Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

In support of the Excise Tariff Amendment (Tobacco) Bill 2014 and the Customs Tariff Amendment (Tobacco) Bill 2014, I congratulate the government for taking up what we had suggested when we were in government—that is, to increase the rates of excise and excise equivalent customs duty on tobacco in a series of four-stage increases of 12.5 per cent commencing 1 December 2013 and indexation of the rates of excise and excise equivalent customs on tobacco to average weekly ordinary time earnings, instead of the consumer price index. The last CPI indexation occurred on 1 August 2013 and the first new indexation occurred on 1 March.

This is an important piece of legislation. On the face of it, it looks simply like a revenue measure. But it is more than that; it is not only about raising the excise and customs duty but also about preventative health as well. Tobacco smoking is the largest preventable cause of disease and death in this country. The social cost of the consumption of tobacco is $31.5 billion year and 15,500 Australians die each year of tobacco related disease. Each year in my home state of Queensland about 560 people die in Brisbane from lung cancer and other forms of cancer related to the consumption of tobacco. The instance of lung cancer in Queensland in women has increased 2.3 per cent recently. Fortunately in men it has decreased by 1.6 per cent. But, sadly, we are seeing about 32,000 Queensland children aged from 12 to 17 smoking weekly. That is simply not good enough. Quit Victoria reports there are now over 19,000 tobacco related deaths each year, higher than the accepted figure of 15,500 per year.

The Cancer Council estimates that the social cost of smoking to the Australian economy is about $31 billion. I congratulate the Ipswich City Council—my home city—which has banned smoking from pedestrian malls, particularly around Nicholas Street Mall and D'Arcy Doyle Place in the CBD. Not only has it produced a reduction in miscreant elements and criminal activity but it has also seen a beautification of the area as the council has also done up the mall. To say the tenor of the place and the lifestyle of the people of Ipswich in the CBD has improved would be to diminish the efforts of the council. I congratulate Mayor Paul Pisasale and particularly the councillor for the inner city of Ipswich, Councillor Andrew Antoniolli, for their initiative. So at a local government level work can be done, just as work is being done at a federal government level here by this particular piece of legislation.

When we were in government, it was clear that we were strongly committed to taking action in the consumption of tobacco. We introduced legislation to mandate plain packaging of tobacco products. I am pleased that in the end the coalition came through—they were dragged kicking and screaming. We made nicotine patches available on the PBS for all Australians who wanted to quit. Within the first year of quitting, smokers on average can save about $4,000 on their household expenses as well as reduce their risk of heart attack. Be under no illusions: smoking kills. It is as simple as that.

We need to take steps in this place to set a standard in conduct. Tobacco smoking has a terrible consequence not just for adults but for children who consume second-hand smoke and, as a result of that, themselves die. It is estimated that about six million people worldwide die from tobacco related heart attack, cancer, lung ailments or other disease, and that includes around 600,000 children—more than a quarter of whom will die from exposure to second-hand smoke each year.

I am pleased that this legislation is before the House. The World Health Organization estimates that the death toll from the global epidemic of tobacco use will rise to eight million by 2020. In fact, it is estimated that 100 million people were killed by tobacco in the 20th century, and tobacco use could kill about one billion during the 21st century if the rates continue.

This is a curse not just in the first world but in South-East Asia, where the largest growth in tobacco consumption has occurred, and it is there for all to see. If anyone chooses to travel to countries in South-East Asia, one of the first things that will strike them is the ever-present tobacco consumption, with a frequency and occurrence that we do not normally see here in Australia—although probably our parents and their parents before that would have seen that.

I have been pleased to see recent reports in my shadow portfolio of Indigenous affairs of a reduction in the consumption of tobacco amongst Aboriginal and Torres Strait Islander people. Again, this is key to improving health outcomes and to closing the gap. The results of the November 2013 release of the 2012-13 ABS Aboriginal and Torres Strait Islander health survey show that 41 per cent of Aboriginal and Torres Strait Islander people aged 15 years and over still smoke on a daily basis. This is a decrease from 51 per cent in 2002. So it represents a progressive decline in consumption and daily smoking rates for Aboriginal and Torres Strait Islander people. We are having success. It has been a slow process but there is clear success across Aboriginal and Torres Strait Islander communities in the country.

We need to set an example in this place in the consumption of tobacco and in our association with this particular industry as well. That is why I as a Labor Party member and as a candidate in the 2004 election was very pleased by our principled decision as a political party to cease taking donations from tobacco companies. It was the right decision from a preventative health point of view. It said that, even though this is a legal product, it is a harmful product to Australian communities, Australian families and Australian individuals. As a major political party—Australia's oldest and, I would argue, best and most national political party—we had to show an example, and we did. That has not always been the way of the coalition.

I moved a motion in the last parliament, on 11 February 2013, calling on all members, senators, candidates and political parties to stop accepting donations from tobacco companies. I then said, 'Mr Abbott, it is time to quit the habit'. The then opposition leader was eventually shamed, by then Prime Minister Kevin Rudd, into not accepting donations during the political campaign. I am pleased he took that up, honestly, and I am pleased the government have taken the step that they have today by this legislation. They have often had an equivocal attitude to this type of industry. Certainly, they have taken huge sums of money from the tobacco industry—millions of dollars after the Labor Party ceased to take donations. By the way, it is around about $3 million that the Liberal and National parties have taken from big tobacco since 2004—from companies like Philip Morris, for example.

