. I am fortunate that I never bothered to take up the habit. My mother smoked from aged 13 to 73. She died at 83 and it was not from smoking. I do not promote that to encourage people to smoke. But there seems to be a lot of reasons to quit. A lot is said about passive smoking. I operated in the hotel industry for nearly 30 years and can well remember walking into some of the venues in my hotel and virtually could not see across the width of the room. I would have to replace the carpet very regularly for all the cigarette burns on it. I did not need anybody else’s help; I was just taking the smoke in and, to date, it has done me no harm. I am not saying that as an excuse. I am just pointing out the vagaries in all these situations. I think that this is a tax grab. It might work, but I do not think it is going to work as well as past campaigns that tried to convince people that it is not smart to smoke.

When we start a campaign on so-called recreational drugs, we will see a decline in the level of violence in entertainment areas and drinking places these days which the police forces in most states, certainly in Western Australia, still want to blame on alcohol. Alcohol should be taken in moderation, and the fact is that it is not when people are drunk that there are those scenes of violence that we are seeing so regularly. In fact, they find some difficulty in fighting at all. There is a period of time after which their belief in their own ability no longer meets that ability. Alcohol tends to generate a bit of courage for a certain amount of time, but of course it is not much good for your reflexes. But it is different with people who take these so-called recreational drugs.

We had a case in Perth the other day where an elite footballer got caught down an alley sniffing cocaine. The standing joke throughout Western Australia was that this bloke was a bit unlucky that the police caught him; if he had been caught by an AFL inspector, nobody would know about it. And, if he had been 17 years old or thereabouts, a recently drafted rookie, and he had a positive test under the AFL regime, not even his parents would be told about it. I said on radio while that was getting publicity—and I will repeat it in this place—that it almost warrants a law being passed in this House that prevents TV and other media broadcasts of elite sports that do not have a zero tolerance and an open and transparent drug policy. The AFL policy is driven by the industrial relations associated with the players association. It is a blight on our TV companies that they have not done something about it. There would be no elite football and there would be no footballers buying Ferraris and Lamborghinis, as some do, if in fact the TV stations did not pay the AFL very substantial amounts of money. I think the last contract was $700 million for about three years. It is up to the TV managers and owners to insist. I think Rugby League has a much more aggressive policy. I cannot comment on union, but they probably have as well.

But the AFL stands out as an elite sporting operation that believes that their players can go to various venues and be seen taking drugs—and it is those drugs that start the fights, I can tell you. I have seen too much of it. In particular, it is those drugs that make a person believe that kicking a man who is on the ground in the head is okay. If that had occurred in any of the establishments I had, the person who did that would have been lucky to get out of the bar alive, because everybody else in the bar would take to them. It is just unacceptable. It is now considered par for the course. Of course, if you have got a flick-knife in your back pocket, you might stick it in someone. Who would have done that in years gone by?

So we have got a problem. We have a government that has a simple solution to any perceived problem: put the taxes up. As the member for Makin mentioned, that might cause considerable hardship to some people. All of these tax increases on alcohol or cigarettes make recreational drugs a cheaper option, and that in itself, I think, is a problem. There is no taxable solution to these drugs, and it is the responsibility of the parliament to do more about it. I was encouraged to read in recent days about some so-called big drug busts.

Let me come back to that footballer. Nobody has asked him where he got the drugs. These people are charged and there is no legal requirement for them to say where they got them from. Okay, it might be from some shifty character down that alley, but in many cases they are going regularly to the same place. As one politician in Western Australia said—I wish I had thought of it myself—on one occasion: if a 14-year-old kid knows where to get drugs, how come the police forces of Australia don’t? Is it a fact that if you are a small dealer it does not matter? To the credit of the Western Australian state government, they have now brought in legislation—and some people very much object to it—that says they can search you on demand, with no reason given. They will mostly do that in entertainment venues. My view is that, if you have got some amphetamine or some ice in your pocket, in the first instance, hopefully, the police will put you in a paddy wagon, take you in, lock you up and call your parents to say, ‘You had better come and get them.’ The reality is that possession is not always for the purpose of sale, but it is illegal.

We do not make cigarettes illegal, and some people say that might be the right thing to do. But there is that tobacco you can buy under the counter. I have forgotten what it is called but it has a name. It is smuggled into the country in large quantities, and apparently a lot of people know where to get that sort of tobacco, which of course does not carry any excise charge whatsoever. But again, obviously, governments usually get a lot more upset about people that smuggle goods that contribute to government revenue. I do not know why, when they should just be concerned with their detrimental effects on people’s health and more particularly, in this day and age, young people’s health.

So the government have put up the price. They say they are going to spend the money on campaigns. I might add, and it is worthy of some note, that I am just not sure how this plain packaging will work or how it will comply with consumer law. Consumer law today just about covers a tin of baked beans with information—in the first instance, information that this is bad for you, in the case of cigarettes. But are people going to know other aspects of it? Are they going to be told all the things that are listed here that could be in the cigarettes, and are they entitled to know whether some brands are safer than others, if they can be? I think there are a few consumer law issues that one might want to address in that part of the legislation.

Anyway, it is typical of this government: if you can tax it you should, and don’t worry where the money goes thereafter. Of course, in this case, as with alcopops, they tell us they are doing it purely to save us from ourselves. I think the evidence is that in a period of reasonably low increases in taxation there was the dramatic reduction of smoking mentioned and that the campaigns are of more value than the tax is a burden. (Time expired)

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Excise Tariff Amendment (Tobacco) Bill 2010 and Customs Tariff Amendment (Tobacco) Bill 2010. These bills seek to increase the excise and excise equivalent customs duty rates for tobacco by 25 per cent. The Customs Tariff Amendment (Tobacco) Bill 2010 contains amendments to the Customs Tariff Act 1995 in respect of imported tobacco products that are complementary to the amendments to the Excise Tariff Act 1921. These amendments increase the rates of customs duty for tobacco products by 25 per cent, which is the same as the increase in rates of excise duty. The increased rates of customs duty will apply to tobacco products imported from all countries, including those goods imported under any of Australia’s free trade agreements.

