Nick Xenophon (SA, Independent) Share this | Hansard source

I support the Excise Tariff Amendment (Tobacco) Bill 2016 and the Customs Tariff Amendment (Tobacco) Bill 2016. This is important legislation, given that each year smoking kills an estimated 15,000 Australians and costs Australians $31.5 billion in social—including health—and economic costs. These are statistics from the Department of Health; they are uncontroverted. We know the damage that smoking does. There are some aspects of this legislation that ought to be ventilated in the context of how it will operate. I also want to raise the issue of the paucity of anti-smoking measures and support for those that want to quit smoking.

Back in 2004, as a member of the South Australian Legislative Council, I moved an amendment to legislation that the South Australian Labor government introduced to ensure there was a trial of at least 1,000 places, 1,000 individuals, to get the benefit of free nicotine replacement therapy. It was something that the Labor government in South Australia inexplicably opposed. It was supported by the opposition and the crossbenchers, and at the end of the day it got up and the trial went ahead, as I understand it.

The issue here is an important one. It is as relevant now as it was back in 2004—that is, governments seem to be willing to rake in massive amounts of revenue from tobacco excise. Let us put this in some perspective. In 2009-10, $5.6 billion was raised; in 2010-11, $6.3 billion; in 2011-12, $5.4 billion; in 2012-13, $5.8 billion; in 2013-14, when there was a jump in the excise, $8.4 billion; and, in 2014-15, the most recent year that I have details for, $8.8 billion. That works out to something like $40 billion over that period. How much did the federal government spend during that period on anti-smoking campaigns? The figure I have for that period is $135 million. When compared to something like $40 billion in revenue, that is a pretty poor effort.

If we are serious about reducing the smoking rate as quickly as possible to reduce the impact of smoking on the community, to ensure that we do not have 15,000 Australians dying each year because of smoking and to ensure that it does not cost our nation $31½ billion a year in social, health and economic costs, then we need to be fair dinkum about providing more resources for anti-smoking campaigns. We need also to make it easier for people wanting to quit by giving them all the support they need, and we need to ensure that we do not demonise smokers.

In relation to nicotine replacement therapy, an issue that I raised in the South Australian parliament back in 2004, the cost to government in repatriation, in PBS benefits for smoking cessation therapy, for 2014 was $47.8 million. There is a real issue as to whether nicotine replacement therapy ought be free or ought to be trialled on a free basis, rather than people having to put their hands in their pockets, to make it much easier for people to kick the habit. It is a very addictive habit. We need to assist people to kick the habit as soon as possible.

I will be asking the government what commitments they will be making with the additional excise they will get from this legislation. What commitments will they be making to ensure that there will be more help for people to quit smoking? I note the objective of these bills is to improve the health of Australians by reducing their exposure to tobacco products. Under this legislation, increases in excise ensure that average cigarette prices are more closely aligned with the World Health Organization recommendation concerning the proportion that excise and excise-equivalent customs duty should comprise of the price of a cigarette.

I hope this legislation will be examined in a short committee stage. I ask the government what commitments there are to spend the massive increase in tobacco excise the Commonwealth has been getting in recent years on nicotine replacement therapy, on Quit campaigns and on funding organisations such as Action on Smoking and Health, which I worked with over the years and which did a terrific job of advocacy in the public health space in relation to this. These are important issues that much must be dealt with, in my view, for the government to tell us what is happening in relation to this matter.

There is also another issue that concerns me and, whether you support or oppose this legislation, it ought to concern all of us. It relates to the flaws in the collection of this excise. An article in The Australian FinancialReview on 30 May this year by Joanna Mather and Fleur Anderson states:

An audit report has identified serious shortcomings in the collection of taxes on imported tobacco products, which are worth about $8 billion a year.

That report, by the Auditor-General, headed Administration of tobacco excise equivalent goods, in respect of the Australian Taxation Office and the Department of Immigration and Border Protection, was transmitted to the Speaker and to you, Mr President, on 5 May this year and raised some very, very serious concerns.

The ANAO report found that there were few checks and balances in place when it comes to the administration of tobacco excise equivalent goods and that the collection of customs duty had fallen far short of effective practice. I repeat that: the Auditor-General, no less, said that the way we collect tobacco excise in this country has 'fallen far short of effective practice'. The report says that the risk of noncompliance was assessed by the ATO as ranging from moderate in 2011 to significant in 2015, when there was:

… an observed increase in the number of entities displaying non-compliant behaviour that are importing tobacco and/or storing imported tobacco.

The Auditor-General's report goes on to say:

The ATO advised that the reason for the changed risk ratings over the years is largely a consequence of shifts in focus brought by different ATO managers when scoping risk assessments.

The Auditor-General says that the fact that the risk was raised to 'significant':

… was driven by the reputational risk for the ATO and DIBP—

that is, the Department of Immigration and Border Protection—

as a result of large seizures of illicit tobacco … and a noted increase in the incidence of theft from smaller warehouses (that account for approximately two per cent of the revenue collected).

The government ought to tell us what it is doing in response to an Auditor-General's report of May of this year that was very critical about the lack of checks and balances in place when it comes to the collection of tobacco excise. These are issues that ought to be raised. I again put the government on notice, given that there are a number of other speakers on this debate. What will the government do in terms of increasing the amount available for Quit campaigns to make it easier for those people that want to quit to get the help and support they deserve so that we can make even greater inroads into reducing the awful death rate from tobacco products and the enormous cost—the $31½ billion cost—to our community as a result of the consumption of tobacco in this country?