The National Party, sadly, has continued to take tobacco donations. As recently as 5 February 2014, reporter Dan Harrison in TheSydney Morning Herald reported that the national federal director Scott Mitchell had confirmed—tragically, shamefully and disgracefully—on the Tuesday before this report, that the National Party was still open to donations:

'Our position has been that it's a legal product, they're legitimate businesses,' Mr Mitchell said. 'Like all other parties we accept money from a broad range of organisations and individuals.

I call on the National Party to follow what the Liberal Party and the Labor Party did years ago and stop accepting donations.

We have senior members of the National Party in the government, like the Deputy Prime Minister, the primary industries minister, the Minister for Indigenous Affairs and, curiously enough, the Assistant Minister for Health, whose responsibility is preventative health in this country. That minister has a responsibility not just in terms of front-of-pack labelling and preventative health but in relation to tobacco consumption as well, I would have thought. Certainly when I was Parliamentary Secretary for Health and Ageing, in the last year of office, I had those types of responsibilities. So it really behoves the National Party to listen to the Liberal Party and follow the longstanding and principled position of the Labor Party in not taking donations.

We stopped in 2004. The Greens, to their credit—and it is pretty hard for me, being from a rural and regional area, to ever give the Greens any credit whatsoever—have never accepted tobacco donations. Tobacco donations were banned in New South Wales. In August the then Leader of the Opposition said they would not take that tobacco funding.

The National Party, when they vote for this particular legislation, should ask themselves this question: 'Should we continue to take these donations?' If they want to take a principled and preventative health stand, if they want to stand up for the health of this country, and reduce the cost and burden of the chronic disease inflicted by this terrible product, they should do the right thing and cease to take these donations. I call on them, as they vote in favour of this legislation, to listen to their conscience, to think about doing the right thing, and to set the example, not just in their personal lives but also in their party lives, and stop taking these donations.

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

I rise to speak on the Excise Tariff Amendment (Tobacco) Bill 2014 and the Customs Tariff Amendment (Tobacco) Bill 2014. It is an honour for me to stand here, following speeches from two medical doctors on our side, Dr Andrew Southcott and Dr David Gillespie, and listen to their learned comments about the dangers and the health risks of smoking, which of course we all know. I note that Dr Andrew Laming, another medical doctor who sits with the government, was also due to speak on this bill but, due to a family issue, he has been unable to. Those two doctors detailed the evils of smoking and why we as a government must take proactive steps to reduce the rate of smoking in this country.

These bills actually implement a revenue-raising measure which the coalition inherited from the previous Labor government. The first increase in the cost of a packet of cigarettes under this bill has already taken effect; it took effect on 1 December last year. If we are looking at a standard pack of Winfield 25s, the excise increase that applied at 1 December last year was $1.23 and it took the average retail price for a packet of Winfield's up to $19.14. There are another three increases in excise under this bill. By 1 September 2016, this bill will have added an extra $6.45 to a standard packet of Winfield 25s, taking the average price, not even allowing for some inflation, close to $26 per packet.

This bill is a revenue-raising measure and it does raise significant revenue for the Commonwealth. In this financial year alone, 2013-14, it will be a net underlying cash benefit to the Commonwealth of $370 million. By 2016-17, this bill will have provided a benefit to the Commonwealth bottom line of $2.19 billion. On top of that, the state governments will also benefit because they will receive an increase in their GST revenue.

Going back to those rather remarkable tax raises, we have to remember that these have already been factored into the budget and are already factored into the forward estimates. Despite these very large increases in revenue, we are still facing the situation that, by the end of the forward estimates period, unless remedial action is taken, this nation will be $667 billion in debt.

This is also a regressive tax. We have to be honest with the people of Australia and admit that this will actually harm the lowest socioeconomic groups in the country—

Mark Dreyfus (Isaacs, Australian Labor Party, Shadow Attorney General) Share this | Link to this | Hansard source

You're meant to be supporting it!

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

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

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

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

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

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

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

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

It's a tobacco company study. They paid for it.

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

I hear the member for Sydney down there, and I am not sure whether she agrees with that study or not—

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

No, I don't, because tobacco companies paid for it.

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

You may be correct on that point. The point is that by increasing the retail price of cigarettes, by increasing the rate of excise on them, you increase the potential and you increase the risk of illegal cigarettes being imported into the country. It may well be true that our detection agencies are doing a better job, but the quantity of illegal cigarettes being seized by Customs has increased substantially over the last four years. That is a fact.

The risk is that these illegal cigarettes that are coming into the country are likely to be of poorer quality and therefore more harmful for the people who are smoking them. So there is a risk that, if the people we are trying to help here to get off cigarettes transfer to illegal products, it will actually be more harmful for them. Another possible unintended consequence is that if we make the price of cigarettes higher and higher there may be a risk that children will instead smoke other substances. These are risks that we have to look at.

I support these bills. I support this parliament doing everything it can to drive down the smoking rates, and I accept that raising the price is a legitimate way of doing that; however, we must be careful. We must monitor this, we must look at it very carefully, and we must make sure that it is actually effective in the years to come in driving down the smoking rates. This legislation cannot simply be about raising revenue to pay down debt; it must truly be about driving down the smoking rate and continuing to reduce the number of Australians in this country smoking. Therefore, I support the bills and commend them to the House.