These amendments will ensure that the rates for customs duty on imported tobacco products are the same as the rates of excise duty on those goods when produced in Australia under the Excise Tariff Amendment (Tobacco) Bill 2010 and the Excise Tariff Proposal (No. 1) 2010. As with the amendments to the excise applying to tobacco products, the amendments to the customs tariff will also take effect from 30 April 2010.

I understand this increase is not welcomed by the tobacco industry, nor is it welcomed by the many people who smoke. The government, however, does have a responsibility to do what it can to reduce Australia’s smoking rates. I know that there will be those who argue that this measure will not reduce the rates of smoking, and it appears that the member for O’Connor may be one of those people, referring to this as simply a tax grab. However, to make this statement is to do so in ignorance of the many calls from various reports and inquiries to increase the cost of tobacco as a measure to tackle the terrible consequences of this choice of lifestyle and also to ignore the evidence of the results of such price increases around the world. In supporting these bills, I do not argue, nor does the federal government, that increasing the cost of tobacco on its own will address all of the health problems associated with smoking. Those calling for action on tobacco certainly argue for a range of measures to be taken.

The member for Makin has talked about the risk of smoking and second-hand smoking. These risks should not be underestimated. The worst examples I have seen in relation to smoking are pregnant women and new mothers. I was amazed when I saw pregnant women with their hospital bands on standing outside maternity hospitals on the footpath smoking. I have seen a mother with a newborn baby in a carry-pouch, with the baby facing her as she smoked and blew smoke into the baby’s face. Clearly we have a long way to go in educating about the harm of cigarette smoking for unborn babies and second-hand smoke around children.

One of the recent comprehensive assessments of tobacco and its effects is the national Preventative Health Taskforce report released on 30 June 2009, entitled National preventative health strategy: the roadmap for action. Chapter 3 of the report, entitled ‘Tobacco: towards world’s best practice in tobacco control’, outlines 11 key action areas. The report outlines the case for prevention. In support of these bills, I will read from the report. The report at page 170 states:

The case for action on tobacco is clear. Since 1950, when the dangers of smoking were recognised, almost one million Australians have died because they smoked.

Trends in recent years have been encouraging, but there is no room for complacency while the death toll from tobacco continues, thousands of young people each year start smoking, nonsmokers are exposed to second-hand smoke, disadvantaged groups are disproportionately affected, the overall cost of smoking to the economy is more than $30 billion each year, and tobacco companies maintain efforts to promote sales of their lethal product.

Australia has been among the global leaders in tobacco control … we have the opportunity to show the way to the rest of the world in terms of what can be achieved through a comprehensive, coordinated, evidence-based, long-term strategy that is conscious of the needs of the entire community.

We know what needs to be done. The strategies set out in this report are based on the best international evidence and research, together with advice from some of the world’s leading experts in tobacco control.

The task force in their report made reference to the international Framework Convention on Tobacco Control, which was the first treaty negotiated under the auspices of the World Health Organisation. It was adopted by the World Health Assembly on 21 May 2003 and entered into force on 27 February 2005. The task force report notes that, if the comprehensive approach outlined in the strategy outlined in the report is implemented, modelling suggests that we can achieve a reduction in the prevalence of daily smoking among adult Australians aged 18 plus from 17.4 per cent in 2007 to 10 per cent or lower by 2020.

I am sure that all of us in this parliament would agree that this is a target that we should all do what we can to achieve. The report, in addressing the key action areas, stated:

… to accelerate declines in smoking in Australia it is essential that we step up efforts in:

• Taxation policy
• Public education
• Legislation
• Health system interventions, particularly those aimed at high-need and
• High-risk groups.

The report notes that increasing prices is one of the most effective measures that government can take to reduce tobacco consumption and prevalence. Analysis of changes in smoking prevalence in the largest Australian states in response to changes in various interventions found that the costliness of cigarettes has the most powerful impact of all the policies studied and that the effect of price was greatest among those on lowest incomes.

In Australia taxes presently comprise 68 per cent of the total cost of cigarettes. This percentage is considerably higher in other Organisation for Economic Cooperation and Development, OECD, countries, for example, 80 per cent in France, 78 per cent in the United Kingdom, and 76 per cent in Canada. Of 19 OECD countries listed in the report for 2003, Australia has the third-lowest taxes on cigarettes. The taskforce report recommendation action 1.1 is to:

Ensure that the average price of a packet of 30 cigarettes is at least $20 (in 2008 $ terms) within three years, with equivalent increases in the price of roll-your-own and other tobacco products.

Of course, the Preventative Health Taskforce report is not the only recent inquiry into the consequences of smoking and the detrimental consequences to people’s health and the increasing costs to the health system of our country. The Australian government’s most comprehensive review of the health system in Australia undertaken by the National Health and Hospitals Reform Commission during 2008 and 2009 also looked at the cost of chronic illness in Australia and the causes of such illnesses. The Health and Hospitals Reform Commission reported in its A healthier future for all Australians final report in June 2009 that chronic conditions affecting our health are more prevalent than ever before. Over the last century the report states that chronic disease has become more prominent than infectious disease as a cause of death, and this trend is likely to continue. Already, more than 50 per cent of GP consultations are for people with a chronic condition such as heart disease, cancer, neurological illness, mental disorders and diabetes. Expenditure on chronic disease in Australia accounts for nearly 70 per cent of total health expenditure on disease.

We know that many chronic diseases are preventable. Smoking, excessive alcohol, lack of physical activity and low fruit and vegetable consumption are all risk factors which contribute to the burden of chronic disease. The report goes on to state that good health is therefore about more than health care. Governments must take action to nudge people towards health-promoting behaviour.

In addition to the Preventative Health Taskforce report and the Health and Hospitals Reform Commission report, the Australian Future Tax System review also looked at the issue of tobacco taxation and concluded:

There is a strong case for a substantial one-off increase in tobacco excise. Australian retail prices for cigarettes are moderate by international standards and taxes constitute a relatively small share of the retail price.

It recommended a substantial increase in taxation depending upon evidence on the costs of harm from tobacco smoking, the indexing of tobacco excise to wages rather than CPI, and the removal of the duty free allowance for tobacco. The increase as a result of these bills is expected to reduce the number of smokers in Australia by two to three per cent, or by approximately 87,000 people. It is also expected to reduce the total consumption of tobacco by around six per cent.

