Labor signals tobacco tax increase with cigarettes costing $40 by 2020

A packet of cigarettes would cost more than $40 by 2020 under the tax plan released by federal Labor Party today.

The Labor Party argues that increasing the tobacco tax would conform with World Health Organisation recommendations about smokers paying for their habit.

Labor's shadow Health Minister, Catherine King, told Tom Iggulden, it would also mean a healthier budget.

CATHERINE KING: It's estimated it will raise $3.8 billion over the forward estimates, but of course this is a very important step in increasing our efforts to reduce tobacco consumption in this country.

We currently have some 2.5 million people who are still smoking and smoking kills around 15,000 people every year. We know the last time that we had a concerted effort both through excise raises but also through preventative health measures, plain packaging, advertising and putting medications onto the pharmaceutical benefits schemes. We had a dramatic drop in smoking rates and we know we have to continue our efforts if we are going to continue to get those rates down.

TOM IGGULDEN: Labor has been arguing against a potential increase in the GST saying it would hit people on the lower income scale the hardest. Isn't it true that those still left smoking are mostly at that lower income scale. Wouldn't you be hitting the poorest with this idea?

CATHERINE KING: Here's a huge contrast, here you've got the Government wanting to tax fresh food and health services - the things that actually keep us well. What Labor wants to do is try and look at reform with purpose, make sure that we actually with our taxation system are doing things that are productive.

Trying to get reduced smoking rates particularly amongst people who are the poorest in our community, the people who experience higher rates of cardiovascular disease, higher earlier death, who have the higher rates of smoking related cancers, people who experience stroke, trying to assist people in the income brackets to reduce their smoking is actually really important.

TOM IGGULDEN: Do you accept though that this still is a regressive tax, it does still hit people who don't have the disposable income to make other choices?

CATHERINE KING: The purpose of the tax is actually to reduce smoking rates. We know that the World Health Organisation is recommending that you go to a higher rate of excise and you keep ramping up your excise over time and our national tobacco strategy actually says that.

I absolutely acknowledge that people who are on lower incomes who continue to smoke, that this will be a big measure for them, but the measure is designed to try and encourage as many people as we can to stop smoking. We will have some announcements to make about targeted smoking cessation programs to try and help people.

ELEANOR HALL: That's Labor's health spokeswoman Catherine King speaking with Tom Iggulden.

source: http://www.abc.net.au/