Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

I inform the Senate that at 8.30 am today Senators Leyonhjelm and Moore each submitted a letter in accordance with standing order 75 proposing a matter of public importance. The question of which proposal would be submitted to the Senate was determined by lot. As a result, I inform the Senate that the following letter has been received from Senator Leyonhjelm.

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The taxation of tobacco in Australia.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to 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.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

I find myself in a unique position in that I agree very much with the sentiments that Senator Leyonhjelm has put forward—but I am going to be entirely more moderate in my use of analogies and my wording today.

Marise Payne (NSW, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

You used the 'M' word.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Yes, moderate. It is a word that does not pass my lips very often, Senator Payne. I stand here—and I need to get this on the record—as no fan of smoking. I do not endorse smoking. I am someone who struggled very much and with great difficulty to kick the habit. It took me getting seriously ill before I could actually stop smoking. It is something I do not want my children to do. I think it is probably the single dumbest thing anyone can pick up. It does not taste good, to start with, and you have to spend a lot of money to do it. But, nonetheless, people do have the right to consume a legal product in this country in a legal manner.

Where those products are put forward, I do think it is important for governments to stop treating individuals as simply economic units—if I can characterise it like that—and they should not just be seen as cash cows for spendthrift governments to pursue policies that rarely pass the common-sense test. I make the point that successive governments in this country have always looked towards smokers and drinkers as one of those economic units. When I was a younger man, the headlines used to be: 'Budget—cigs up and beer up'. That was just accepted as part of government revenue raising. I think we have to start to reconsider how governments are raising revenue and what the government is actually spending the money on and think about whether there might be a better way.

For those who were characterised as the puritans or the nanny state brigade—and I hope I am accurately reflecting what you said, Senator Leyonhjelm—who simply say that people are consuming a product that is causing them harm and therefore we should dissuade them from doing something, I ask: where is that going to end? We already have advocates in this place and out there in the public sphere who say that we should be levying a tax on products with sugar in them, that we should be having fast food taxes and that we should be banning all sorts of advertising. The same rhetoric, the same sort of terminology and the same emotive arguments are being put forward with regard to a whole range of new issues that first began with tobacco.

We know tobacco is bad for us. We know that if we can discourage people from smoking, through education and making wise choices, it is a positive. But simply entreating those who are addicted to nicotine, which is a serious addiction, by putting the price up when, as Senator Leyonhjelm, points out, many of these people are already being funded by, to a large extent, government welfare initiatives, we are right to ask ourselves: 'What's the point?' It would mean the cost of living would rise and we would need to endorse increases in welfare—and, in some instances, indulgences—rather than holding people responsible for themselves.

This is a tough debate and it is a tough argument to win. It is very easy to push the emotive button and say: 'Smoking is bad for you. By making it more expensive, we're going to discourage people from smoking.' There may be some research that supports that, but I am always sceptical of advocacy research. On plain packaging for tobacco products, we have been told that a whole bunch of research attached to that has reduced the rate of smoking. But the evidence, I think, is somewhat to the contrary. In fact, the review of the policy—we have investigated this at Senate estimates—came after the policy had actually been implemented; they were asked to comment on the 'proposed' policy after it had already been in permit. So they have got the cart around the wrong way; that is how I would characterise it. They are not really interested in the social outcomes; in my mind, they are more interested in getting the revenue. We should come back to the principle that governments have enough money already, if they stick to their knitting. For those on the other side who say I am like a broken record on this, it is true, I am—because there is plenty of money if we stop wasting it, if we stop the money-go-round and the churn, if you will.

Senator Leyonhjelm made a point about subsidising child care—and that is why we need the government to justify taking revenue from another part of society. I have a view that, if we took less from people in the first place, they would then be able to make choices—whether it be in regard to child care, housing, health care or anything else—without needing subsidies from government. And that would free government up to look after those who are truly in need—those who need guidance and assistance in leading an appropriate lifestyle in this country free of poverty—and to make sure children can be educated no matter the parents' circumstances.