This move has been endorsed by the Australian Medical Association, the National Heart Foundation, the Cancer Council of Australia, the Australian Nursing Federation, the Public Health Association of Australia and Action on Smoking and Health among other public health groups. Tobacco related diseases are responsible for approximately 750,000 bed days in hospitals every year. Cigarettes are toxic and poisonous, containing 4,000 chemicals. Cigarettes are estimated to cause one in five of all cancer deaths.

We also know that cigarettes cause heart disease and strokes, among many other chronic diseases. I was pleased to attend this year’s launch by the Heart Foundation of the Go Red for Women Day at Parliament House today. This campaign is about lifting the awareness that four times more women die of heart disease each year compared to breast cancer. Smoking is one of the factors causing heart disease in women. I hope to lift awareness of this risk in heart disease when I hold my own Go Red for Women day on Friday, 11 June, at a breakfast function in my electorate of Petrie. Many local women will be attending and receiving important information about preventative measures they can take to avoid heart disease.

Many organisations are working hard to lift awareness about the risk of smoking. The Rudd government is ensuring that it is playing its part to address preventative chronic diseases in Australia. I am proud to be part of a government that is tackling this important issue and introducing measures that form part of a comprehensive package against smoking, including a world first—the government will introduce legislation to ensure that cigarettes in Australia are sold in plain packaging by 1 July 2012. I support the move to plain packaging as part of the initiatives to reduce the numbers of people taking up smoking. This was also a recommendation from the Preventative Health Taskforce. Research has shown that industry branding and packaging design reduce the effectiveness of graphic health warnings on tobacco products.

There are those who may seek to argue that increasing the cost of cigarettes will not reduce the number of cigarettes being smoked. The same argument was of course put up when the government sought to increase the excise on alcopops. One year ago the opposition and the distillery industry argued that an increase in the cost of alcopops would not see a reduction in the consumption of such drinks, and of course we have heard the same comments from the member for O’Connor today. Well, one year on the Bureau of Statistics figures show that Australians drank 19 million fewer standard drinks in the 2008-09 financial year compared with the previous year. This is drinks overall—not just a reduction in alcopops, as the member for O’Connor claims, but overall alcohol consumption. In relation to premixed drinks, a 30 per cent drop in consumption, equal to 440 million fewer standard drinks was recorded. This shows that the tax rise was effective in cutting binge drinking. Peter Miller a senior research fellow at Deakin University said:

… for the first time in about five years we have seen a real decrease in alcohol sales across the board. This is incredibly good news for the federal government’s alcopops tax.

What this evidence shows, and what the evidence from the Preventative Health Taskforce report and the Health and Hospitals Reform Commission report shows, is that by increasing the cost of products such as alcohol and tobacco in a targeted way, and as part of a broader preventative health strategy, positive results can be achieved.

Yesterday, nations across the world embraced World No Tobacco Day. The Rudd government embraced this day, with the Minister for Health and Ageing, Nicola Roxon, announcing that the government will provide $5 million to help support anti-smoking services around Australia. The $5 million for Quitline will help support the increased demand for services. Increased support for Quitline was a recommendation of the National Preventative Health Taskforce. The $5 million in one-off funding will be made available to: address one-off costs from this period of high demand for their services, including increased hours of access where appropriate; develop and deliver counsellor training, including specific training to help high-risk and highly disadvantaged groups quit; develop new and online quit support resources; and improve quality and national consistency across Quitline services.

This funding is in addition to the Rudd government’s comprehensive anti-smoking package, following the landmark COAG agreement that delivered fundamental reform to Australia’s health and hospitals system. Importantly, revenues raised from this measure, and other existing revenues from tobacco, will be directly invested in better health and hospitals through the National Health and Hospitals Network. This government is committed to health and hospitals reform across the country and a key element of that reform is a focus on preventative health. This is an area that in the past has had little recognition or investment.

The Rudd government are taking action to improve preventative health through: a record $872 million investment in preventative health, including programs in schools, workplaces and community settings; $103.5 million under the National Binge Drinking Strategy; the decision to establish the Australian National Preventative Health Agency; and $449 million to improve the quality of care for Australians living with diabetes.

I have mentioned the Australian National Preventative Health Agency. The bill establishing that agency was introduced in the House on 10 September 2009. I was proud to speak in support of that bill at that time and continue to support the establishment of the National Preventative Health Agency. The establishment of the ANPHA has been recommended by both the Health and Hospitals Reform Commission and the National Preventative Health Taskforce. In fact, the creation of the National Preventative Health Agency was proposed at the 2020 Summit. Unfortunately, that bill has been delayed by the opposition in the Senate since October last year, with no indication that the opposition will be changing its position any time soon.

The member for Dickson, in speaking on the bills now before the House, talked about the opposition’s proud history in health and, more particularly, the Leader of the Opposition’s record as Minister for Health and Ageing in the Howard government. The current shadow health minister may look back at the Leader of the Opposition’s record as health minister with pride, but that is not the reality. The reality is that the Leader of the Opposition ripped $1 billion out of the health system when he was health minister. Now, as Leader of the Opposition, he stands in the way of preventative health in opposing the Australian National Preventative Health Agency Bill. He has, in the past, opposed the increase in the excise on alcopops, and the government has had no indication that he will support the broader health and hospitals reform agenda that the Rudd government is putting forward.

The opposition have already indicated that they support an increase in the excise of tobacco. In fact, the opposition leader referred to his support for an increase in his budget reply speech. I would like to think that their support on this bill is a positive step forward for the opposition and that they will stop opposing for the sake of opposing and get behind the government’s health reform agenda, but I suspect that that is not going to be the case.

I support these bills. I believe they are a positive step forward in trying to tackle the costs and the health implications of smoking in this country. I commend the bills to the House.

Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

I rise to speak on the Excise Tariff Amendment (Tobacco) Bill 2010 and related bill and to join in the broader debate about harm minimisation and prevention measures to reduce the devastating impacts that cigarettes and other tobacco products have on our community. This is significant legislation because of its social and economic impacts for the broader community. The previous speaker—before she got carried away with all the rhetoric about how life was created around about the time that Kevin Rudd came onto the planet—referred quite seriously to the fact that a million lives have been lost since the 1950s. As someone who has lost a close family member—my father passed away almost three years ago from lung cancer—this is a matter of personal significance to me. I think everyone in this place has lost a loved one to preventable diseases associated with tobacco use.

Smoking is an insidious habit with a deadly outcome. Having said that, tobacco remains a legal product in Australia. Balancing that fact with the fact that people may choose to undertake activities which we know are bad for them is an issue that I think deserves further exploration and consideration in a broader national debate. In her second reading speech, the minister reflected upon the impact of tobacco on our community. The statistics are quite damning. She argued:

Tobacco is perhaps the most deadly legal product available in Australia. It is the leading preventable cause of disease and premature death in Australia.

In 2003 it was estimated that smoking results in approximately 15,000 Australian deaths a year. This is more deaths than murder, illegal drugs, motor vehicle accidents and alcohol combined.

Tobacco related diseases are also responsible for approximately 750,000 bed days in hospitals every year.

The total cost to Australian society to tobacco is estimated at $31.5 billion each year.

The impact on the health sector, because of chronic disease presentation in all forms, is a major issue for our government and our community.

Given the enormous cost of tobacco products to the community, it does make sense for governments at all levels to take steps to reduce the incidence of smoking. There has been some success in that regard over many, many years. Back in 1945, from the figures that I have been able to research, the male smoking rate was 72 per cent. Just think about that: almost three out of four men smoked. It was an accepted practice. It was common. It was just a normal part of growing up, to a large extent. My father was one of those who, as a young 14-year-old fellow, took up smoking. He and his brothers—of which there were many—all took up smoking in their early teens.

By 2007 that figure had fallen to 21 per cent, but most of the big gains, the more dramatic drops, were made prior to the 1990s. Figures have not reduced naturally at the same rate since that time. There have been drops of about four per cent in each of the past two decades. People, I think, are resistant to change in this regard. Some people are resistant to all the messages that have been put forward in various public health campaigns and they are also, I believe, resistant to the fact that the product price has been increasing. I will touch on that a little bit later on. We may get to the stage where, no matter how much we are charging for this product, people will find a way to get their tobacco product in one form or another.

Public campaigns to reduce the incidence of smoking have largely enjoyed a bipartisan approach at state and federal level over many years. I think the previous speaker referred to the fact that Australia has led the world in reducing the incidence of smoking. Some of the past government measures that have been aimed at reducing the number of smokers have included health warning labels, bans on marketing of tobacco products and bans on smoking in public places. Quite recently, even Victoria introduced a ban on smoking in cars when children are present. I am happy to say, as a former chief of staff of the Victorian Nationals, that it was a policy initiative I pushed very hard with the member for Northern Region, Damian Drum. The argument was that young children are basically captives in those cars—they have no choice about how they get themselves around—and should not be exposed to the dangers of passive smoking simply because their parents or friends have the habit. There have also been bans on smoking in public places generally and there have been graphic advertising campaigns and increases in the excises charged by governments.

On this point, it was argued in the House by the Minister for Health and Ageing that the findings from the National Health Preventative Taskforce supported increasing the price of tobacco. I am not arguing with those findings. The report said:

Increasing prices is one of the most effective measures that government can take to reduce tobacco consumption and prevalence.

Australia’s Future Tax System Review also looked at the issue of tobacco taxation and concluded:

There is a strong case for a substantial one-off increase in tobacco excise. Australian retail prices for cigarettes are moderate by international standards and taxes constitute a relatively small share of the retail price.

In her second reading speech, the minister went on to indicate that higher taxation makes a significant contribution to cutting smoking rates and that this has been shown to be particularly effective with young people, whom you would normally expect to have lower disposable income and would be more directly affected by an increase in price. Obviously, a key focus of any campaign to reduce the incidence of cigarette smoking is to target our young people, to target the next generation of addicts.

The measures in the bill add significantly to the cost of tobacco products and will increase government revenue over the budget forecast period. The government’s decision to increase the excise and the excise-equivalent customs duty rate by 25 per cent means that the increased tax on a packet of 30 cigarettes is about $2.16. This will push the price of a packet above $15. The government argues that it is part of a comprehensive package against smoking, including what it bills as a world-first decision to ensure that cigarettes in Australia are sold in plain packaging by 1 July 2012. I note the member for O’Connor raised some concerns about pending legal action from the industry and issues of consumer law.

On the point of the plain packaging, the cigarette industry throughout its history has shown a remarkable resilience and capacity to evolve with the times and to get around whatever legislation it is faced with that is aimed at reducing its marketing. I am sure the clever marketers within the tobacco industry will develop some form of slip-on packet or some sort of slip-on sheath, if you like, to promote their product. You can just imagine the scenario where there will be a black-and-white packet of cigarettes for sale and you happen to get a free container to put the cigarettes in—a container which will have the brand’s material splashed all over it. I am not sure whether the legislation can overcome that issue or whether the drafters of the legislation even considered that point. It seems almost self-defeating, though, if you have a black-and-white packet and the industry is out there giving away free coveralls or sheaths, if you like, to continue to brand their product to the marketplace, particularly to younger smokers who may be attracted to whatever product the industry happens to be giving away at the time.

That concern aside, the issue of the excise and the revenue generated for the government is significant. The total tobacco excise in 2008-09 was $5.6 billion and it is forecast to grow to $6.3 billion by 2013-14. Even though the minister has indicated that she expects the number of smokers in Australia to fall by two or three per cent—the previous speaker referred to an estimate of 87,000 people—the revenue to the government will actually increase over that forecast period.

I believe we need to keep having a broader debate about how we approach this whole issue of prevention and harm minimisation for cigarette smokers and whether we are serious about trying to reduce the actual number of smokers in the community over the longer term. As I said, the decline has been significant over the past 60 years, but the actual rate of decline has reduced in recent times. There are a few facts we need to consider from various pieces of research over the years. During my research on the bill, I found information suggesting that nearly half of smokers under the age of 30 had started smoking by the age of 15. I therefore believe it is critical that, in any public awareness campaigns we undertake, we really target young people and this myth that it is somehow cool to smoke.

