Andrew Southcott (Boothby, Liberal Party) Share this | Hansard source

The previous speaker seemed to be channelling the former health minister and former Attorney-General, talking about 'kick the habit'. What he neglected to say is that, after the Labor Party publicly declared that they would stop taking donations from tobacco companies, they were caught out soliciting a donation from Philip Morris. That is the Labor Party: say one thing and do another.

The Excise Tariff Amendment (Tobacco) Bill 2014 is very simple. It involves increasing the tobacco excise by 12½ per cent per year over four years on 1 December each year—2013, 2014, 2015 and 2016. It also involves the indexation adjustment which happens on 1 March and 1 September being done at average weekly earnings rather than at the CPI. I think this is a welcome piece of legislation and it really does address what we need to look at in terms of further decreasing the smoking rates in our community.

When you look at Australia's track record on tobacco control over the last 30 years you see that we have been very successful. We have seen reductions in smoking rates amongst men and women of the order of 40 to 44 per cent. Very few countries in the OECD have seen such a dramatic fall in their smoking rates. It is not necessarily one way. If you look at Europe you see that smoking rates amongst women have increased. In countries like France and Germany smoking rates have increased amongst women; and, in countries like Greece, they have increased dramatically amongst women. There does need to be a concerted effort made to see these smoking rates come down.

The Preventative Health Taskforce of the previous government reported to the government, and one of their key recommendations in this area was to make tobacco products significantly more expensive. All of the evidence shows that if you increase the cost of tobacco you see fewer people take up smoking to begin with and you see a reduction in the amount people smoke. To quote from the government response to the Preventative Health Taskforce:

Price increases encourage existing smokers to quit and raise the barrier for people considering taking up smoking, especially young people.

All the evidence shows that. In terms of reducing the smoking rates further—and COAG has a goal of a 10 per cent smoking rate by 2018—this will be an important measure.

Going back a little bit, in 2008 a packet of 30 cigarettes cost $13.50 in Sydney, and that was quite a low price by international standards. I do recognise that different jurisdictions have city taxes and so on, but it was still a low price. Using the example of a pack of 25 Winfield cigarettes, which had a retail price of $18.80 before the 1 December 2013 increase, under this legislation the price will go up to $21.26 on 1 September this year, $23.43 on 1 September 2015 and $25.96 on 1 September 2016. This should have a significant impact on reducing smoking rates.

When the Preventative Health Taskforce were talking about increasing the price of a pack of cigarettes from $13.50 to $20, they thought that the excise increase on its own would reduce tobacco consumption by six per cent and the number of smokers by two to three per cent and that 87,000 Australians would give up smoking. This is something that has wide support in the community. A 2007 Australian Institute of Health and Welfare survey found that two-thirds of Australians support increasing the tax on tobacco to discourage smoking. So, in terms of all of Labor's tax grabs, this was a virtuous tax grab. They cannot resist their instinct to make a grab for cash and to increase taxes, but this was a virtuous one, and in opposition we suggested similar things.

I want to touch on the issue of illicit trade in tobacco, because it is an important public health issue. The Preventative Health Taskforce touched on this and recommended that the government 'develop and implement a coordinated national strategy to prevent the emergence of illicit trade' in tobacco in Australia. I think it is often the case that health bureaucrats dismiss this as being something that is raised by tobacco companies. It is not; it is a serious issue. The National Drug Strategy Household Survey estimated that illicit tobacco was smoked regularly by 4.6 per cent of smokers in 2010. A KPMG report had the percentage as high as 13 per cent.

If we look at tobacco detections, we see an increasing number of cigarettes being seized by the Australian Customs and Border Protection Service. In 2010-11, 82 million sticks were seized, which was potentially $135 million in duty evaded. In the next year, 141 million sticks were seized with a potential $125 million in duty evaded. In the most recent year that I have figures for, 2012-13, 200 million sticks were seized with a potential $151 million in duty evaded. So it is a serious issue and it needs attention. One of the suggestions that we had in opposition was to look at a track-and-trace scheme in the Australian context. Australia is generally seen as a country which has a fairly low rate of illicit and counterfeit tobacco, but I think it is important, as it is a significant public health measure, that we continue to make sure that that avenue, which is a way of having cheaper tobacco, is really cut out.

The WHO Framework Convention on Tobacco Control explicitly recognises illicit tobacco as a public health concern. As I said before, the tobacco companies raise this issue, and I think that is one of the reasons that illicit tobacco gets dismissed. The previous government focused a lot on plain packaging, but they really missed the boat on illicit tobacco. The WHO Framework Convention Tobacco Control was signed during the period of the Howard government, and there are a number of parts of that framework that look at implementing a track-and-trace regime for tobacco products and strengthening the legislation against illicit trade in tobacco—and I think that is something that does need more attention. Article 15 and article 20 of the WHO framework recommend a track-and-trace scheme—something that the previous government in their six years were inactive on.

The draft protocol to eliminate illicit trade in tobacco products, published by the WHO, states that the obligations of each party to the FCTC 'shall not be performed by or delegated to the tobacco industry'. In other words, if you have a track-and-trace scheme it needs to be a neutral scheme. Unfortunately, the previous government, with their plain packaging, decided that the alphanumeric code markings could be used by tobacco companies on a voluntary basis. In opposition, when we considered plain packaging, we called on the government to look at a neutral track-and-trace system for tobacco products—a scheme that could be managed by the Australian Customs and Border Protection Service in conjunction with the Australian Taxation Office. When the House of Representatives Standing Committee on Health and Ageing looked at the plain packaging bills, they noted that there were 'a range of sophisticated anti-counterfeiting measures which could be adopted'.

In welcoming this bill, there are two points to be made. The first point is that an increase in the price of tobacco will have an impact on reducing our smoking rates and reducing the amount of tobacco that is consumed in Australia—and that will benefit our health in the long term. The second point to make is that illicit tobacco is a serious public health issue and the government really need to look at how they can best address this. Legislation is not by itself enough. Many countries that have strong records, similar to Australia—low-smoking countries—have implemented track-and-trace systems, and I think this is something that the government needs to act on.

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