But we have got to address the elephant in the room, and that is that there is an increasing number of people out there who are demanding that government do things that are really the responsibility of individuals themselves. I stand to be corrected on this, but I think there was a report last week that basically said that the half of the population who are paying tax are subsidising the other half who are not. Basically, one-third of people are responsible for paying taxes in this country because something like 50 per cent of taxpayers get more in benefits or accommodation from government than they actually paying tax. This is insane, it is ridiculous, it is completely unsustainable. If you need any more evidence that it is unsustainable, simply look at the demography—which the Prime Minister referred to in his first speech to the parliament. Demographics determine the future fate of a nation as much as anything else. The number of welfare dependent people we have in Australia—people who are not paying their fair share or however you want to characterise it—is growing so much that we are in an unsustainable circumstance. The children in this country—and there fewer of them coming into the world—are going to be the ones responsible for propping up a system that seemingly no-one is prepared to say we have to change. It means a smaller number of people are going to be supporting the demands of a greater number of people.

We in this place today have a responsibility to say: 'Enough is enough. It's not for our children, in the next 20 years, to subsidise the indulgences of today; it's not for their children to subsidise our lack of wherewithal and say, "We've got to change the system."' There is a better way. We cannot continue to have government growing to be the major share of our economy; we cannot have it so that 50 per cent of the people are paying and subsidising the remaining 50 per cent of the people. So governments need to get themselves off the drip of saying: 'That person is using; let's continue to ramp up the taxes.'

Coming back to tobacco tax, a 12.5 per cent excise increase is scheduled for 1 September—and that is the fourth 12.5 per cent increase. When are we going to say enough is enough? When are we going to see the arguments about sugar taxes, fast food taxes, extra grog taxes and all of these things, which I do not think are legitimate, being extended into a whole range of other areas because some nanny-statist comes out and says those things are pretty bad for us? There are lots of things I do that are pretty bad for me. Playing football on the weekend was really bad for my physical health. But I am not asking anyone to subsidise that—except for my chiropractor, who I think is going to buy a new car as a result of the injuries I have sustained! But that is not the point. The point is that I am taking responsibility for that. If I choose to smoke, as inane and silly as I find that, then let me accept that responsibility. If the government does not like it, let it ban smoking. It will not—because it knows that that is an impingement on freedom and it is wrong to impinge that freedom through the taxation system.

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

I can assure Senator Bernardi that I will not be going into any emotive arguments in my contribution. In terms of emotive arguments, it is not emotive to actually put before the Australian community the cost to the individual and to the community of smoking in our country. I know that the AMA has done significant work in this area, as have public health organisations, and it is clear that the impact of smoking on our community is strong. People's lives are impacted. I do take Senator Leyonhjelm's point—macabre as it was, Senator Leyonhjelm—that people who abuse their bodies in different ways, including smoking, end up dying earlier and costing the community less. It is an interesting point, and possibly accurate, but not one that I think any responsible government would build into their plan for the future.

Our position is very clear: we announced last year that we have a policy around increasing the tax on tobacco, for a number of reasons. One is for the health of the community, but also we are looking at a way of raising funds. It is true: there is a double incentive for what we are doing. But in terms of the process, the core argument is to ensure that we have the healthiest possible nation so our people will have informed choice. There is nothing about the policy that actually takes away individual choice on whether people choose to smoke or not. Basically, though, we mean that this choice must be informed. It must be informed on the level of knowing what the health risks are and what the impact of smoking will be. Part of our argument around that, as a Labor government, was introducing the plain packaging process, which was an attempt to show people—when, with free will, they purchase a product that is not illegal—what the consequences would be of taking up smoking and of buying that packet of cigarettes. That is an informed choice about what the health impact will be.

A second informed choice is the economic cost of choosing to smoke. Senator Leyonhjelm said our tobacco taxes are one of the highest in the world. The evidence I have is the evidence from the World Health Organization that says our tobacco taxes are not one of the highest in the world. There is always a graph; it does not matter what the topic is, you can always find someone to put things in some kind of linear form. But, at this stage, the World Health Organization currently considers that raising tobacco taxes to more than 75 per cent of the retail price for tobacco products is amongst the most effective and cost-effective tobacco control interventions. This is an interventionist policy. I know that is something with which Senator Leyonhjelm does not agree, but it is factual. We have a different belief in this area. Having a tobacco tax is an interventionist policy, and it is interventionist because, again, we want to ensure that people who make the choice to smoke are clear about the impacts of doing so.

