David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The taxation of tobacco in Australia.

Tobacco taxes are no joke. Australia currently has amongst the most expensive cigarettes in the world. Most of this is due to tobacco taxes. A typical pack of 25 branded cigarettes currently costs about $28. Even the cheapest brands are over a dollar a stick. Of this, about three-quarters is swallowed up by the government. In other words, the government collects more than 75 cents on every smoke.

The Abbott-Turnbull Government's decision to implement Labor's policy of a series of four 12.5 per cent annual increases in tobacco tax was appalling. But, of course, too much is still not enough. Both Labor and the Liberals are intending to push up the tax even more. More than four-fifths of the cost of a pack will be tax. When smokers buy a pack of cigarettes, they will get little change from $40 and they will pay around $32 of tax.

This money is being taken from Australia's poorest people. It is acknowledged on all sides that our poorest citizens tend to be the ones who smoke. Smoking is highest among low-paid workers and among those who do not have jobs at all. Among prisoners, ex-prisoners and drug users, it is well over 50 per cent.

Increases in taxes on cigarettes means thousands of Australians, struggling to pay for their groceries or school excursions, will be hurt even more, because of the insatiable greed of governments underpinned by middle-class snobbery.

The assertion that smokers hurt non-smokers by claiming more than their fair share of government spending is wrong. It is simply not true. It is not something to be pleased about, but the evidence shows that, by dying early, smokers save the public purse. Smokers receive fewer years of age pension payments and incur lower lifetime public health costs than non-smokers.

A 2008 Dutch study found that, due to differences in life expectancy, lifetime health costs are highest for people with a healthy lifestyle, lower for obese people and lower still for smokers. Other studies find similar macabre results. If it is true that we need to recoup public costs from people's lifestyles—and I do not believe we do—then we ought to be imposing more tax on running shoes, gyms and health food. Smokers have been estimated to generate public health and bushfire-related costs of around half a billion dollars a year, and yet the government collects more than $9 billion in tobacco excise each year. This means smokers contribute at least 17 times more than they cost the public coffers.

But even if you accept the argument that smokers impose significant costs on the healthcare system that need to be recouped via taxation, as soon as tobacco excise is used to fund something unrelated—whether it be Gonski or shipbuilding—it ceases to be about healthcare; it is about raising revenue to spend on other things. The poor, Indigenous, prisoners and mentally ill are paying for the sorts of untargeted spending that are of most benefit to the middle classes. More than 40 per cent of Indigenous people smoke, and their families are about to get a whole lot poorer. So much for closing the gap.

Nobody would argue that it is a healthy choice to continue to smoke, but it is also not good for the welfare of low-income families to be spending more and more of their income paying cigarette taxes. It is also not necessarily good for raising money. Quite a lot of the additional revenue the government collects in tobacco taxes is already money that it has paid to smokers in the form of benefits, including welfare and pensions. Raising tobacco taxes will simply increase this churn, leaving poor families with lower standards of living and increasing pressure on the government to boost benefits. Another effect of the tax increase will be continued growth of the illegal tobacco market. This currently accounts for over 14 per cent of the total tobacco market, as measured by KPMG. The government receives no revenue from the organised crime gangs that run it, and is now missing out on over a billion dollars a year in tobacco excise. That is a billion dollars that could go towards closing the gap.

Public discussion of the tobacco tax, carried out with missionary zeal by politicians and public health officials, entirely ignores the welfare of those who continue to smoke despite it. It is as though the only people who count are converts to non-smoking orthodoxy, while those heathens who continue to smoke are collateral damage. But Labor and the Liberals' plan to pick smokers' pockets is not just about robbing the poor; it is about robbing the poor to pay the rich. Labor wants to use tobacco tax revenues to prop up free access to state government schools, rather than charge rich parents for such access. And the Liberals want to use tobacco tax revenues to fund things like the extension of childcare subsidies to people with high incomes.

It is bad enough that smokers are prohibited from smoking in places where there is no prospect of causing harm to other people. It is bad enough that private property owners are prohibited from deciding for themselves whether to permit smoking on their premises. But robbing the poor to pay the rich is unconscionable, whether your political views are left, right, authoritarian, libertarian or a splitter from the People's Front for the Liberation of Judea.

The Liberal Democrats believe in the liberal principle that it is only legitimate for the government to intervene when it is to prevent harm to others. We will never vote for an increase in taxes or a reduction in freedom. I am proud to stand up to for smokers on both counts. We support the right of smokers to choose whether to smoke, irrespective of the fact that they might be making an unwise choice. We alone offer smokers a choice at this election to take a stand against greedy governments and the equally disgusting puritans who want to tell them how to live their lives.