Every cigarette might be doing you damage but over the past few years it hasn’t been hurting Treasury. Smoking was already a ludicrously expensive pursuit by world standards in this country before the straight-laced uber-nerd Kevin Rudd and his nanny-in-chief Nicola Roxon were elected at the end of 2007.

By the beginning of last year, barely two years into Rudd’s brief and clean-living reign as prime minister, the price of a packet of smokes had jumped by more than one-third, with a one-off 25 per cent increase last February adding another $2.16 to a packet of 30 cigarettes.
Smokers fume, splutter and wheeze indignantly about this price-gouging and in my darker moments at the 7-11 as I empty the ATM to fuel my habit, I’ve often found myself among their number. No-one else cares of course. When it comes to public sympathy, smokers are on a hiding to nothing asking for understanding.
The Government knows this and can tax us as much as it likes, knowing there will be no backlash from the wider community.
But the extent of the increases since 2007 has begged the question – who is more addicted to tobacco, the (literally) poor smoker, or Wayne Swan and his Treasury secretary Ken Henry?
The extent of the price increases has been so massive that Australia may well have smoked itself out of the global financial crisis. It often feels that way at the end of a boozy evening when those filthy social smokers have crawled out of the woodwork and cleaned you out, prompting you to buy another packet and go without food for the next two days.
It’s not dissimilar from gaming revenue. One of the reasons State Governments have been so slow to bring in genuinely draconian and behaviour-changing regulations covering poker machines is that they themselves are the worst pokie addicts of all. In the space of two decades many of our State Governments have become almost as dependent on tax revenue from gaming as they once were on property taxes.
It’s because of all this that there is an absolute conviction among smokers that the tax generated by our habit far outweighs the burden we place on public services. It pains me to admit it as a smoker, but even with the price increases, it simply isn’t true. The tobacco industry, with its shady PR types who specialise in covert marketing strategies and deep background briefings, has made a habit of slicing and dicing available data to make smokers look like the unsung heroes of the national economy.
Even with the Rudd Government’s tax increases, the argument doesn’t stack up. All the mainstream health data I’ve seen shows that the tax revenue generated by smokes does not match the burden we place on public hospitals, the days lost to work through smoking-related illness, the fact that smokers on average shave a significant five to 10 years off their life expectancy, and unlike the clean-living majority pay no taxes during that non-working dead period of what would otherwise have been their lives.
Despite the embarrassing fact that we smokers are little more than maladjusted drains on the public purse, it has been all one-way traffic in terms of the tax take under the Labor Government. Until now.
As of next year, nicotine patches will be listed on the pharmaceutical benefits scheme, taking their cost from a hefty $160 a month to just $5 a month. There’s a bit of class war in the way it’s being structured – affluent smokers, if indeed there are any given how much the damn things cost, will not be eligible, with the saving only extended to concession card-holders. But given that smoking is more predominantly a working class pursuit, it’s a fair measure.
At least you’d think it is. “Taxes Up in Smoke – You pay for nicotine patches to help addicts kick the habit” was the page one headline in yesterday’s Daily Telegraph. My favourite word in that thundering sentence was “addicts”, as it likens us to low junkies who might break in and steal your plasma television to fund our habit. Actually, if the prices keep going the way they are, it might not be a bad idea.
But the headline and the talkback and online debate elsewhere showed that smokers are damned if they do and damned if they don’t. Clearly a lot of people won’t ever quit unless smoking is banned outright or smokes cost $100 a pack.
If the Government can find $320 million through the PBS to help several thousand people kick the habit, the returns to treasury will be significant, through the reduced burden the one-lunged, capillary-challenged, the footless and fingerless will place on the health system.
The amount of extra tax revenue might not cover the total burden we place on the health system but it easily covers this cost to the PBS. Last year’s 25 per cent increase raised an extra $5 billion over four years, with the promise being that the money would be put back into hospitals and health programs.
The PBS leg-up for the nicotine addicted fits squarely in that category of spending and is just over 5 per cent of the $5 billion tax grab.
My humble plea to the smug non-smokers would be that you please don’t begrudge us the cash. For those of us without concession cards, there is always the New Year and while you should never admit these things publicly, a friend of mine who is also a tobacco enthusiast and I have picked January 8 as the date.
If you happen to see us around that time, don’t even think about asking how the quitting is going. The answer is FINE AND THANK YOU SO FARKEN MUCH FOR YOUR INQUIRY.
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