As you know, Labor introduced a series of excise raises during our government. The proposal that we have put forward, should we be elected, is an introduction of four annual 12.5 per cent increases in excise. Following the four 12.5 per cent increases in excise, taxation as the proportion of the retail price of a packet of cigarettes would sit around the World Health Organisation's target of 75 per cent. So, should this particular policy come into being, when you see a graph in the next round of our government you will see that we will be above where we currently are in terms of the impact of taxation on cigarettes. That is an important element; we have not shied away from the fact that the current Labor policy position has been costed by the PBO to raise about $3.8 billion over the current forward estimates period and $47 million over the medium term. With this increase, into the future people will be contributing more to the Australian economy.

That is the taxation impact of the choice that they make to smoke, but, in terms of the overall policy, we believe that the tax impost is but one element of the changes we want the Australian government to make for the community to ensure that their choices will be informed. I have mentioned the plain packaging process, and, of course, the evaluation of that process will continue. No change should be allowed just to sit there without evaluation, so we will continue to evaluate the impact of the plain packaging process. We know that other nations have been looking at what Australia did in that area and looking to see whether they could introduce it in their countries as well. We know also that under Labor we put the nicotine processes that you could use to wean yourself off the smoking habit on the PBS. So there is that element: you can get support with medication that you will be able to use if you make the choice that you want to stop smoking.

Most importantly, linked to this economic change, we need to ensure the availability of education programs, which were funded under Labor and which gave particular support to people who were wanting to try to stop smoking. Senator Bernardi graphically described that choice to us. In terms of supporting those choices amongst the population, we think that that counselling and support program should be available across the board and, in particular, to those groups of the population who have been identified as smoking more heavily than others. There has been considerable research done in that area, and one of the areas that I am most concerned about are the Aboriginal and Torres Strait Islander communities where, at this stage, according to the statistics that we have, they would be most likely to be the victims of the statistics Senator Leyonhjelm described about the fact that their lives are cut short by a range of choices that they make. We need to offer support in those communities to see that there are options and there are ways that you can make personal choices that are stronger for you and your health. To ensure this support is available, we are very concerned that those programs that have been introduced must continue to be funded. At the moment there is some uncertainty about that, as you know, with the funding processes.

In terms of the overall argument, it is clear that we need to ensure that our community is as healthy and as strong as it can be. Our figures indicate that each year in Australia tobacco still kills more than 15,000 people and has more than $31.5 billion in health and economic costs. That does not mean just because you light up a cigarette you will immediately be killed. Some people try and make the stats way too direct and build up fear. We believe, as does the AMA work, that smoking is a contributing factor to the deaths of that large number of people in Australia. We as a nation should be taking that really seriously and looking at any way we can to ensure that our country is stronger and that we are able to, clearly, define what is in the best interests of our community and what is not.

It is a highly contested space, the argument about whether increasing the price will reduce the numbers of people using a particular product. It has been looked at in the area of alcohol. We have heard about sugar this afternoon. It is one of those things where you have to weigh up the evidence. So much of it is in front of you. Senator Bernardi's comment that some of it could be swayed in a particular direction is quite real. Any evaluation of any program should be as independent as possible. But the bulk of the evidence we have, over many years of research, indicates that the price mechanism is one aspect of the decision. If you increase the price of a particular product, whether it be tobacco or housing or anything else, it impacts on the choice that someone makes.

The measure we have in front of us about taxation around tobacco is one the Labor Party strongly supports. We believe we should use this as an interventionist policy along the lines of ensuring that there is an informed choice by people in the community on whether they wish to continue to smoke or not. It has a double impact. If people choose not to smoke, we believe, that would be beneficial to their health. It would also impact on the figures that could be saved in this particular program.

We have built up a policy that looks at the health of a nation as well as a way of increasing taxation in our budget so that we will be able to get income as a result of a measure that we are taking for the double purpose. When we introduced this particular tax in our policy, last year, the government decided it was an outrageous grab on citizens' money. We believe, now, that they are supporting that as an economic issue. (Time expired)

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

I was able to hear the first part of Senator Leyonhjelm's speech, which was more of a pitch for tobacco donations to help fund his re-election campaign than it was based on evidence or fact. Senator Leyonhjelm is, clearly, somebody who benefits substantially from those huge donations from the tobacco industry. Given that this is his last opportunity to talk to the likes of Philip Morris and British American Tobacco about what a wonderful senator he has been, representing the interests of the tobacco industry, he felt it was important to take the opportunity in this final week to remind them that it is worth them tipping into his campaign.