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I am grateful that the member for Hughes is actually supporting this legislation—although you would not know that from listening to his speech.

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

You had to listen to it carefully.

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

You had to listen very carefully and suspend judgement. He said that, if cigarettes became dearer, there would be more people buying cigarettes on the black market. In fact, all of the evidence internationally shows the exact opposite is true. The countries that have lower tax regimes and looser laws about smoking actually have more counterfeiting and more illegal tobacco sold in them. So the exact opposite is true, Member for Hughes.

I and the opposition support the Excise Tariff Amendment (Tobacco) Bill 2014 and the Customs Tariff Amendment (Tobacco) Bill 2014. This legislation reflects our longstanding position, as a Labor government in the past and Labor opposition now, on public health and on evidence based policymaking. We know that increasing tobacco excise is one of the most effective ways of reducing smoking rates in Australia, and it is most effective when you are talking about kids taking up smoking.

We are glad that the Liberal Party have decided to pursue this policy. It was very difficult before the election to tell what they were going to do. One could see the dollar signs in their eyes but they were not really thinking about the public health effects of this policy. In 2013, when the Labor government announced this tobacco excise, the now Treasurer said:

It is going to increase the cost of living for smokers, but smokers could be pensioners, low-income people, it could be smokes and beers might be the thing that is important to them.

He went on to say:

I want to know what the impact is on lower income people of just increasing their cost of living.

It is very important to think about the cost of living, particularly for people on pensions and fixed incomes. But what we know about increasing tobacco excise is that the people who are most price sensitive are also those people who are on the lowest incomes and those who smoke a great deal, and the more you smoke, the more likely you are to have your smoking behaviour affected by an increase in tobacco excise.

The member for Hughes quite rightly pointed out that people on low incomes are more likely to smoke and that people who have a mental health issue are more likely to smoke and he named a number of other groups as well. I would add to that Indigenous Australians, who are twice as likely as non-Indigenous Australians to smoke. So the people who are most likely to be smokers are also most likely to cut down their smoking or quit because of a tobacco excise increase.

The thing to also remember about this tobacco excise increase is that, because it is introduced over four years—and it was quite deliberately designed in this way—smokers have time to quit or reduce their consumption. If we were just interested in dollars, it would have in fact been much more effective to increase the tobacco excise in one go, at the beginning, and raise more money all the way through. We deliberately did not do that, and the reason was that, by staging increases over time, we were able to telegraph to people to say: 'There is a cost increase coming. We are going to help you give up. These are all the resources we have to help you give up, and here is an added encouragement—the price is going up in the future.'

Smoking rates have dropped, and we on this side of the chamber are very proud that we now have the best five-year cancer survival rates in the world and some of the lowest smoking rates in the world. Yes, there have been efforts on both sides over many years to gradually increase the prominence of graphic health warnings, for example, and to introduce advertising campaigns and so on. From 1991, when about 25 per cent of people smoked, we have seen a drop to just under 16 per cent in 2010. If you look further back to the period after the Second World War, almost half of Australians smoked at one stage. So our achievement as a nation is something to be proud of, but we need to do better.

We have a COAG agreement. All of the states and the territories and the Commonwealth have signed up to a target of lowering smoking rates to 10 per cent by 2018—and here we have one smoker, Mr Deputy Speaker Mitchell, that we are going to get to give up in the next few years. We do need to do more. A 16 per cent daily smoking rate means that there are still about 2.8 million Australians who smoke every day. The cost of that to the health of the smoker—and I hope I am not making you feel bad, Mr Deputy Speaker Mitchell—is a substantial one in terms of health lost as well as the money they spend on smoking. It costs us as a community about $31½ billion a year to look after people who are smoking, with lost productivity and hospitalisation. About 750,000 hospital bed days each year are attributed to tobacco related diseases. So both the personal impacts and the impacts on our whole community of smoking are very substantial.

But there is very good news as well. People who do give up see a very marked improvement in their health. The risk of a heart attack drops sharply after just one year; stroke risk falls to approximately the same as a non-smoker's after two to five years; risks for cancer of the mouth, throat, oesophagus and bladder are halved after five years; and the risk of dying from lung cancer drops by half after 10 years. So, putting it bluntly, you can have very dramatic health improvements by giving up smoking.

Increasing tobacco prices is one of the most effective ways of reducing the impact of smoking-related illnesses in Australia and the premature death and disability that comes from it. I mentioned earlier in response to the member for Hughes that people who are more likely to smoke—those in lower socioeconomic groups and the range of people he mentioned earlier—are also more likely to have their smoking behaviour affected by an increase in the tobacco excise price.

I want to speak for a moment about Indigenous Australians because I am very pleased that the government has maintained the commitment to closing the gap on life expectancy. One of the most important things we can do to close the gap between Indigenous and non-Indigenous people when it comes to life expectancy is reduce smoking rates in Indigenous communities. There has been some fantastic work done to reduce smoking rates in Indigenous communities that I will refer to in a little while.

