Tuesday, 13 September 2016
Excise Tariff Amendment (Tobacco) Bill 2016, Customs Tariff Amendment (Tobacco) Bill 2016; Second Reading
That all words after 'That' be omitted with a view to substituting the following words:
'whilst not declining to give the bill a second reading, the House condemns the government for failing to implement comprehensive budget measures that are fair and sustainable for Australia.'
Cigarettes are the only legal product which, if consumed as directed, will kill half of their users. They are extremely addictive. Ask smokers if they plan to quit and 92 per cent will say yes. Yet Australia has managed over time to significantly decrease the share of people who smoke. Rates since 1980 have approximately halved, with smoking rates now around 18 per cent for men and 14 per cent for women.
How did we do it? Part of the answer was information. People are more likely today to know that cigarettes cause cancer, and they are more likely to understand the risks of smoking while pregnant and the risks of smoking around children. We have also made available cheaper nicotine patches. Since 2011 patches that previously cost $4 a day have now been available for $1 a day for anyone with a doctor's prescription.
One of the things, too, that has changed smoking rates in Australia is the change in price. Over the past generation the cost of cigarettes after inflation has increased from about 40c a stick to about 70c a stick. Whose behaviour is most changed by that? Well, young people are particularly price responsive. So we have seen a rapid drop in the share of young people taking up smoking. The old days of a bunch of boys getting together behind the toilet block to light up are, thankfully, rarer than they once were. Economists estimate the elasticity is about minus 0.5, meaning that if you increase prices by 10 per cent you will decrease smoking rates by five per cent. Plain packaging also played an important part—a measure which I am proud to say was spearheaded by the Gillard government and ultimately supported by the then coalition opposition.
These changes will have an effect, predominantly, on certain groups in society. We have to recognise that any changes in price affect just smokers, and because smoking rates are higher among disadvantaged groups the effect of price changes will be higher too.
But that means that increasing tobacco excise is a progressive health measure. The smoking rate among people living in disadvantaged areas is 24 per cent, among Indigenous Australians is 47 per cent and among the unemployed it is 38 per cent. And these groups consume more cigarettes than the average smoker. So, as we make changes to tobacco excise, the people whose behaviour is most changed are disadvantaged Australians.
This was brought home to me by one of the most poignant emails I have ever received from a constituent, which read as follows:
My great-grandfather, grandfather, father and one of my uncles all died from smoking-related conditions. Each of the latter three died 20-30 years before the life expectancy for their generation. My father's addiction contributed to two decades of poor health prior to his premature death, resulting in frequent periods where he was unable to work.
My siblings and I grew up in poverty, the effects of which are still evident, and the taxpayer bore the cost of his many hospitalisations as well as the cumulative years of income support our family depended on in lieu of employment. I say this so that you will understand my absence of sympathy for the "principle argument", that tobacco companies have a right to make a profit from pushing legal drugs.
I thought of this constituent when Labor announced that we would increase tobacco excise, because it is people like this constituent and her family who will benefit most.
The beneficiaries will also be those who are around smokers—the one in six babies born to mothers who smoke while pregnant and the children who inhale passive smoke. Making sure that we reduce smoking rates in Australia has benefits that flow out to the broader community.
This bill will be supported by Labor—of course it will, because it was Labor policy to begin with. In November 2015, the shadow Treasurer, Chris Bowen, and the shadow health minister, Catherine King, announced that Labor would, if elected, deliver four 12.5 per cent excise rate increases in government, commencing on 1 July 2017.
In May 2016, in this year's budget, Treasurer Morrison announced exactly the same policy—copying Labor's policy. But while students at school are sometimes aggrieved when their classmates copy their work, we on the Labor side are delighted. We are delighted that the government is copying this area of Labor policy because it is excellent policy. It is a gold-medal-winning, double lay-up, full-on backflip, and we are very pleased to see it.