He talked about tobacco taxation as theft and called it a tax on people having a good time. Having worked as a GP and having seen somebody gasping for breath because they have end-stage emphysema or lung cancer, they would not call what they were experiencing as 'having a good time'. The young kid who has lost their mum or dad prematurely, as a result of a tobacco related death, would not say that they were having a good time. He also described tobacco taxation as theft. He completely ignored the theft from the disreputable and amoral tobacco industry that has a long track record of having lied before Senate committees, of shredding evidence and documents, and doing everything they can to prolong a business model they know has only a matter of time before it is broken.

Despite the fact that across most developed countries we are seeing significant declines in smoking rates, the tobacco industry is aggressively targeting those low-income countries that have poorer levels of governance and that are more open to corrupt activities. It is the tobacco industry that is responsible for fuelling a boom in smoking amongst those developing nations. They are doing it because what they are selling is a nicotine delivery device—to use their own words—to ensure that they get their customers hooked and keep them hooked.

We know that the consequence of that is a product that will kill one in two regular users. Just think about that. It is a legal product that will kill one in two regular users. If that product were seeking to be registered or licensed, today, it would never be able to be sold legally. Yet we have a product that is responsible for about 20 per cent of all cancer deaths. It is responsible for about 15,000 preventable deaths in Australia each year. In the time I have given to making this speech, somewhere around 100 people will have died as a result of this product.

We know the huge costs it imposes on people and society. We know it is over $30 billion in social and economic costs. You know all the statistics. You know what a harmful product this is and you know that any reasonable person in the parliament should be doing what they can to try to reduce the number of people who smoke. In Australia we are fortunate, because we have made significant progress by adopting good public health measures. We know that advertising is a factor in driving consumption, so restricting promotion in advertising of cigarettes has been very successful. We saw bans on the advertising of tobacco products through organised sport. We know that you cannot have at all broadcast advertisements on TV for tobacco products. So advertising is a significant means of restricting use.

We know that Australia was one of the first countries in the world to introduce plain packaging, and congratulations to the previous Labor government for taking that sensible public health measure. We know the restrictions on the point of sale of those products, where access is another factor that drives consumption. But one of the most effective levers is price. That is why increasing tobacco excise is important as a stand-alone public health measure. We know it is regressive. It can be addressed through the tax and transfer system. We wholeheartedly support the measure. (Time expired)

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

If increasing taxes on cigarettes is a Mr Bill Shorten thought bubble on additional tax, it has to be a bad idea. That should be the end of the debate. We know of Labor's record of taxing and spending. I often relate in this chamber an example of Labor's tax policy and their honesty. I happened to be in the parliament in the days when Mr Keating introduced, before an election that he thought he was going to lose, a tax amendment to reduce income tax. For those who remember back to those days, it was identified as the L-A-W law tax reduction. It went through parliament with the support of the then opposition, which was outside of parliament. No sooner had Mr Keating and Labor won the next election—unexpectedly, I might say—do you know the first legislative action they took? It was to repeal the law that they had passed just a couple of months earlier reducing taxes. So if you ever want an example of how to deal with Labor's promises on taxing and spending, there is a great example.

Of course, I need to go no further than the 2010 election, when Ms Gillard famously promised, as did her then Treasurer, Mr Swan, a week before the election, three days before the election, two days before the election, 'There will be no carbon tax under a government I lead.' Remember that? You would remember that, Senator Polley. 'There will be no carbon tax under a government that I lead.' Let's not have an argument about carbon and emissions and taxes—let's just have a little discussion about honesty. There we are, hand on heart, three days before the 2010 election: 'There will be no carbon tax under a government that I lead.' What was the first piece of legislation that came in when Ms Gillard won the election? It was the introduction of a carbon tax.

People voted for Ms Gillard in that election because they took her at her word. They thought, 'We can comfortably vote for the Labor Party at that election and we will know that a carbon tax is not going to be on the agenda.' So many thousands and thousands of Australians did that on the basis of Ms Gillard's assurance and promise to the electorate. There are just two examples of how people should treat any promise made by the Australian Labor Party in relation to taxes and spending.