The great difficulty we have in that is that the industry is so clever at product placement now. You see it in the movies and you see it in pop culture—it is very difficult to overcome that issue. I do not know how we are going to overcome it when there are Hollywood stars promoting an image of smoking that dates back decades and continues. The industry today has even more reason to engage in product placement and more surreptitious marketing of their products to get young people involved and to get young people hooked on their product.

On that point, tobacco is regarded as being more addictive than heroin or cocaine. People become addicted out of habit or in response to stress or they are physically addicted to the nicotine. I want to touch on that point a little bit later on. Smoking is also more prevalent among lower income groups and Indigenous Australians, with the average person smoking between 100 and 120 cigarettes per week. As previous speakers have indicated, Australia has a relatively low prevalence of smoking. In comparison to the rest of the world, I think we come in third behind Sweden and Canada. The points I want to make about these facts deal specifically with the issue of addiction. We are talking about addicts a lot of the time. We are talking about people who are taking up the habit and staying in the habit over a long period of time and about the fact that smoking addiction is more prevalent among our poorer households.

If you take some really rough figures and say that a smoker may smoke, say, four packets per week of 30 cigarettes each it works out to about $60 a week, which is somewhere in the vicinity of $30,000 a year and about $150,000 over a 50-year smoking career. That is a huge loss of income to a household over that period of time. I do have some degree of sympathy for addicts. As I referred to earlier, I grew up with a father who smoked throughout his whole adult life. He had a great deal of difficulty in kicking the habit. I do have some sympathy for the people who are addicted to nicotine. For some people it is almost impossible for them to break the habit. It is reasonable to question the point of whether increasing the excise is actually well directed to reducing the incidence of smoking in the community. By its nature as a flat tax it does have a higher impact on our poorer families in the community. Obviously a higher percentage of total household income is literally going up in smoke amongst those poorer socioeconomic groups as well as amongst our Indigenous community, which, as we heard previously, has a higher incidence of cigarette smoking.

I understand that cynics could say that the people choose to continue smoking. It is a voluntary tax and you do not have to pay it. If you give up the habit you do not have to pay the tax anymore. For someone who has never smoked that is an easy path for me to take. But, having seen my father and other close friends in great difficulty trying to give up the habit, I have more of an appreciation that these people are addicts. If the research is even close in saying that smoking is more addictive than heroin or cocaine, this is a product which is very difficult for some people to give up even if they want to.

When we are talking about people who are addicted to products like cocaine and heroin we have a whole range of supporting mechanisms in our community to assist them to get off that particular illicit substance. But when it comes to cigarette smoking we seem to take a rather more blunt instrument in the sense that we just keep pumping the prices up and hoping that the smokers will drop off by the pure weight of the financial impact on their lives. I am not convinced that that is the best way to go, particularly when you look at the unintended consequences. Perhaps in some of our poorer socioeconomic households you may have a mum and dad who still manage to find money for the smokes. I am not sure whether the kids in those households are getting the best and fullest opportunities to achieve the potential that they would have if their parents were not using so much of the household disposable income on cigarettes. I do understand that some of the cynics would say that they choose to continue that smoking, but I think we need to recognise how difficult it is for some people to give it up.

I believe if we are determined to reduce the number of smokers we really need to look at the issue of the nicotine patches. I understand they are not on the PBS for everybody—for veterans it costs $5.40 to purchase nicotine transdermal patches that have a dispense price of $54.78. Our Indigenous and Torres Strait Islanders pay $33.30 for the same product and, as far as I am aware, other people pay the full price. Nicotine replacement therapies are regarded as one of the best ways to break the habit.

I do accept that the real price increases and reductions in affordability have been regarded in the past as the most significant policy intervention to reduce tobacco consumption, particularly for young people on limited budgets. But some people, as I have referred to, simply cannot give up tobacco products and we continue to hit them harder with this excise. I am not sure when we start trying to be a little bit smarter in how we target those people, the genuine addicts, who, no matter what price we charge, will find a way to get their cigarettes or other tobacco products.

The other consideration I want to raise briefly in the time that is left to me relates to the increased cost of cigarettes and, as a result, the likelihood of an increase in illegal tobacco products. I want to refer to an article which appeared in the Age on 30 April this year by Lindsay Murdoch and Geoff Strong, which I thought was quite a good one in that it referred to the concern that perhaps an increased excise will end up, inevitably, making it more attractive for illegal tobacco products to get on the marketplace along with the consequent influence of organised crime. The article said:

Sydney University professor Renee Bittoun runs Australia’s only dedicated smoking cessation clinics in two of Sydney’s hospitals. She believes illegal tobacco, both locally grown and imported, is widespread and could account for a quarter of all tobacco being smoked in Australia.

I have no figures to back that up. I am just referring to the fact that the professor has given her opinion in that regard. The article continued:

Bittoun fears that the government’s increase in excise will further increase illegal tobacco’s market share, doing even more damage to the lungs of those who inhale its smoke.

That point is relating to the fact that health officials say that there is a dense fungal contamination found in tobacco products, usually because of the way it is cured. They believe that has a toxic response in lungs, liver, kidneys and skin and in allergies including bronchitis and asthma. This is in addition to lung cancer issues relating to the smoking of all tobacco products. It is an interesting point that the professor has raised. In the article she said:

“It is not hard to grow and, given it looks like big spinach, might not normally attract much attention. I have been told the Tax Office loses $400 million a year in excise due to illegal crops. Given the size of government excise, chop chop is very cheap and it is often sold under the counter by weight by unscrupulous tobacconists, grocers and even service stations.”

As I said, I do not have any additional research to add to that opinion but it does seem to make sense that, if you are forcing the price up of the legal product, there would then be more opportunities for illegal operations, and the value of the product is such that it will draw the attention of organised crime. The article went on to say:

Indeed, a 2008 report by the Royal Canadian Mounted Police identified 105 organised crime groups involved in illicit tobacco trading. Most of the groups were also involved in either drugs or weapons smuggling, or both. According to PricewaterhouseCoopers, tobacco smuggling has been linked to organised crime in Australia, including drugs, money laundering, identity fraud and stolen car rackets.

