Richard Di Natale (Victoria, Australian Greens) Share this | Hansard source

I rise to speak today in support of the Excise Tariff Amendment (Tobacco) Bill 2016 and the Customs Tariff Amendment (Tobacco) Bill 2016—the legislation to increase the excise on tobacco by 12.5 per cent per year for four years from September 2017. Most people know that smoking is harmful. The statistics are actually quite alarming and, when you sit down and reflect on those, you understand the public policy imperative to try and drive down smoking rates. We know that cigarettes kill one in two regular users—that is: half of all smokers die as a result of their habit. We know that smoking is estimated to account for at least 20 per cent of all cancers in Australia, and it is the cause of approximately 15,000 fully preventable deaths in Australia each year. Smoking is responsible for about $30 billion in social and economic costs each year, which is a huge burden on the health system and, clearly, on the economy more generally.

We know that if tobacco as a product were to come onto the market today and an attempt were to be made to license it for use, it would fail. An attempt to get a licence to sell a product that kills one in two of its regular users is something that no regulator would contemplate. It is a harmful product and, for that reason, governments consistently, right across the world, have tried to implement public policies that drive down smoking rates.

If you look at the success of the different measures that help drive down smoking rates in public health, there are a range of things that we know have worked across a range of areas. We know that promotion is important and that restricting the promotion of products that are harmful has an important role to play. It is why, many years ago, there were strict limits placed on advertising, whether through electronic or print media, and so on. We know that availability is also an issue—we do not make cigarettes available at the front counters of shops but have them behind registers and available only to people of a certain age. And, most recently, on packaging, when it comes to smoking, we were trailblazers. We were the world's first plain-packaging country, with legislation in 2012, and, since the introduction of that measure, we have seen smoking rates fall by about 11 per cent.

So there are a range of public health measures that we know work: measures on promotion, availability, packaging—they are all effective public health tools that can be used to drive down consumption. But price is also an important factor. Price is, clearly, one of the most effective tools for helping drive down consumption. You can deter people from smoking by raising excise, and we know that, every time excise on tobacco is raised, smoking rates fall. If we continue to use this as an intervention, we know that the impact will be that we will save the lives of people who would otherwise have taken up the habit or of people who smoke and will cease to do that as a result of increases in price.

That raises a number of questions around that particular policy lever. What is the role of taxation in society? We know that one of the roles is to address huge issues like income inequality via redistribution. One of the reasons that we levy taxes is to redistribute income so that we can do something about issues like income inequality.

We know that, sometimes, we need to levy taxes to try to address externalities. We have seen that in a number of areas. We have seen Australia adopt carbon pricing legislation in an attempt to effectively put a price on an externality to ensure that that externality was dealt with by the source of that pollution. Sometimes those two things come up against each other. So, when it comes to the taxes sometimes called behavioural taxes or Pigouvian taxes, we see that they can have negative distributional impacts, and that is certainly the case with issues like tobacco excise. If you raise the excise on tobacco, the people on whom it will impact most are people on low incomes, who tend to have higher rates of smoking but are also most susceptible to those increases in prices.

So raising excise cannot be seen in isolation. It needs to be seen within our broader system of tax and transfers. If we are going to levy taxes, like an increase in tobacco excise, then we also need to be dealing with issues like rising inequality through addressing the tax and transfer system.

That is why today's announcement from the government—with the support of the Labor Party—that they will seek to increase the burden on the most vulnerable people in society cuts right across a measure like this, because, when you are going to introduce effective taxation measures, when it comes to restricting particular forms of behaviour, the measures have to be coupled with addressing the distributional impact of those taxes. So we are very disappointed that, on a day when we are debating an increase in the tobacco excise, we are also talking about reducing support for some of the most vulnerable families in Australia.