I suppose that I should be happy about the commitment from the Labor Party to increase taxes on cigarette smokers. I do not know if this is true, but I read it in the newspapers and people often talk about this, and these articles, newspaper reports and so-called experts tell me that it is principally the lower socioeconomic groups that smoke most. Of course, the amount that someone on a pension or an unemployment benefit might pay for a packet of cigarettes is much more substantial, as a percentage of their income, than it is for someone on $100,000 a year who might pay for a packet of cigarettes. So if I believe what the media say, this will impact on the lower socioeconomic groups, who—again, I do not have the statistics on this, but I think it is fairly well accepted in political science circles—are the principal supporters of the Australian Labor Party in every election. So if they are slugged, as Mr Shorten is proposing, with an additional tax on one of their few pleasures in life, hopefully it may encourage them to think differently about how they might vote at the next election.

It is these people that Mr Shorten's taxation proposal will impact most heavily upon. It is not as if these people are going to stop smoking. I know that many would like to think that if you increase the tax on cigarettes people will stop smoking. But that is not borne out by the figures. You have seen the forward estimates for the take from the tobacco excise on their current levels. This is not any new tax that Mr Shorten is proposing—this is just the increasing revenue from tobacco excise which is in place at the moment, thanks again to Labor, as the tax increases each year with the normal inflation rate. That was Labor's last proposal: we will make it so that when the cost of living goes up so does the excise on cigarettes. Can I tell the Senate that in 2014-15 the tobacco duty is estimated to bring in $8.848 billion. A year later—this is without any increase that Mr Shorten is proposing—in 2015-16 that $8.8-odd billion will go up to $9.150 billion; the following year to $9.7 billion; the following year to $9.9 billion; and in the 2018-19 year to $10.28 billion. Clearly, the increase in revenue and the automatic indexation of the excise is not stopping people from smoking. It is not cutting the amount of cigarettes and tobacco that is smoked; all it is doing currently, with the automatic increase, is increasing the revenue for the government. The idea that increasing the income from tobacco tax will stop smoking and have a health benefit is simply wrong. Certainly, that is not borne out in the material we have.

I have heard the Labor Party introduce five, what they call, 'policies' for the next election, and the tobacco tax is one of them. But all five policies are about increasing tax on someone. In Labor Party, that seems to pass as policy for the alternative government.

Senator Polley interjecting—

And, Senator Polley, you think that is a good idea, I take it, from your interjection—that new policies that increase the taxation of Australians across the board are good. As I understand, Mr Shorten is proposing to bring back another carbon tax and another mining tax. Gee, I hope he does! We might need the votes! But the Australian public have already told you what they think about those ridiculous taxes. The carbon tax did nothing to reduce emissions. Even if it did, Australia is emitting less than 1.4 per cent of the world's emissions of carbon. Even if any increases had stopped that completely, it still would not have made any difference to the world's climate. And, of course, the mining tax—that famous mining tax that Mr Swan introduced—cost more to collect that it collected. These are the sorts of ideas, the thought bubbles, that the Labor Party have and that pass in their minds as policy commitments.

In concluding, I just remind the people of Australian: if you want trust in government, if you want people who understand how to manage the economy, how to reduce taxes and how to reduce wasteful spending, then you have to vote for the coalition.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

It is always a joy to follow on from Senator Macdonald, as we can actually put some facts on the table. Fact number 1 is: each and every year, for Australians that smoke, over 15,000 people die from smoke-related illnesses. The economic and social cost of smoking is estimated at $31.5 billion a year. Labor's plan to continue raising tobacco tax will bring us in line with 33 other countries, help to drive down smoking and save thousands of lives.

When we unveiled our policy last November to continue the existing annual increases in tobacco excise, the Assistant Treasurer dismissed the idea as another tax hike, while the Treasurer said that, when it comes to tax reform, we have a very small and inconsistent appetite and that we are fringe dweller when it comes to the issue of economic change and reform in this country. But last week we welcomed reports that the Turnbull government was set to back our world-leading tobacco policy, which is based evidence based and in line with international best practice.

On Senator Macdonald's contribution about tax, it was not that long ago that those on this side of the chamber and the public said—and it was only because of them—that they would not swallow the 15 per cent GST on everything. The government were all set to increase the GST—that is a fact. That is what they had planned. Also, they said that they would never put taxes on superannuation. Now, they are. The government said they would not support an increase in tobacco tax, but they are now going to do it. The Prime Minister and government said one thing before an election and have done something quite different. We know that Mr Turnbull is very good at having these thought bubbles, but the good thing about them is that most of them do not last from morning to night.