I want to talk about kids for just one moment. There is no smoker, no matter how dedicated and how much they claim to enjoy smoking, who says, 'I want my kids to grow up to be a smoker.' I think that as policymakers we have to bear that in mind as well. We should be working towards a smoke-free generation. We should be working towards a generation where no young person takes up smoking, and price is a big factor in that. We know that kids are very price sensitive when it comes to testing out smoking, trying it on and seeing how they like it.

When you look at the impact of smoking around the world, there are about six million people who die every year from smoking-related illnesses, including around 600,000 deaths from second-hand smoke. According to our current projections, we will lose one billion people this century to smoking-related deaths. Cigarettes in Australia are the cause of about 15½ thousand deaths every year in this country. I literally cannot imagine another thing that, if it were causing 15½ thousand deaths every year, we would not as a community, as a government or as a country be saying, 'What can we do to get this tragic death toll down?' We do it with car accidents. When we see the road toll creeping up, we change what we are doing. We re-emphasise a reduction in speeding. We send out more random breath testing units. We are always calibrating and renewing our efforts to prevent death and disability from car accidents, and we must do the same with smoking as well.

We have seen the proof. The member for Hughes questioned whether there is any relationship between an increase in prices and a reduction of smoking rates. We saw a 25 per cent increase in the tobacco excise in April 2010, and even the tobacco companies admit it worked. There was a decrease of about a 10 per cent in consumption of tobacco demonstrated through the importation of tobacco products. In fact, in August 2011 in the House of Representatives Standing Committee on Health and Ageing, the head of British American Tobacco, David Crow, stated:

One of the big statements that comes from this government and many governments is that pricing is one of the best means to stop access for children.

     …      …      …

We understand that the price going up when the excise goes up reduces consumption.

     …      …      …

There was a 25 per cent increase in the excise and we saw the volumes go down by about 10.2 per cent; there was about a 10.2 per cent reduction in the industry last year in Australia.

So from the words of British American Tobacco themselves, they admit that this is a way of reducing tobacco consumption that works.

I want to take a minute to acknowledge the work that the former health minister, Nicola Roxon, did in developing Australia's approach to plain packaging of tobacco products. Increasing prices is one part of it and advertising is another part of it, but our move towards plain packaging of tobacco products really was acknowledged around the world as world leading. In fact, during the time that I was implementing the plain packaging, we had an extraordinary amount of interest from around the world in the implementation of plain packaging.

The initial results from Cancer Council Victoria indicate that plain packaging is meeting its legislated objectives. The early results show that, when compared with branded pack smokers, those who are smoking from plain packs perceived their cigarettes to be lower in quality, tended to perceive their cigarettes as less satisfying than a year ago, were more likely to have thought about quitting at least once a day in the past week and rated quitting as a higher priority in their lives. When I was health minister I knew that because I kept getting phone calls after we introduced plain packaging from people who were really angry that I had changed the taste of their tobacco. Of course we did nothing to reformulate tobacco products, but the psychological impact of seeing that really ugly packaging was actually having an effect on people's desire to smoke.

We also invested more than $135 million in anti-smoking social marketing programs, which particularly targeted the high risk and hard to reach groups we were talking about like pregnant women and people with a mental illness. We had terrific phone apps, 'Quit for you—Quit for two' and My QuitBuddy—that were developed and released, and anyone can use them for free. As everybody knows, we updated and expanded the graphic health warnings. We introduced comprehensive advertising restrictions, including a ban on internet advertising from 6 September 2012. We put nicotine replacement therapies on the Pharmaceutical Benefits Scheme and extended the listings for smoking cessation support drugs like Zyban and Chantix.

We focused a great deal on Indigenous Australians and their smoking rates with $15 million for the Indigenous Tobacco Control Initiative, which funded innovative tobacco control projects in 18 Indigenous communities. There were also $100 million for the tackling smoking and $35 million for the healthy lifestyle measures under Closing the Gap. We did not do one thing; we did a suite of things. We need to, as I said, think again in the future about how we will keep our measures up to date. People become immune to one set of warnings, they become immune to one set of advertising, so it is important that we continue to recalibrate our efforts to reduce smoking so that the effect is new with each change.

It is terrific that the Liberal Party have finally been convinced to stop taking tobacco donations. I hope that the National Party will soon do the same. It is impossible to imagine that a government that is profiting from this industry will be as assiduous in its measures to reduce tobacco consumption as it should be for the benefit of the health of all Australians.

I have to say this is one of the things that I am proudest of in my time as health minister. This is a measure that will lead to fewer Australians smoking, and when we consider the toll, those 15½ thousand lives lost every year, 15½ thousand families who lose a loved one because of smoking-related illnesses, I cannot imagine a single other thing that was having this toll on the community, that had this death toll, being allowed to run unchecked in the way that some argue that, since tobacco is a legal product, it should be allowed to run unchecked.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I too rise to speak on the Excise Tariff Amendment (Tobacco) Bill 2014 and the Customs Tariff Amendment (Tobacco) Bill 2014. The bills are unashamedly all about increasing the cost of tobacco products. The customs tariff bill amends the Customs Tariff Act 1995 to enact two tobacco excise equivalent customs duty measures. The object in reducing the use of tobacco is to reduce the disease and premature death due to smoking. We have just heard the previous speaker talk about the 15½ thousand lives that are lost each year through smoking-related illnesses. It is not just that smokers are putting their own health at risk; those who have to work in an environment where there is secondary smoke inhalation also face problems with disease. It is simply not fair that something like this particular product consumption can be such an added burden to the costs of health in Australia when it is a product that has well-known cancerous and other poor health outcomes.