Why do I say it is a backflip? Well, I remember the assessments of Labor's policy at the time, with the health minister, Susan Ley, describing Labor's policy as:
… a grab for money, it's a political statement and I don't like it.
That was 29 November 2015. The then Assistant Treasurer, Kelly O'Dwyer, described it as:
… another tax take that Labor has proposed.
That was on 9 November 2015.
Treasurer Morrison's assessment of Labor's tax policies were that they showed the opposition as 'fringe dwellers'—that was on 24 November 2015. And the member for Warringah, going back to one of his emptier slogans, described changes to tobacco excise as, 'a workers tax'.
But this change will be a progressive health measure. According to the latest National Drug Strategy household survey, daily smoking is continuing to decline and, as shadow health minister Catherine King has noted, Labor's plain-packaging laws take a portion of the credit for that change.
And so we are delighted on this side of the House that the government has again followed Labor in an antismoking measure. I say 'again', because it took the Liberals nine years after Labor before they ceased accepting tobacco donations. It took the coalition some months before they decided to back plain packaging. And in this instance it took the coalition a full six months to back in our changes to excise on tobacco. But they got there, to the right place, in the end and we are pleased to see that.
I will speak in other debates later about the range of issues on which the government has made a mess of consultation and has engaged in a series of backflips. But for now let me commend the government for finally reaching the right policy. This is a policy which will increase the cost of cigarettes and decrease the smoking rate. There will be lives saved as a result of this policy. We currently lose around 15,000 Australians every year to smoking, and this policy will reduce the number of people who die from smoking—not just smokers themselves but the children who inhale passive smoke and the babies born to mothers who smoke. There will be fewer young kids who take up smoking and Australia will be healthier as a result.
It is Labor policy, and I commend the bill to the House.
The original question was that this bill be now read a second time. To this, the honourable member for Fenner has moved an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment was agreed to. The question now is that the amendment be agreed to.
I rise to join my colleague the member for Fenner in support of the Excise Tariff Amendment (Tobacco) Bill 2016. This is first and foremost a Labor policy and I am very pleased to see that the government have now adopted it, even if they were dragged kicking and screaming to do it. Labor proposed this policy—I think it was in about November last year—because, in line with international best practice, we know that cigarette pricing is a key factor in the reduction of smoking rates. As Tobacco Australia says:
Many smokers and recent ex-smokers report that high prices of tobacco products are a key factor motivating their attempts to quit or cut down smoking.
We were up-front with our decision to continue the existing annual increases in tobacco excises, in using the tax system for reform with purpose—reforms that will see more people give up smoking and fewer kids start. At the same time, these reforms helped with the task of budget repair, but they did not attack our hospitals or education system to do it. Labor were listening to the experts when we proposed this plan last year. 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. And the economic and social costs of smoking are significant. Tobacco kills more than 15,000 people and accounts for more than $31.5 billion in health and economic costs, so the long-term benefits of decreasing the rate of smoking far outweigh the revenue that is collected here. It is quite simply a win-win.
So you can imagine, frankly, the utter surprise on this side of the House when the government completely trashed this plan—a plan which was in line with expert advice and would cut smoking rates. This is what they had to say when Labor announced this policy. The former Assistant Treasurer dismissed the idea as 'another tax take'. The Treasurer said that the opposition were 'fringe dwellers' for our tax policies, this one in particular. More shockingly, this nation's Minister for Health and Aged Care—who is meant to be acting in the health and welfare interests of all Australians—despite the evidence of the impact this measure would have on smoking rates, dismissed the plan on national television, saying that it was a grab for money, a political statement and she did not like it.
In contrast, the experts said that the policy would make a real change because price was an important factor in the decision to smoke. The chief executive of the Cancer Council of Australia said:
Every time you increase the excise consumption goes down. We anticipate if there were four of these recurrent tobacco increases over time, that about 320,000 current smokers would attempt and be likely to quit as a result of all four increases, and about 40,000 teenagers would be deterred from taking up smoking. In the longer term that means tens of thousands of cancer deaths would be prevented.