The reality is that the government will do nothing to ensure multinational companies pay their fair amount of tax. They will tax mums and dads, they will make cuts when it comes to family payments, they will attack penalty rates for some of the lowest workers in this country and they will want to introduce, as they already have tried, $100,000 for a university degree. We know that the government have made cuts under an attack on Medicare. That is what the government are about.

This is an important topic—of course, it is—because we as a Labor government introduced plain packaging for cigarettes in this country. In fact, we led the world. So we know the importance of it. It is one of the indicators that we believe will work and go a long way to reduce smoking in this country.

The government has brought the Senate back this week to parliament not to talk about the issues that matter to the Australian community, not to talk about jobs and creating jobs, not to talk about health and the cuts that they have made to hospitals around the country and the cuts that they have made to state governments when it comes to education. The fact is they have backed away from funding Gonski for five and six years, which will have an enormous impact on the children of this country. If funded, which we are committed to doing, it will actually drive the economy going into the future. The Treasurer cannot even communicate with the Prime Minister. They are not even on reasonable terms, but we are supposed to accept the ramblings and waffling on from not only Senate but also the current Prime Minister.

We on this side will do what we believe is in the interests of the country not just in the interest of our own survival. What is happening now is the government are panicking because, all of a sudden, the polls are showing that they are in trouble. If you actually go out and meet the people on the streets, if you listen to them and if you actually meet the constituents in your electorate offices, then you will understand that there is a lot of concern in the community. The concern is that they have been dudded. Malcolm Turnbull told the Australian people that he could do better—that is why he needed to roll Tony Abbot; that is why he knifed Tony Abbott. But the reality is: he is no different. The only thing about Tony Abbott that Malcolm Turnbull is different from is that he wears a better suit. The 2014 budget and all those cuts are still the policies the government will take to the next election. (Time expired)

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

We are here today discussing Senator Leyonhjelm's matter of public importance regarding tobacco taxes in Australia. Senator Leyonhjelm has publicly said that he is opposed to tobacco taxes and that he would fight for people's right to smoke. Smoking is an issue of major concern for Australians. Currently, 12.8 per cent of Australians smoke. This is approximately 2.5 million people. Each year in Australia, tobacco still kills more than 15,000 people, and it has more than $31.5 billion in health and economic costs associated with it. Those 15,000 Australians are fathers, mothers, brothers, sisters, grandparents, aunties and uncles. They are people we all know. They are loved by many, and often, too often, many young people die from the results of smoking.

On a personal note, my father, who died nearly 12 months ago, was a very heavy smoker. He smoked very heavily for sixty years from when he was a young boy. I can tell you that there is nothing more distressing, other than possibly being the person who is doing the coughing up, than watching someone coughing up revolting, awful, black mucousy gunk when they are suffering from emphysema. It was quite awful to watch him, but I am sure it was much worse for him, doing the coughing from emphysema, in his final days. I have to say that I will discourage anybody I can from smoking.

In my home state of Tasmania, we have traditionally had a higher rate of tobacco smoking than most other jurisdictions and Australia as a whole, with the exception of the Northern Territory. Between 2008 and 2012, an average of 502 Tasmanians died each year from tobacco use. The Australian Health Survey in 2011-12 reported that 21.7 per cent of Tasmanians over 18 years of age were estimated to be either daily or occasional smokers compared to a then rate of 18 per cent nationally.

Tobacco consumption continues to have very serious health and economic impacts for individuals, families and the rest of society. The $31.5 billion in economic and social costs is more than triple the amount of the revenue raised by the Commonwealth from tobacco excise, which stood at around $8.3 billion last financial year. To put it another way, taxes on tobacco do not even cover a third of the costs caused by smoking. Senator Leyonhjelm talks about the freedom to smoke. But smoking is not a choice, it is an addiction, and 80 per cent of smokers want to quit. They are sick of the money they waste on cigarettes, they are sick of smelling of tobacco smoke, they are sick of the time they spend away from friends and family to go out for a smoke and unfortunately many are sick from preventable diseases caused by smoking.