These issues need to be seen in totality. If we do this properly—if we address the issues of inequality and the negative impacts of policies like an attack on the vulnerable through removing the clean energy supplement or, indeed, restricting access to family tax benefits—it should not be limited to tobacco excise. For example, during the most recent election campaign, the Greens announced a policy on sugar sweetened beverages. We did that because sugar sweetened beverages account for 20 per cent of the added sugar intake for all Australians and up to 30 per cent of those Australians between the ages of 14 and 30.

So, if you have got an effective public health system, you need to engage with prevention and you need to adopt those measures that are based in sound evidence. Using price as a measure to reduce harmful behaviours can be very effective in reducing chronic diseases, in reducing ill health and in reducing avoidable hospital admissions. Of course, if you do that, along with addressing issues like inequality through the tax and transfer system, you have a system that is working to improve the health of Australians while still providing people with the choice to engage in those behaviours if they see fit to do so, but you are doing everything you can as a society to limit the harms on the individual and the costs on society, and addressing those externalities by redirecting that funding to our health system.

When it comes to issues like sugar sweetened beverages, we know that a price increase of 20 per cent on sugar sweetened drinks, or about 20c on a can of cola, will result in a 12 per cent drop in consumption, which is even higher if you talk about people who consume a lot of the stuff. So, again, we think that this is an effective measure relating to sugar sweetened beverages. It has been modelled to reduce the rate of obesity in this country and it has been modelled to show a demonstrable decrease in the incidence of diseases like diabetes and heart disease. It is something that has been recommended by the World Health Organization as a key measure to reduce obesity rates.

Just like big tobacco has fought the rise of an excise on cigarettes every step of the way, we know that big junk food will continue to do the same. The point here is that the companies who resist these measures most are the ones who benefit from the consumption and increased consumption of these harmful products, and our job in this parliament is to stand up for the interests of the community, and not to do the bidding of big industry.

It also is related to the issues of donations reform, something that we have spent a lot of time discussing in this parliament over recent days. It is no surprise that as restrictions on donations from the tobacco industry to political parties began to take effect we started to see the parliament act to adopt measures that would restrict or limit the number of people who take up smoking. And that is why donations reform is so critical; we need to address the influence of some of those big, vested interests, when it comes to issues like junk food and alcohol, so that we can get public policy in the national interest.

Alcohol is another product which we know is consumed by many Australians. Many Australians enjoy the occasional drink, but we also know that price is a very important influence on the consumption, and particularly the harmful consumption, of alcoholic beverages. Again, it is classic public health; when we look at issues around price, promotion and availability, the consumption of alcohol is related very directly to each of those individual areas. In terms of promotion, we still allow the promotion of alcoholic beverages to young people through, for example, broadcasts of sporting programs, and we need to do much more in that area.

When it comes to the consumption of alcohol, there has been a lot of discussion around a floor price, or indeed a volumetric tax, so that the taxation of alcoholic products is based on the volume of alcohol in each of those products. Again, we know that when you do that you start to get a much more rational distribution around the consumption of alcohol and you reduce harms. So the principle here is one that is very, very clear and one that the Greens support.

Let's acknowledge that, when it comes to those products that have the potential to cause harm to the individual or those products that have the potential to cause harm more broadly within the community, and where those harms are often imposing costs on our health system, we have a responsibility to address those harms by using the effective public health tools that we have in front of us, including the issue of price as a way of taxing those externalities and paying for the services that the consumption of those products often leads to—that is, within that health system.

I will conclude by saying that I do welcome the government's acknowledgment that in taxing tobacco we can have a positive impact on people's health and the choices that they make. I also have to express at least a note of cynicism. It seems that this government's motives are driven less by their concern around the health of individuals and more around balancing the budget and knowing that this was a measure that would have the support of the parliament. Nonetheless, it is an important measure.

We Greens are very committed to the fight to drive down the rates of smoking. We also want to see the government show some leadership and follow the evidence in setting a price signal not just on tobacco but on sugary drinks and alcohol—and recognising that pricing harmful products has a very important role to play in reducing harms in our community.