I do not seek to be alarmist or to take away from what I believe are the government’s good intentions in reducing the incidence of tobacco use in the community, but I think the point is well worth considering, particularly the issue of whether the plain packet legislation will actually be effective in the community or whether it will just be subverted by the industry as it comes up with its own way of putting a cover over the top of the plain packet. I am sure that those packets can be easily manufactured and made freely available, particularly to young smokers.

I also have concerns, which I have already raised, about how long we should keep on targeting people who are addicted to cigarettes through tax increases without looking at other ways to assist them if they are genuine in trying to give up. I understand that the government will be providing more funding for public health awareness campaigns, which is one of the few forms of taxpayer funded advertising I agree with. We see a lot of propaganda campaigns run by governments, but I believe that public health campaigns aimed at reducing the incidence of cigarette smoking would be welcome and have bipartisan support now and for many years to come.

I finish on a more optimistic note. The chairman of the Preventative Health Task Force, Rob Moodie, has a different view on the issue of chop-chop use that I referred to earlier. He says:

It is much easier in Australia to manage illegal tobacco than it is in … Europe, for example.

He goes on to say:

… policing illegal tobacco is going to have to be dealt with, but increasing the excise is likely to be a key tool to encourage smokers to give up.

As I said at the outset, I think we are dealing here with a very important social and economic policy area. The impact on the community and also the impacts on the government in terms of the health budget are very significant. I thank the House for the opportunity to speak on the bill tonight.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Thank you very much, Madam Deputy Speaker Saffin. I understand that you will be speaking after me in this debate. When somebody relieves you in the speaker’s chair, I am sure you will make an outstanding contribution to the debate. I rise to support theExcise Tariff Amendment (Tobacco) Bill 2010. I acknowledge the fine contributions that have been made to this debate by members on both sides of this House. I understand that the opposition will be supporting this legislation and that the member for Wentworth, when he was Leader of the Opposition, was also very committed to introducing an excise on tobacco.

This legislation puts into practice the government’s announcement of an increase to the excise rate applying to tobacco, cigarettes, cigars and snuff, and the relevant excise-equivalent customs duty rates applying to the equivalent imported products by 25 per cent, applying on and from 30 April 2010. Separate notices were gazetted on 29 April 2010 to give effect to the collection of higher excise and excise-equivalent duty rates. As required by the excise and customs provision that allowed the relevant offices to publish these gazettal notices, these notices specified that it was intended to introduce tariff proposals into parliament within seven sitting days of the sitting of the House of Representatives after publication of the gazetted notices.

As I said, there have been a number of fine contributions to this debate, and I think smoking is an issue that we as a society need to face. I was once a smoker myself, and I must say that I found giving up smoking to be one of the hardest things I have ever done. I appreciate how difficult it is for a person who is smoking to quit, but I have not had a cigarette now for almost 30 years. My father was a very heavy smoker and, as a result of his smoking, he got cancer had to have his voice box removed. I have many acquaintances who have smoking related problems and friends who still smoke, and I understand from their perspective how difficult it is to kick the habit and how addictive cigarette smoking is. But, no matter how we look at it, it poses an incredible risk to our health, and I think it is beholden on governments to look at ways that they can encourage people to stop smoking. This legislation is one tool of the many that need to be introduced by governments to address this issue.

The Preventative Health Taskforce looked at smoking and highlighted in its report that between 1950 and 2008—that is, almost 60 years—more than 900,000 Australians died prematurely because they smoked. That is a significant proportion of our population, and as a society we have lost many, many valuable people. Smoking is not only an enormous cost to our economy but also an enormous social cost, because every one of those 900,000 people had families, contributed through work to our society and during the stages of their illness there was a cost to our society. That really highlights the fact that we need to address the issue of smoking. The social cost of smoking exceeded $31 billion in 2005, but it is impossible to put a dollar value on the grief, suffering and loss of families. I was quite young when my father died, and I found it incredibly difficult to come to terms with it. But there was one and only one reason that he died, and that was the fact that he smoked in excess of 60 cigarettes a day. He was an educated man who knew that smoking was a health hazard, but he continued to smoke, and that is the case with many people.

It is very interesting to note that the Preventative Health Taskforce looked at a number of papers. In their final recommendation they highlighted a couple of things that we as a government and a society need to do to help people move away from smoking, and at the same time they acknowledged that it was going to take quite a considerable amount of time before smoking was eradicated in our society. There are still people taking up smoking. I am particularly concerned about young women and the impact it has on their health. I will talk a little about that in a moment.

The first issue that the Preventative Health Taskforce identified was that we needed to increase the price of tobacco products, invest more money in media campaigns and implement other policies. Increasing the price of tobacco products is seen as highly effective. People react to increases in price. It is one of many tools, but it is not the answer because, as has been said by other speakers, if a person is truly addicted to smoking they will go without something else. It is one tool but it is an important tool. It is a tool that needs to be taken up by government. The paper also suggested that policies and programs in combination would institutionalise the threat of tobacco. It also talked about plain packaging. The Minister for Health and Ageing has already made an announcement on plain packaging of cigarettes. It is one of many tools that need to be part of a feast of measures introduced by government to address the issue of tobacco smoking.

I note that today is World No Tobacco Day. As part of World No Tobacco Day, Minister Snowden has made an announcement in relation to putting in place more programs to assist Indigenous Australians to stop smoking. One program takes into account regional tobacco coordinators. There is one in the Hunter region, which is part of my electorate. There are also tobacco action workers and healthy lifestyle workers. In all, there are four workers in the Hunter, in the Newcastle-Lake Macquarie area, which most of my electorate covers. I am sure the Central Coast part of the electorate will also receive some coverage.