Make no mistake: this is a massive backflip from this government. Only months after the health minister dismissed the plan as a grab for money, the government's own budget papers said:
One of the most effective ways to discourage smoking is to increase the price of cigarettes. Increases in tobacco excise over the last two decades have contributed to significant declines in the number of people smoking daily.
Of course, on this side of the House we have always known the positive impact government policy can have on tobacco consumption. The proposal of this measure from Labor followed a track record of anti-smoking measures which have had a real impact on the rates of smoking in Australia. We adopted the World Health Organization's national framework to make sure that this country had the best possible policies to get our smoking rates down—and they have worked. Under the previous Labor government, as part of the National Tobacco Strategy, COAG committed to reducing the national adult daily smoking rates to 10 per cent by 2018 and halving the Aboriginal and Torres Strait Islander adult daily smoking rate.
Labor's world-leading anti-smoking measures, from bans on tobacco advertising to graphic health warnings and plain packaging, have seen smoking rates and tobacco consumption plunge over recent years. Tobacco consumption has fallen 16.8 per cent since Labor's plain-packaging laws came into effect. According to the latest National Drug Strategy Household Survey, daily smoking declined significantly between 2010 and 2013, from 15.1 per cent to 12.8 per cent, and the increase to the tobacco excise will ensure that smoking rates continue to decline. Australia has become a global leader, with our plain-packaging laws inspiring the rest of the world to follow our public health lead.
What we are seeing is a rare role reversal for this government. The government are completely divided about their approach to health measures, and their approach to health measures has been chaotic. Labor always said we would welcome the Turnbull government's adoption of our approach to tackling tobacco consumption. We hope they continue this lead and adopt Labor's other measures, which will have a significant impact on Australia's health system, like reversing their hike to medicines, which has seen the most vulnerable and sickest Australians hit every time they fill a prescription; unfreezing the Medicare benefits rebate, which is forcing doctors to reduce and abandon bulk-billing and will see more people presenting to emergency departments; and reversing their cuts to pathology and diagnostic imaging, which are increasing the cost of vital scans and tests. This government, time and time again, have proved that they cannot be trusted with this nation's health. Labor welcome this backflip and we encourage the government to adopt more of our sensible measures to improve the health care of Australians.
Labor are very proud of Australia's record when it comes to the reduction in tobacco consumption in this country. Lives have been saved as a result of those measures. When this policy was announced by Labor, it was regrettable that those on the other side, including this nation's health minister, took the decision to basically say that this was a 'rubbish proposal'. This nation's health minister said that she did not like it. For the nation's health minister to actually make those comments, when this is exactly what the World Health Organization has recommended actually be done—frankly, she should have apologised. She should have apologised to all of the cancer councils, to Tobacco Australia, to all of the people who have been fighting for these measures for such a long period of time.
If this government was serious about reducing tobacco consumption in this country, it would not have cut hundreds of millions of dollars out of the Indigenous smoking cessation program—a program that was working to deal with a cohort in our population whose smoking rates we have struggled to get down. For the first time, we actually saw a decline in the number of teenage Indigenous Australians taking up smoking as a result of that initiative. If this government was serious about real changes to tobacco, they would not allow the National Party to continue to accept donations from big tobacco. Frankly, it is well past time that the National Party ditched accepting donations from big tobacco.
If this government is serious about getting smoking rates down, if it is serious about ensuring that fewer Australians take up smoking in the first place, then that is one of the measures I would suggest would be a very clear signal to big tobacco in this country that their days of influence within this place, their days of influence within this parliament, are well and truly over. This is an important measure, a measure that we do support because it is Labor policy. It will see more Australians give up smoking. It will see fewer teenagers take up smoking in the first place. I commend this measure to the House, and I particularly thank the government for finally seeing some sense and actually adopting a sensible health measure.