The bill imposes the same measures on imported goods, known as excise equivalent goods, as the Excise Tariff Amendment (Tobacco) Bill 2014 imposes on local goods. This ensures that the imported tobacco products are treated the same as local tobacco products, which is only right. The bill also changes the basis of indexation of excise equivalent customs duty on tobacco and tobacco products by moving from the consumer price index, the CPI, to the average weekly ordinary time earnings. The last CPI indexation occurred on 1 August 2013 and the first use of the average weekly ordinary time earnings has occurred in March 2014.

Australia, like most developed countries and now most developing countries, has had serious problems with addiction to tobacco products for probably the last 150 or more years. It has taken a long time for various government policies to really impact on the numbers of people smoking, and I really want to commend all those who went down the path of considering different measures, including the cost of the tobacco products themselves, and this bill is to do with the costs, and also the access. Children under the age of 18 are not allowed to buy tobacco products. Also, governments have looked very hard at how tobacco was advertised, where it could be advertised and when, and the packaging itself. Australia has led the world in introducing what we have colloquially called plain tobacco packaging. Of course it is not all that plain—there are the most gruesome pictures of diseased gums and ulcerated eyeballs. In fact, if you see a cigarette packet lying around somewhere it is the most shocking series of photos you can imagine. When you think it is a voluntary act to smoke, you can imagine that part of the reduction in smoking must be attributed to that plain packaging.

The thing that concerns me very much, though, is that while we have done such a great job with reducing the consumption of tobacco products there is still a growing number of young girls and younger people who smoke, and also there is a very high rate of smoking amongst Aboriginal and Torres Strait Islander communities. I was meeting just today with NACCHO—the National Aboriginal Controlled Community Health Organisation—and they were expressing concern about the continuing use of tobacco products in Indigenous communities. We need to focus on strategies which will work, because those settlements are often remote and those communities are culturally different, and focus on how we can help our Indigenous communities to reduce their tobacco consumption, particularly when we remember that there is also the impact on others who live in the same buildings or drive in the same cars as those who smoke. That secondary inhalation of tobacco smoke is dangerous to the health as well.

There has been a lot of work done on calculating what the costs are to the Australian health budget when it comes to diseases associated with cigarette, cigar or pipe smoking. There is a study that has used a measure known as the disability adjusted life year, reported in Tobacco in Australia: Facts and issues, an Australian government organisation study. It is estimated that in 2003 more than 2.63 million disability adjusted life years were lost due to disease and injury in Australia, though this was not just attributed to tobacco smoking. The 14 risk factors that they looked at included six lifestyle behaviours. They were tobacco smoking, physical inactivity, alcohol consumption, low fruit and vegetable consumption, use of illicit drugs, and unsafe sex. When these were further analysed as part of the 14 risk factors, they accounted for 32.2 per cent of the total burden of disease and injury in Australia. They found tobacco was responsible for the greatest disease burden, 7.8 per cent of the total, and it was the cause of 15,551 deaths, as we have already heard mentioned by other speakers, and the loss of 204,778 life years. Tobacco smoking was responsible for 20.1 per cent of the disease burden due to cancer and 9.7 per cent of the disease burden due to cardiovascular disease.

Alcohol is also responsible for a significant disease burden in our country, but also for other life-destroying and life-threatening behaviours like the increase in accidents and domestic violence. Alcohol consumption also causes absenteeism from work. Many are now concerned as to why it is that in Australia we have been world-first in our addressing of tobacco labelling via the plain package labelling and so effective in making sure that children are not exposed to tobacco advertising on their children's television programs, and we have significantly curtailed tobacco advertising in sport. Once, a common feature of sporting events was the robust-looking Marlboro man sitting on his horse smoking away at his cigarette on a big billboard overlooking the footy grounds. We have this incredible hypocrisy where, while we have been so good, so world-beating, in our addressing of the harms due to tobacco, we have not been as rigorous in addressing the harms due to consumption of alcohol, especially high risk levels.

So, I repeat, while we have been world-beating in terms of our tobacco advertising policies and our plain packaging, as a developed country we are one of the few left which still does not mandate alcohol labels on the containers which refer to the risk if you drink to excess or more than a standard number of drinks. We do not have labelling which warns pregnant women of the risks of consuming alcohol while they are pregnant. This is quite extraordinary, given that our wine producers and our brewers, but particularly our wine producers, who export to other countries often have to change their labelling so that they can conform with that other country's regulations in relation to the labelling of alcohol containers to reflect the risks associated with overconsumption. So I am battling to see how we can be as successful in our highlighting of the risks of consumption of too much alcohol. How can we use the lessons learnt in managing to bring down tobacco consumption in Australia? We have to look very carefully at the strategies that have worked for tobacco to see what can be used to reduce dangerous levels of alcohol consumption.

In Australia now we have an enormous focus on advertising alcohol in our sporting television features and programs, and many of these are live broadcasts occurring in children's viewing times. We still have a lot of alcohol sponsorship on uniforms and on sporting equipment around the country, and very often, in telecasts of major sporting events, the uniforms, the caps, the bats, the cars covered in their Jack Daniels signs—those are what are featured and flashed into the sitting rooms and kitchens of Australian homes so that children are fed that constant diet: that alcohol is associated with excellence, sportsmanship and winning, with being sophisticated and having fun times.