I would like to just quickly move to an issue that I think is very important and links very closely to not smoking: Go Red for Women. This month, June, the Heart Foundation is conducting its Go Red for Women campaign. I will be organising a special forum in my electorate. I will be inviting people who live within the Shortland electorate to come along to this forum. I will have some expert speakers to talk to the women of the electorate. It is a shocking fact that heart disease is the main cause of death of women in Australia. It is killing an average of 31 women every day and yet 80 per cent of women are unaware of the fact that heart disease is such a risk to their health. I note that 11,221 Australian women died of heart disease and 2,774 women died of breast cancer in 2008. That shows how many women and how many families are affected by heart disease. One of the key factors impacting on heart disease is smoking. The Heart Foundation makes the point that it is very important for women to stop smoking. In Australia 16 per cent of women who are 18 years of age and over smoke daily. One of the facts that I find quite disturbing is that young women are taking up smoking at a faster rate than young men. It increases the risk of heart attack and stroke, as well as cancer, obviously. It affects the arteries that supply blood to the heart and other parts of the body. It also reduces the amount of oxygen in a person’s blood.

Breathing other people’s smoke, second-hand smoke, is also very harmful. There have been a number of court cases that have highlighted this fact. It is also important to note that smoking is becoming a lot less socially acceptable these days. It is something that should be highlighted to women. There are a few key strategies that people can put in place. They can set a date for quitting and begin to change their habits. They have to learn how to handle stress and how to get around the urge of smoking. From my own perspective, I made a number of attempts before I was finally successful at giving up smoking. On a number of occasions I made excuses for starting to smoke again. I would say, ‘I’m stressed.’ There was always a reason.

There comes a time when a person needs to say, ‘This is the day I am going to stop. No more excuses, I am going to learn how to handle stress. I am going to do other things to handle those tough and stressful times’—things like exercise or going outside or doing something that just breaks that urge. It is important. Do not give up. If you have one cigarette, that is not the end. Do not see that as a failure; just say, ‘Okay, I made a mistake. I’m still going to undertake a quit program.’ Consider nicotine replacement products; call the Quitline. Once a person stops smoking, they find that they enjoy their food a lot more.

Overall, one in seven women smoke daily, but it is more common among women aged between 20 and 49. About one in every five women in that age group are daily smokers, and it is most common amongst women aged 40 to 49. As I have said, the proportion of young female smokers has increased, but after one year of stopping smoking, the risk of disease halves compared with those who continue to smoke. Between two and six years after stopping smoking, the risk to the person is reduced even more. Smoking was the fourth largest contributor to the burden of disease amongst females, responsible for six per cent of the total burden of disease in Australia in 2003. I think these are startling figures. I think they speak for themselves. During the month of June, during the Go Red for Women campaign, we need to consider these facts. We need to consider that by stopping smoking you immediately reduce the impact that it has on your health. The longer you refrain from smoking, the better it is for you. As I was saying before, two to six years after stopping smoking, the risk to your health is the same as that for a nonsmoker.

I commend this legislation to the House. I see it as part of a package of measures that is needed to reduce smoking in our community. I see that the Minister for Health and Ageing is in the chamber, and I know that she is committed to reducing the number of people who smoke in Australia. I note that she has a particular interest in young women and would be very supportive of the Go Red for Women campaign and the women with heart disease coalition. I commend the legislation to the House.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

I rise in strong support of the Excise Tariff Amendment (Tobacco) Bill 2010 and a cognate bill, and I want to thank the Minister for Health and Ageing for having the policy will to introduce such a measure because, yes, while we are talking about excise and customs bills, we are also talking about health. Health is the issue. And the health issue—the good health of all—has to prevail over all other considerations in this debate. I am pleased to see that people are accepting that.

When this legislation was first announced at the end of April there was a straw poll done in my local area. I came out in strong support of it immediately because of my long concern for the health impacts of smoking, and there was broad support in the community. Some people say that it can impact on those who are the poorest most severely, and I will turn to that in a minute, but just on the health issue: in the minister for health’s second reading speech she focused on a number of issues, and there is one that I just want to quickly reiterate—that is, smoking results in approximately 15,000 Australian deaths a year. That is just unbelievable. We talk about road accidents, we talk about other areas where one death is too many, but 15,000! And we still tolerate that people smoke. We understand it is an addiction and we understand that it has to be dealt with as such, but it is a health issue.

When we were doing the straw poll in my electorate of Page, I was asked if I believed in banning it. I said banning rarely works; we just have to make it so unpalatable and so difficult that people cannot do it. We know that prohibition did not work with alcohol and it does not seem to work with other drugs either. The minister also put some other figures on the record. I have had a background in health over the years, locally in particular, but also broadly—I was on the New South Wales Cancer Council—and I want to mention here Professor Simon Chapman and Dr Arthur Chesterfield-Evans, two people who are very proactive in trying to get smoking stopped in Australia. I just wanted to mention and commend their efforts. I have thought quite a deal about something else the minister said—that smoking is responsible for approximately 750,000 bed days in hospital every year. That is a lot of bed days; that is a lot of bed numbers. We are having a debate right across Australia about health reform. People want changes; they want things to be different. Can you imagine: if we had no-one smoking in Australia, there would be 750,000 bed days available for other people with other illnesses. We can imagine what that would do for our health and we can imagine what that would do for the budget.

I understand the total cost to the Australian society of tobacco is estimated at $31.5 billion each year. That is unbelievable. I know it is not just the 25 per cent excise that is being struck in this; there are a whole range of other measures that go, for example, to plain packaging and to internet advertising, and there is money being injected into hard-hitting anti-smoking campaigns—$27.8 million, as I understand it. On 31 May it was World No Tobacco Day, and that is the day on which the minister announced the $5 million that would go into Quitline. A lot of people in my electorate do want to quit, and they need help. My office manager quit two years ago—she knew I was going to say this, so it is all right!—and good on her. She smoked for a long time, and she smoked a lot. A lot of people here have talked about smoking. When I grew up it was normal—we did not know it was bad for us; we did not have that information. My mother smoked; everybody smoked—we all did; it was seen as normal. We now know the problems it causes, and with that knowledge we have to make changes.

