David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

I rise to speak on the Excise Tariff Amendment (Tobacco) Bill 2016 and the Customs Tariff Amendment (Tobacco) Bill 2016. When the Liberal Democrats were first established in the ACT in 2001, the very first issue the party campaigned on was the right to choose to smoke. One of the founders of the party actually took up smoking for the duration of the 2001 election campaign. Smoking was not endorsed or recommended. It was all about adults being free to choose for themselves, not treating adults like children.

I did not join the Liberal Democrats until 2005, but the policy remains the same. We do not believe governments have any right to intervene in the choices made by adults, except to prevent harm to themselves. Twelve years later, in other words in 2013, the party received its first donation from a tobacco company—it pays to be patient. You would have to be really imaginative to suggest that our policies were influenced by donation.

I do not smoke cigarettes. I smoke the occasional cigar. I think cigars are a little bit like fine wine. I do not recommend smoking cigarettes, and I fully accept that it would be best if everyone gave it up. But not liking something, not doing it yourself and not recommending it does not give you a licence to prohibit it, tax it or harass those who do it—whether it is smoking, drinking or even eating McDonald's. Government policies towards smoking are characteristic of what is wrong with Australia. We are overgoverned, overtaxed and overregulated. It is true that a lot of people disapprove of smoking, but the correct response to that is: if you don't like it, don't do it. It is not compulsory. If others choose to smoke, unless they are blowing smoke in your face, leave them the hell alone. Unfortunately, we are a long way from that. We are surrounded by people who are troubled by the worrying thought that someone, somewhere may be having a good time.

As a result of the existing tobacco taxes, Australia currently has close to the most expensive cigarettes in the world. With the increase in excise these bills will authorise, we will unquestionably have the most expensive cigarettes in the world. That is nothing to be proud of. A typical pack of 25 branded cigarettes currently costs about $30. Of this, about three-quarters is swallowed up by the government. But, of course, too much is still not enough. As a result of this legislation, smokers will get little change from $40 for a pack, and $32 of that will be tax. The burden of this falls heaviest on our poorest citizens. Smoking is highest amongst low-paid workers, the unemployed and Indigenous peoples. Among prisoners, ex-prisoners and drug users it is well over 50 per cent—some say over 90 per cent. And, I have to add, a vast majority of these people would be Labor voters. Quite a lot of the revenue that the government collects in tobacco taxes is money it has paid to smokers in the form of benefits, including welfare and pensions. Raising tobacco taxes simply increases this churn, leaving poor families with lower standards of living and increasing pressure on the government to increase benefits.

We often hear the assertion that smokers hurt nonsmokers by claiming more than their fair share of government spending. This is simply not true. It is not something to be pleased about but by dying early smokers save the public purse. Smokers receive fewer years of age pension payments and incur lower lifetime public health costs than nonsmokers. A 2008 Dutch study found that, due to differences in life expectancy, lifetime health costs are highest for people with a healthy lifestyle, lower for obese people, and lower still for smokers. Other studies have found similar results. Perhaps we ought to be imposing more tax on running shoes, gyms and health food.

In 2013 smokers imposed net costs on Australia's healthcare system of $318.4 million. Depending on rainfall, smokers also cost the taxpayer roughly $150 million a year in bushfire control. And, yet, the government collects more than $9 billion in tobacco excise each year. Smokers contribute at least 17 times more than they cost the public coffers. Against that, we hear repeatedly the voodoo economics of Collins and Lapsley, who attempt to put a social cost on personal costs such as taking time off work or the grief of family members at illness and death. These are not costs borne by the government. Collins and Lapsley also take no account of the benefits of smoking. Many smokers actually enjoy smoking. These are similarly personal rather than social issues, and a decent economist would not take them seriously—but Collins and Lapsley cannot even get their voodoo economics right. Collins and Lapsley are wrong on so many levels, and yet bureaucrats who should know better use their dodgy data to pursue their nanny state agenda.

In reality, smokers are being used to raise revenue to spend on other things, and the purpose of the high taxes is not really to discourage people from smoking—that has already occurred as much as it is likely to; it is because governments cannot control their spending. Instead, they use disapproval of smoking to justify imposing discriminatory taxes. Even worse, the poor Indigenous prisoners and the mentally ill are paying for spending that is of most benefit to people who are much better off. These two bills, which will pick smokers' pockets, are not just about robbing the poor. They are about robbing the poor to pay the rich. There are lots of examples, but one of the worst is the plan by the government to extend childcare subsidies to people with incomes as high as $300,000 a year.

Another effect of the tax increase will be the continued growth of the illegal tobacco market. This accounts for about 14 per cent of the total tobacco market, as measured by KPMG. The government receives no revenue from the organised crime gangs that run this market and is now missing out on over a billion dollars a year in tobacco excise. That is a billion dollars a year that could go towards helping the genuinely needy, or reducing taxes so that more of the needy can get a job.

Around 13 per cent of the adult population smokes. These two bills increase taxes on them based on nothing more than the fact that they smoke, plus the fact that the ruling class disapproves of smoking, plus the fact that they think they can get away with taxing them more. Perhaps they will get away with it, but if the art of taxation is like the art of plucking a goose, removing the most amount feathers with the least amount of hissing, they are failing. Sooner or later—and I expect it will be sooner rather than later—the hissing will turn into active resistance. I look forward to that day.