Katy Gallagher (ACT, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the Excise Tariff Amendment (Tobacco) Bill 2016 and the Customs Tariff Amendment (Tobacco) Bill 2016. Tobacco consumption continues to have serious health and economic impacts for individuals, their families and society. It is something that is important to me, and I am pleased that this government has come to be on the same page as Labor in introducing this legislation that will hopefully see more people quit smoking or not take up the habit in the first place.

I should say at the beginning that there are no safe levels of consumption of tobacco products. Tobacco is highly addictive, it is harmful to an individual's health and it imposes a major economic cost on our health system. But this can be addressed with the right focus from government. The harms from smoking are well documented and, while smoking trends are decreasing, we cannot take our eye off the ball as policymakers and stop implementing strategies to make this trend continue.

Each year in Australia tobacco kills more than 15,000 people and has more than $31.5 billion in health and economic costs. In the most recent survey of the burden of disease in Australia, tobacco was the risk factor responsible for the greatest disease burden. Annually, over 750,000 hospital bed days are attributable to tobacco related disease. A 2008 study found that the cost of tobacco, alcohol and illicit drug abuse to Australian society in 2004-05—that is the most recent major study which seeks to quantify the social and economic costs of tobacco use in Australia. The study estimates that the tangible and intangible social costs of tobacco use amounted to $31.5 billion, which includes $5.7 billion attributed to absenteeism and a reduction in the workforce.

The costs of smoking also continue to weigh down on the economy and on the budget through its adverse health effects and associated costs to the healthcare system. These bills increase the rates of excise and excise-equivalent customs duty on tobacco. There are four annual increases in duty of 12.5 per cent each, commencing on 1 September 2017. The objective of these bills is to improve the health of Australians by reducing their exposure to tobacco products. The increases ensure that average cigarette prices are more closely aligned with the World Health Organization's recommendation concerning the proportion that excise and excise-equivalent customs duty should comprise of the price of a cigarette.

Labor welcomes the government adopting our policy to improve health outcomes for Australians. Labor is the party with a proud history of tackling tobacco. Under the previous Labor government, as part of the National Tobacco Strategy, COAG committed to reduce the national adult daily smoking rate to 10 per cent by 2018 and halve the Aboriginal and Torres Strait Islander adult daily smoking rate from 47.7 per cent in 2008. Significant progress has been made towards these targets. In 2007-08 the baseline in the agreement was a national daily smoking rate of 19.1 per cent of the population. Now it has come down to 12.8 per cent of Australian adults who smoke on a daily basis.

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 and our policies being adopted as best practice internationally. Labor 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. Tobacco consumption has fallen 16.8 per cent in the almost three years 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 2014—from 15.1 per cent to 12.8 per cent.

Evidence 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. This is why when in government Labor introduced four 12.5 per cent excise increments from 1 December 2013. Combined with the plain-packaging measures these increases will save thousands of Australian lives.

I was a proud champion of law reform to reduce the incidence of smoking in our community before I took up my role in this place. It was the ACT Labor government that banned smoking in enclosed public places in 2003. We were also the first to ban smoking in pubs and clubs with enclosed spaces some years later when I was the health minister. One of the achievements I was most proud of in my time as health minister was the ban on smoking in vehicles with children under the age of 16. I should also note that the ACT, South Australia and Tasmania are the only Australian jurisdictions to have banned smoking in all enclosed areas of casinos, including high-roller rooms.

I know firsthand that changing the law in this area is not easy and often faces fierce resistance from a range of players in our community, including those who are smokers themselves; however, it is crucial that if we are to see a generation of people who do not smoke and do not suffer from the associated health issues that come as a result of smoking, we need to push ahead and make the tough decisions that will make our country a healthier one down the track.

We on this side of the chamber are very pleased that the government has adopted Labor's policy which we announced and took to the election. In November 2015, shadow Treasurer Chris Bowen and shadow health minister Catherine King announced Labor would, if elected, deliver four 12.5 per cent excise rate increases in government commencing on 1 July 2017, which would reduce tobacco consumption while bringing Australia in line with world's best practice when it comes to taxing cigarettes. It is worth reflecting on what members of the government said at the time we announced this very responsible position. At the time, Scott Morrison's initial assessment was that they showed the opposition were 'fringe dwellers'. Health minister Sussan Ley initially described Labor's policy as 'a grab for money' and said, 'It's a political statement and I don't like it.' The then Assistant Treasurer, Kelly O'Dwyer, described it as 'another tax take' by Labor. Tony Abbott described the cigarette excise as a 'worker's tax'.

These ill-informed statements are in stark contrast to what the experts said at the same time. Those with expert knowledge said that 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.

The government's backflip is welcomed and, while these kneejerk comments from senior members of the Turnbull government are regrettable, we can apply the cliched phrase of 'better late than never' to the government's final position. The government eventually saw the wisdom of Labor's approach and announced an increase in the tobacco excise in the 2016-17 budget. In May 2016, Treasurer Scott Morrison announced the budget provided for an annual increase in tobacco excise and the excise equivalent customs duties of 12½ per cent on 1 September of each year from 2017 to 2020.

Labor welcomes the government's change of position in this area. In fact, we would encourage the government to follow Labor's policy lead in a range of other areas as well. This would not only support well-designed policies but it may also provide a way through the chronic internal divisions that are currently crippling this government. Three other Labor policies which the government may wish to consider are: superannuation; negative gearing and capital gains tax; and closing the loopholes in multinational taxation. These are very sensible, well considered policies which would ultimately assist with budget repair.

Labor supports these bills. We are pleased that the government has adopted Labor's policy and we are optimistic that this legislation will continue to build on Labor's proud record of law reform when it comes to consumption of tobacco products. We also encourage the government to consider our other policies that will not only make our country fairer but also contribute to significant budget repair. I commend the bills to the chamber.