Labor understands the importance of acting on this issue and thankfully significant progress has been made. Since 2007-08, the national daily smoking rate has dropped from 19.1 per cent to 12.8 per cent of the Australian adult population. Australia has been a world leader in tobacco control, pioneering measures such as advertising bans and plain packaging that have driven smoking rates to record lows. Our policies are being adopted as best practice internationally. Labor's world-leading plain-packaging reform has had a significant effect on reducing the rates of smoking amongst Australians. I think most people accept plain packaging now. I remember when we were trying to introduce it that the end of the world was nigh, but most people seem to accept it now. We stared down the ferocious legal attacks from big tobacco and this is now inspiring the rest of the world to follow this major advance in public health—for example, Britain and Ireland are now following Australia's lead.

Evidence also suggests that increasing the price of a packet of cigarettes is amongst the most effective ways to decrease rates of smoking, especially for younger Australians. That is why, in government, Labor introduced four 12.5 per cent excise increments from 1 December 2013. Combined with plain packaging measures, these increases will save thousands of Australian lives. The excise and taxation contribution to cigarette costs still remain well below other comparable nations. The World Health Organization considers that raising tobacco taxes to more than 75 per cent of the retail price for tobacco products is amongst the most effective and cost-effective tobacco control interventions. The World Health Organization calculates that Australia's tax contributions were 57 per cent— (Time expired)

Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

We have heard this afternoon that there are some senators in this chamber who are concerned about tobacco taxes taking money out of people's pockets. On the Labor side, we are more concerned about tobacco taking years off people's lives. We heard a quite moving testimony from Senator Bilyk about the very personal cost that came about from tobacco-related disease. Earlier this year, the Labor party proposed an increase in tobacco tax because we believe in putting people's health before tobacco company profits. We know that these taxes will make it more expensive for people to continue smoking. We do not apologise for this. That is, of course, the point. The World Health Organization considers tobacco taxes to be one of the most effective interventions that we can make to get people to stop smoking. Pricing is one of the strongest policy levers we have in helping people to quit. This is especially the case for people who are part of the price-sensitive groups, particularly young people. All of the evidence points to the importance of preventing people from becoming addicted in their early years.

Our tax framework was one part of a broader policy. We put forward a series of excise rates while we were in government, and it was Labor that conceived and executed the plain packaging policy. Tobacco consumption fell approximately 13 per cent in the two years since plain packaging came into effect. While Labor was putting in place innovative policies to cut Australia's smoking rate, the Liberal and National parties were still taking donations from tobacco companies. These, of course, are the very companies that would later commence international arbitration proceedings against the Australian government to try to get the taxpayer to compensate them for their lost tobacco profits. Labor had stopped taking donations from those companies in 2004. The Liberals did not stop until 2013, and the Nationals, it seems, were still taking money as recently as last year.

We were happy to read reports that the government was going to get on board with the Labor policy and perhaps support higher taxes on tobacco. So it was a little bit surprising this afternoon to hear the coalition senators speak against tobacco excise in this debate. It might be that they just did not get the memo, or it might be that this is just another run up to yet another policy backflip on tax from this government. That would be disturbing not just in regard to the merits of the particular issue at stake but also because an increase in tobacco excise is the sum total of tax reform that we have seen from the government so far. We think that tobacco taxes are important. They are important for smokers. They are important for the health system. They are important for the budget. But they are not a comprehensive tax reform plan.

It is said that some people grow into high office. This Prime Minister seems to have shrunk into it. The Prime Minister took office promising economic leadership and, as it turns out, all that this means is refusing to take any tough decisions whatsoever about tax. The Prime Minister promised that everything would be on the table. Instead, he has spent the last nine months taking things off the table. He took the increase to the GST off the table. He flirted with negative gearing and then took that off the table, and he took capital gains tax off the table also. He very briefly had a discussion about double taxation and the role of states in income tax, and that very odd idea had a shorter lifespan than most butterflies do. We were promised a mature discussion, but it turns out that the Prime Minister is incapable of having a discussion with his Treasurer, let alone a discussion with the public or with the parliament.

We would be happy to see the coalition abandon their former corporate donors and support Australian smokers in quitting, and tobacco taxes are a critical part in this. This government has proven to be great at quitting. They have quit following constitutional precedent, they have quit responsible government, and now it seems they have quit tax reform. It might be really good, though, if they could support an increase in tobacco excise and help a few others to quit this horrible habit.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The time allocated for this discussion has expired.