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article imageOp-Ed: Australia- $20 a packet of cigs and $3 billion in extra tax? How?

By Paul Wallis     Apr 13, 2010 in Health
The latest option to pay for health reform in Australia is to raise $3 billion a year in extra cigarette tax to pay for health reform. Numbers and smoking stats don’t add up. There enough smokers, according to the government’s own figures.
Somebody’s going to have to learn to do basic arithmetic in this country. There are about 2-3 million smokers in Australia. Excise gets a large whack of the price of a packet, which is about $10-ish at the moment. The number of smokers has reduced over time by a vague percentage to an unspecified number.
So raising that $3 billion isn't likely to be easy. $20 a packet, which, for the record, business bunnies, has to relate to actual cash, and means reduced spending. It’ll pull $3 billion out of retail, if it works.
So this idea also has to relate to a reducing number of people spending more money they quite probably don’t have.
And this is how we pay for health reform?
This is how we do a budget?
The idea is that the Federal government will take over health from the states, which can’t handle it anyway, and have been proving it with long waiting lists. This was the result of the 80s “cut all services” approach, and it turned an efficient health system into something which barely deserves to be described as a managed sector. The sheer inefficiency of cutting hospital beds and allowing costs to blow out did the rest.
Australia’s zealous anti tobacco approach is a sight in itself.
According to ads around Sydney, and on the Quit site, cigarettes contain:
Urethane, Ammonia, carbon monoxide, arsenic, insecticides and polynucleararomatic hydrocarbons. Other ads include rat poison, etc.
Well, you don’t say… and there’s some sort of health problem, too? The additives to tobacco are well known. But nothing happens in terms of cigarettes Any other consumer product containing these things would be removed from the market. It’s perfectly possible to grow tobacco without additives. It was only in the 20th century that industrial clowns started adding these things. Incidence of disease barely rated a mention in earlier times. The fact that the air is full of fumes which are very similar to the additives of course also hasn’t rated a mention. This is the most polluted time in human history, and apparently epidemiology hasn’t been asked about these things.
(Carbon monoxide, incidentally, can come from burning a piece of paper or anything else with carbon in it. It’s literally simple oxidized carbon.)
Smoking stats are also interesting, particularly in terms of revenue. According to figures numbers are now reducing. Meaning that $3 billion is going to take a lot longer than a year to get to Treasury.
Black market tobacco is also cranking up a healthy $600 million a year, at current prices. A billion dollar industry is just a matter of a vote in the House and Senate.
Sounding like finding facts and figures that agree is a bit difficult? You couldn't do a basic trial balance like this, let alone a national budget. There are several reasons for that:
1. The advertising industry is doing quite nicely with all the quit smoking campaigns. This gravy train’s been rolling for decades, and it’s huge money, enough to pay for something, if anyone thinks of that.
2. Rhetoric is easier for politicians. “A bright future for our children, and our children’s children…” and presumably their psychotherapists.
3. Budgets work on bigger numbers, not smaller. Obviously nobody’s bothered to check anything, because the anti tobacco industry keeps pitching for more money.
This idea has no hope of actually working in dollar terms. The current problem is that there’s a hole in the budget for the takeover. It's more likely some PR idiot came up with this than any revenue expert.
More seriously, the apparent lack of even basic comprehension of issues related to revenue created this mess in the first place. The cause of the health system's problems was severe underfunding, and getting rid of thousands of hospital beds, which crippled intake. This is more of the same. That anyone’s taking this absurd proposition seriously may mean that we need more kindergarten teachers, but:
1. This idea looks more like desperation than fact.
2. It doesn’t mean anyone’s found a way of funding health reform, either.
3. The money doesn’t exist, even in theory. It’s nominal revenue, based on thin air. Someone actually has to pay for it, for it to work.
This is such stupid concept that I’m hoping it’s just a rumor. If it’s real, it will fail, and it’ll put a huge hole in the budget.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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