The point I made at the beginning of my contribution is the point I want to finish on. It is frequently said, and I am often asked about this by journalists, that these measures will impact most on the poor. Like a lot of decisions, things can impact on the poor and we all have to be mindful of that. But this is a situation that we do have to change. We do not strike the excises and tariffs in a differential way—that is not how we do excise in Australia. What I can say is that people on low incomes and beneficiaries on government pensions and benefits have been helped in other ways, particularly over the past three years. The Australian government has reduced the tax burden on working Australians, and someone who gets $20,000 a year will have received a tax cut of $750 per year over the three years 2007-08 to 2010-11. If we go up the scale, someone on $30,000 will have received a cut of $750; $40,000, $1,800; $50,000, $1,750; $60,000, $1,350; and $80,000, $1,550. It is to the lower end of that earning scale that I am addressing these remarks.

A raft of other measures have been introduced, such as the Paid Parental Leave scheme that is coming, the education tax refund and changes to the pension. The pension has been increase by $100 a fortnight for singles and $76 for couples, and there is also the abolition of Work Choices and other measures. The government has introduced a range of measures over the last three years that have put more money into the pockets of people, and particularly those people at the lower end of the earning scale. I thought it was important to inject that into the discussion tonight.

In summing up, I strongly support these two bills being debated cognately. I support the health initiative of the 25 per cent increase in excise, and all the other measures that go with it. I support the fact that we are directing a lot of it to our young as well, and particularly to young girls so that it can be totally not cool to smoke. At the moment it can be seen as cool to smoke, and we have to make it uncool. Some of those hard-hitting ads certainly make it uncool. There is enormous pressure to smoke. With those comments I commend these bills to the House, and I also thank you, Mr Deputy Speaker Scott, for taking the chair and enabling me to contribute to this debate.

Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Link to this | Hansard source

in reply—I thank the member for Page and other members who have contributed to this debate on theExcise Tariff Amendment (Tobacco) Bill 2010 and the cognate bill. One thing is for sure—there is very broad support within this House as well as in the community for our taking this step and doing all we can to reduce smoking in the community. It is interesting, when you consider the last two contributions, to note the changing world and the success we have had in Australia in being able to discourage people from smoking. People tell their stories about how all of their friends smoked when they were young, and those of us of different generations, some of us even younger than me, have had an entirely different experience. That is a tribute to the work that has gone before us, but in a way it strengthens our argument that we need to take these next steps to ensure that we can reduce tobacco consumption even further.

As I have already outlined in the House, on 30 April 2010 the excise on tobacco was increased by 25 per cent as part of our government’s anti-smoking reform package. Since that time, the Australian Taxation Office and the Australian Customs and Border Protection Service have been collecting excise and excise-equivalent customs duties at the higher rate, and the legislation we have been debating today will formally confirm that higher rate. Of course, that needs to be passed by the Senate. While the opposition have indicated that they will support this legislation, they have suggested that it represents a tax grab and is not a public health measure. They say this despite the fact that this was a key recommendation of the Preventative Health Taskforce, and they say it despite the fact that this has been endorsed by bodies such as the Cancer Council Australia, the Australian Medical Association, the Australian Nursing Federation, the Heart Foundation and the International Union Against Cancer. And they say it despite the fact that every year in Australia over 15,000 Australians die from smoking related illnesses, and smoking is estimated to cause one in five of all cancer deaths.

I am pleased that, despite this criticism, we do now have the opposition on the record as being willing to ‘not oppose’ this legislation and to allow this important measure to proceed. Given how enthusiastically the legislation has been received in the broader community and the very clear public health outcomes, it is a shame that the opposition has had to be dragged kicking and screaming to this outcome. I think it is a shame that perhaps some of the members of the opposition were not carefully listening when these announcements were made, because I have seen, from some contributions including the shadow minister’s, that they have been calling for this money to be dedicated to health. We have already agreed to, and committed to, this money being dedicated to health. In fact, we have gone way beyond that. The Prime Minister, in his announcement, made clear that not only the increase in excise on tobacco but the entire amount of excise which is collected from tobacco is dedicated to health through the National Health and Hospitals Network Fund. The sad truth is we spend a lot more than that already on health because of the high demands on our system and because of the growing and ageing population. So I can make clear that those commitments have already been made. We do believe in making sure that you have the public health benefit of dissuading thousands of Australians from taking up this habit or of encouraging many to give up this habit. Also we can actually ensure that the sufferers of tobacco related diseases, who do require approximately 750,000 bed days of treatment in our hospitals every year, can get treatment. All this helps the sustainability of the health system.

I also want to add very briefly for the House’s benefit that when I introduced this bill into the House it preceded World No Tobacco Day, something that the member for Page, who is now in the chair, mentioned. That was yesterday and I used the occasion yesterday to announce another anti-tobacco measure, that the government will provide $5 million to help support Quitline services around Australia. Since the increase in the tobacco excise, there has been an increased demand for Quitline services. I think that has been proving our case that an increase in price does encourage people to give up. That is a good sign. We have had some reports that in some instances Quitline calls have doubled for a period of time. Whilst that is a very good sign about the number of people using this as an opportunity to kick what is a lethal habit, it has put some pressure on Quitline services. This extra funding will assist Quitline to provide their invaluable service, being there for people when they want to quite smoking. Of course, this was one of the other recommendations from the National Preventative Health Taskforce. It means that we have a comprehensive response to the problem of tobacco smoking in Australia. I urge members to consider this as an opportunity to pass that message on even more broadly.

I think some of those remaining few of my colleagues who smoke might be getting a little bit sick of me reminding them of this fact. But, as one of the other speakers in the House mentioned, smoking is a risk factor. Today we launched a report from the National Heart Foundation of Australia and the Australian Institute of Health and Welfare about the risks of cardiovascular disease to women, a disease previously known very much in the community as a disease of men, perhaps older men in particular. This report shows that it is a very large killer of women as well. One of the biggest risk factors is still smoking. We know we can decrease the burden of many illnesses in this country if we can persuade people not to take up this dangerous and lethal habit, and we hope that our package of measures will help encourage people to do that. I thank members for their valuable contributions to the debate. I thank the opposition for supporting these measures and I urge the House to support this bill and the cognate bill to deliver major preventative health reform in Australia. I hope that I can have the opposition’s support for all this to be treated expeditiously in the Senate. I commend this bill and the other one to the House.

Question agreed to.

Bill read a second time.