We have believed for quite a while in Australia that a code of voluntary labelling on alcohol containers would be sufficient to have compliance. The previous government in fact set deadlines for when the voluntary code should be adopted and when we should evaluate that voluntary period to see if in fact we needed to mandate labelling. That time was roughly October last year. We have passed the deadline. Nothing happened under the previous government to mandated labelling in this country, and that is long overdue.

I am also very concerned that the total cost to society of alcohol related problems in 2010 was estimated to be $14.352 billion, and those costs obviously cannot be borne by a country without significant erosion of other spending on things like health and education, or in supporting those who need a safety net. Of that $14.352 billion, $2.958 billion, or 20.6 per cent, represented costs to the criminal justice system—in other words, processing people found to be guilty of crimes associated with drinking over the limit, or drinking in an inappropriate way which led to, for example, violence. Also, of that $14.352 billion, $1.686 billion, or 11.7 per cent, was the cost to the health system of alcohol consumption in Australia; $6.046 billion, or 42.1 per cent, was devolved costs to Australian productivity; and $3.662 billion, or 25.5 per cent, were costs associated with traffic accidents—these were traffic accidents right throughout Australia, but in particular we know that Indigenous communities have more traffic accidents with more horrific consequences for individuals in terms of loss of life and permanent disability.

The estimate of total costs, however, does not incorporate the negative impacts on others, estimated in 2010 to be some $6.807 billion, and these are the costs associated with someone else drinking—someone living with you or someone who you encounter in a public place. These impacts comprised only perceived costs, of course; they have to be calculated, and it is an estimation. But many have been appalled by the random acts of violence that have been occurring outside some public places in New South Wales and Victoria, and want to know how you put a price on the loss of a life or on someone being traumatised or perhaps disabled. Clearly, we have productivity losses with a huge cost to our health system. We have reduced workforce and household labour due to premature mortality, reduced household labour due to sickness and reduced workforce participation due to absenteeism, and so it goes on—and this is in relation to alcohol consumption.

In talking about this bill, which is focusing on tobacco consumption in Australia, I want to congratulate previous governments and this government for understanding the huge cost of having an addiction to nicotine when smoking tobacco or tobacco products and the secondary impacts for those who might be living with others who use tobacco products. We are doing well in Australia, I think, in bringing down the consumption of tobacco, but there are still sectors in our community who need more help. Those include the Indigenous populations, newly arrived migrants and also our younger Australians. More women are smoking than they did before.

But I am asking in this debate that we now turn our spotlight on the consumption at high-risk levels of alcohol, because a lot of the tobacco reduction strategies can be applied to reducing the consumption of alcohol—in particular, the labelling and advertising regulations and the messages about the costs to the Australian health system and the loss of enjoyment of life for people who have been disabled or who have to live with someone who is addicted to alcohol.

I commend this bill to the House. I think it is a very sensible way to go. We know that the costs of tobacco products do have an impact on their levels of consumption, just as they do with alcohol consumption, so I commend this bill to the House.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I support the passage of the Excise Tariff Amendment (Tobacco) Bill 2014 and the Customs Tariff Amendment (Tobacco) Bill 2014 in the terms of the amendment moved by the member for Fraser. These bills seek to increase the rate of excise and excise-equivalent customs duty on tobacco through a series of four staged increases of 12½ per cent commencing on 1 December 2013 and running through to 1 September 2016. They also index the rates of excise and excise-equivalent customs duty on tobacco to average weekly ordinary time earnings instead of the consumer price index. The last CPI indexation occurred on 1 August, with the first AWOTE indexation occurring on 1 March 2014. These measures implement a previous policy announced by the former Labor government in the 2013-14 budget and in the 2013 Economic Statement.

The necessity for these bills is outlined in the following facts. The first fact is that 20 per cent of the male population in Australia still smoke and 16 per cent of females in Australia still smoke, and many of these Australian smokers will die prematurely because of their addiction. The cost of treatment and the social cost to the Australian budget is in the vicinity of $31 billion per year associated with smoking in Australia. That equates to about 750,000 hospital bed days in Australian hospitals related to the treatment of smoking related diseases. Quite simply, that is a large burden on the Australian tax-paying population, and it outlines why this legislation is required.

The bills also fit well with Labor's philosophy and long-held action, whilst in government, to reduce smoking. Labor believes that smoking kills, that smoking is an unnecessary and burdensome impost on taxpayers and on our budget and healthcare system and that the Australian government and state governments must do all that they possibly can to reduce the incidence of smoking in Australia and to make it as unattractive as possible to the Australian public, particularly to younger Australians. To do that, price signals in a market are necessary, but they must also be supported by various programs and social infrastructure to help Australians quit.

Labor's record on providing that social and community support to help Australians quit speaks for itself. In 1992 a Labor government introduced a ban on tobacco advertising in Australia. It followed it up some years later by strengthening that ban in relation to internet advertising. A couple of years ago, Labor introduced the world's first plain-packaging legislation, world-leading anti-smoking legislation, and the results of that legislation speak for themselves.

