12 May 2010


  • The Government increased the excise duty on tobacco products on and from 30 April by 25%.  The measure increases revenue by $5.5b over the 5 years 2009-10 to 2013-14.  It is estimated that it will cut tobacco consumption by six per cent and cut the number of smokers by two to three per cent (equal to 87,000 Australians);
  • When put together with the $2.1b of health savings measures, the net effect is to fully fund the $7.3b committed to the NHHN over the five year budget timespan;
  • From the extra revenue of $5.5b, the Government could spare just $27.8m extra for anti-smoking campaigns and $2.6m for the implementation of plain packaging of tobacco products;
  • From a health prevention perspective, a performance indicator for this initiative could have been no increase in revenue notwithstanding the higher rate of tax.  A larger impact on demand for tobacco products is needed to address the very high health system costs of tobacco addiction;
  • In this Budget the Government was not tempted to adopt volumetric taxation of alcohol products in a parallel health prevention measure.  Health prevention is hard work when it involves taking on powerful vested interests.