Australian smokers are now paying 20 per cent of the national health bill out of their own pockets thanks to hefty tobacco taxes.
The 2018-19 Federal Budget has revealed revenue from tobacco excise and customs duties will rise to a whopping $17billion by next year.
While the number of smokers nationwide has dropped to 14 per cent, that minority are responsible for an ever-increasing proportion of the country’s tax revenue.
Australian smokers are paying 20 per cent of the national health bill out of their own pockets thanks to hefty tobacco taxes (stock image)
The number of daily smokers nationwide has dropped to 14 per cent, but that minority are being slugged by skyrocketing tobacco excise hikes (pictured is an Australian cigarette pack)
The 2018-19 Federal Budget has revealed revenue from tobacco excise and customs duties will rise to a whopping $17billion by next year (stock image)
Spending on health during the 2019-20 financial year is expected to hit $80billion, with 21.25 per cent of that money coming from taxes paid on tobacco.
Federal revenue earned from tobacco products has risen from $5billion in 2001 to a predicted $17billion in 2019, making up 3.6 per cent of total government revenue.
This year’s budget saw no change in the 12.5 per cent excise increases which have been in place since 2013.
Smokers will be stung next on September 1, when they are slugged by the second of four consecutive 12.5 per cent tobacco excise hikes.
The rivers of tobacco excise gold started flowing after Scott Morrison (pictured, left, with Malcolm Turnbull) penciled hefty excise increases into his first Budget three years ago
The tax hike is expected to result in a price increase of about $3 for a typical packet. Last year, the price of 30 Winfield Blues jumped $2.70, from $32.50 to $35.20.
Smokers are more likely to be from socio-economically disadvantaged groups, yet they contribute heavily to the national health bill in tobacco taxes.
In 2015 more than one in five people living in the country’s most disadvantaged areas smoked daily, compared with 8 per cent in the richest areas.
The economic and social – including health – costs of smoking was estimated to be $31.5billion in 2004-05, according to the Australian Institute of Health and Welfare.
Since then smoking patterns have changed substantially, and more recent data in needed to inform policy evaluations, the AIHW said.
Smoking was the leading risk factor contributing to disease and death in 2011, making up nine per cent of the disease and injury burden.
An estimated 15,000 Australians die every year due to smoking, according to a 2008 study cited by the AIHW.
Liberal Democrat Senator David Leyonhjelm told Daily Mail Australia ‘practically everyone’ should thank smokers for their contribution to the Budget bottom line.
‘(It’s) not just Scott Morrison but everyone who uses hospitals and schools and practically everyone else should be thanking smokers,’ he claimed.
The excise is not the only tobacco-related measure the Treasurer is using to get the Budget back in black.
‘(It’s) not just Scott Morrison but everyone who uses hospitals and schools and practically everyone else should be thanking smokers,’ said Senator David Leyonhjelm
Mr Morrison announced the government will crack down on organised crime groups importing cheap, illegal tobacco, often known as ‘chop chop’.
The government is forming a task force dedicated to foiling illegal tobacco smuggling and the tax office will be given new powers to detect and destroy illegal crops in Australia.
The Treasurer claims the effort will bring more than $3.6 billion into the government’s coffers.
Mr Leyonhjelm, a self-described libertarian, said the black market had only boomed in Australia in the first place thanks to the high cost of legal tobacco.
He cast doubt on whether the money would ever arrive, arguing the government would need to both defeat illegal tobacco smugglers and drive their customers back into the legal market.
Beer and spirit excise duties are also fuelling the forthcoming Budget surplus
‘The assumption they’re making is all the smokers who currently smoke illicit tobacco will go back to smoking legal stuff, even though it’s 2, 3, 4 times the price,’ Mr Leyonhjelm said.
If the funds don’t arrive, there will be no surplus, he argued. Mr Leyonhjelm’s party has previously received donations from tobacco giant Philip Morris.
Two thirds of smokers will live shorter lives because of their habit, national health figures state.
Meantime, beer and spirit drinkers and car owners are also doing their bit to help get the Budget into the black.
Beer, spirits and petrol excise and customs duties will slightly increase year on year over the forward estimates.
Small increases in petrol excise are also contributing to the future Budget surpluses