The plain-packaging legislation is working. It is fulfilling its legitimate objectives. This is outlined in research that was undertaken by the Centre for Behavioural Research in Cancer and Cancer Council Victoria that supported the fact that the plain-packaging legislation was meeting its legislated objectives. The results showed that, compared with branded-pack smokers, those who were smoking from plain packs perceived their cigarettes to be of lower quality, tended to perceive their cigarettes as less satisfying than a year ago, were more likely to have thought about quitting at least once a day in the past week and rated quitting as a higher priority in their lives—proof positive that Labor's reforms on plain packaging are working. And they are now being taken up or looked at by other nations.

Labor also updated the graphic health warnings on cigarette packaging. In government, we devoted $135 million to anti-smoking social-marketing campaigns, the development of apps and other social infrastructure to help Australians quit this devastating habit. We listed nicotine replacement therapies on the Pharmaceutical Benefits Scheme. We undertook the largest investment in support for Aboriginal and Torres Strait Islander communities to reduce smoking rates. In April 2010, we undertook a 25 per cent increase in the tobacco excise to send a price signal to smokers in Australia that they needed to quit this devastating habit. Labor's commitment through health and social programs speaks for itself.

Some opponents of this increase in the excise will argue that it is unfair because it hurts lower income Australians—that a larger proportion of Australians who smoke tend to be from a lower income bracket. That is an argument of which I am conscious. It is an argument of which Labor is conscious. I do have some sympathy for low-income Australians who are addicted to nicotine. But I would say to them, particularly those in my community, that I do not seek to punish you by supporting this reform. Labor does not seek to punish you by supporting and putting up this proposal. Labor wants to help you. We want to provide every encouragement for people to quit smoking. Harsh and unfortunate as it may be, the fact is that such increases in excise and customs duty do work. They do reduce the incidence of smoking within our society. Price increases for cigarettes discourage consumption and result in a reduction in smoking rates.

After the April 2010 increase in the excise, Treasury undertook an investigation into whether or not the price increase had had the legislative effect for which it was intended. Treasury looked at consumption of cigarettes in Australia after the price increase. What they found was that tobacco consumption in Australia reduced by approximately 11 per cent, in terms of the amount of tobacco that was being imported into Australia. There is also evidence that tobacco used amongst low-income groups is more responsive to a price increase than that used by those on higher incomes. That speaks for itself. It is obvious that those who are on lower incomes and do not have as much disposable income are going to be much more susceptible and elastic to an increase in price.

The cost of cigarettes in Australia in terms of the percentage of tax that makes up the price is still relatively low by international standards. In Australia, tax as a percentage of the price is about 60 per cent. In New Zealand it is 74 per cent, in the UK it is 77 per cent and in France it is 80 per cent. This is all evidence as to why this reform is required. Although price increases tend to be a somewhat blunt instrument, as the evidence outlines, they work. They work in reducing the incidence of smoking in Australia.

I have met very few people who have not been appreciative of the fact that they have been able to quit smoking, who have not looked back and said that it was a good decision to quit smoking, not only for their health but also for their family and their friends. That is not to mention the positive effects on the Australian economy, particularly on expenditure through our health budget.

Labor is committed to providing support for those seeking to quit smoking. In government we undertook a record investment in support programs coupled with appropriate price mechanisms when required. This staged increase in the excise and customs duty is an appropriate price mechanism to help Australians quit a deadly and addictive habit. It is an approach that is supported by the World Health Organization and by many anti-cancer campaigners. I commend the bill and the amendment to the House.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

Earlier today the Leader of the Opposition advised the House that I have been promoted to the front bench, which is a great honour for anybody who sits on this side of the House and any Labor MP. I was promoted to the health portfolio, and I was very keen to ensure that the first speech I gave after being promoted to the front bench was in this important area. This is essentially a public health measure.

The Excise Tariff Amendment (Tobacco) Bill 2014 and the Customs Tariff Amendment (Tobacco) Bill 2014 amend existing acts. Essentially, they increase the rates of excise and customs duty on tobacco through four staged increases of 12½ per cent, commencing on 1 December 2013, and index the rates of excise and customs duty on tobacco to average weekly ordinary time earnings instead of the consumer price index. I support the legislation. I think it is important. It reflects Labor's commitment to improving preventative health across the board and easing the pressure on our public health system.

The legislation that is before the House today had its genesis in a Labor policy initiative. Many who have followed it from go to whoa would be aware that when it was announced it did not enjoy the same bipartisan support it enjoys in the House today. Indeed, the then shadow Treasurer, now Treasurer, had some very unfavourable things to say about this proposal. Indeed, his first, and instinctive, comments were to support the interests of smokers in this area against the interests of public health. Thankfully, more sanity has prevailed and the government is now bringing this legislation before the House. It enjoys our wholehearted support. We support it because we know that tobacco excise works.

Looking around the world, despite the April 2010 increase, taxes are still relatively low in Australia as a percentage of the final price of tobacco products. The World Health Organization recommends that tobacco excises account for at least 70 per cent of the retail prices of tobacco products. According to the 2013 WHO report on the global tobacco epidemic, excise tax as a percentage of the average price of the most popular brand of 20 cigarettes in Australia is around 51 per cent. Australia lags behind other comparable countries in relation to excise tax-price ratios. For example, excise tax as a proportion of price for most popular brands of 20 cigarettes in France is about 64 per cent, in the United Kingdom is 62 per cent and in Ireland is 60 per cent. In New Zealand, our nearest neighbour across the ditch, it is 61 per cent. The contrast for total tax as a proportion of price is even starker. In France, for example, the total tax as a proportion of price for the most popular brand of 20 cigarettes is 80 per cent; in the UK, 77 per cent; in Ireland, 79 per cent; and, in New Zealand, 74 per cent. Compare that to Australia, where total tax as a proportion of the price is only 60 per cent. So there is still a bit of headroom in our taxation and excise arrangements when it comes to tobacco products.

I am pleased that those on the other side of the House are supporting this legislation and bringing it forward as members of the government. I am disappointed that it does not extend to a total approach when it comes to the tobacco industry. We know that tobacco kills people. It is the only product that, as a former Labor health minister said, when used exactly as the manufacturers intended it to be used, will kill you. And yet we find that on the one hand you have sound legislation like this being brought before the House and on the other you have members of the coalition party accepting donations from the tobacco industry.

The Liberal Party has accepted more than $3 million in donations from big tobacco since 1999. Happily, they have been shamed into embarrassment on this, but that cannot be said for all members of the coalition party. As recently as 4 February the National Party's federal director, Scott Mitchell, confirmed that the party was still accepting tobacco donations with open arms. It is extraordinary, isn't it? On the one hand we are bringing this legislation before the House for a proper public health purpose and on the other hand we have members of the coalition party putting their hand up and saying, 'We will support the tobacco industry by taking their donations.' That is extraordinary in and of itself. It is even more extraordinary when you understand that the government minister who is charged with responsibility for preventative health is a member of the party which has its hand out and is accepting donations from big tobacco.

Over the last couple of weeks we have heard much in this House and the other place about the conflicts of interest that exist within the office of the Assistant Minister for Health and that exist now with the financial contributions that have been made to the National Party, the party of the Minister for Health. It is time, as we see government member after government member come the dispatch box and stand here in support of the legislation, that they do the right thing, take the next step and say, 'From this day forevermore we will disavow donations from big tobacco.' That would be the right thing to do if they want to send an important signal, if they want to send a powerful message, that they stand in a bipartisan way in opposition to big tobacco and the harm tobacco products cause as every new generation of young Australians takes up the habit. Yes, it can be done through the taxation and excise system, and that is a good thing; but, as political and community leaders, we can go a step further and say, 'We will lead by example and we will not take donations from this industry, because we want to see the sunset of this industry and see that happen sooner rather than later.'

This is important legislation. As I have said, it follows from policy initiatives that were brought forward by the previous, Labor, government, and we have a proud record in government of dealing with public health initiatives which are aimed at reducing the incidence of smoking. Our plain packaging legislation was another piece of legislation which originally did not enjoy the support of those opposite. It is now in place and, I hope, entrenched, having survived several legal challenges to its validity. It is this sort of action, this sort of leadership, that is needed if we are to tackle and succeed in ensuring that the scourge of the diseases caused by smoking are addressed. This parliament has a role in showing leadership on the issue. I commend the legislation to the House.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I thank those members who have contributed to this debate. These bills increase excise and excise-equivalent customs duty on tobacco and tobacco related products under a staged process. The first 12.5 per cent increase occurred on 1 December 2013, and further 12.5 per cent increases will occur on 1 September 2014, 1 September 2015 and 1 September 2016. Additionally, commencing 1 March 2014, tobacco excise and excise-equivalent customs duty will be indexed to average weekly ordinary time—AWOT—earnings instead of the CPI. The dates of indexation will change to 1 March and 1 September each year to accommodate the release of data by the Australian Bureau of Statistics. These changes were previously gazetted on 29 November 2013 and tabled in the House of Representatives as excise and customs tariff proposals on 10 December 2013.

The government does not support the opposition's amendment. I note that the member for Boothby appropriately highlighted the hypocrisy of Labor's attempt to play political games with this bill, and I commend him on his contribution to the House. Fundamentally, the Labor Party in this debate has made a raft of inaccurate comments with regard to what they like to call the 'morals' of this side of the House. The reality is that the Labor Party should not be in a glass house when they choose to throw stones. We have seen this on an ongoing basis. The Labor Party, last financial year, took $6.1 million from trade unions as donations to their political party—

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

You're comparing unions to tobacco? Are you serious?

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

including donations from trade unions where the workers' wages were garnished by trade unions and union organisers who were involved in illegal criminal activity. And we have not seen any refunds, for example, from the Labor Party to those unions where some of the union funds raised had been inappropriately used.

To go to some of the interjections made by shadow ministers Leigh and Albanese at the table, last time I checked tobacco was still a legal product. The Labor Party need to remember the actual lay of the land. The last time I checked legal products were still run by companies operating in a legal way as opposed to some of the donations that have been received by the Australian Labor Party from unions, where corrupt union organisers have overseen the use of the wages, often, of people from some of the most disadvantaged positions in our society. I remind the Labor Party of that background before they get too sanctimonious, as they so frequently do—remembering some of the sanctimony we have already seen from Labor in relation to some other matters that have come before the House. Nevertheless, I take this opportunity to remind the Labor Party of that, that they are not quite as polished as they like to think nor as pure as they like to think. On that basis, I commend these bills to the House.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The immediate question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.