Tobacco companies will have to pay an additional $3.3bn in tax over the next four years in a bid to drive up the price of cigarettes and stop Australians smoking.
Health Minister Mark Butler used his speech to the National Press Club in Canberra on Tuesday to announce the government would increase the tobacco excise by 5 per cent over the next three years from September 1.
Described the approach as being aimed at “knocking out the market” rather than blaming customers themselves, Mr Butler said the government was determined not to see the price of cigarettes become more attractive.
“The excise stopped increasing in about 2020 and since that time, excise increases have actually started to lag inflation, particularly last year,” he said.
Along with the excise hike, the commonwealth will also start taxing tobacco products such as roll-your-own tobacco and manufactured cigarettes uniformly.
Together, the reforms are forecast to raise an additional $3.3bn over the next four years including $290m worth of GST payments to the states and territories.
Some of these savings will be reinvested in lung disease prevention in the Albanese government’s first full federal budget, which will be handed down next Tuesday.
The federal government will invest $260m of the money it saves into a new national lung cancer screening program, which Mr Butler said would prevent more than 4000 deaths caused by the disease.
At risk Australians — including former vapers as well as former cigarette smokers — will be able to get a lung scan every two years, as recommended by the independent Medical Services Advisory Committee.
Additionally, $240m will be set aside for measures to address lung cancer in Indigenous people, with funding promised to ensure mainstream cancer services are “culturally safe and accessible” and to bolster Aboriginal community controlled health services.
Mr Butler said state and territory health ministers had made a “unanimous” commitment to work together on vaping and tobacco control at their meeting on Monday.
However, he said the government had no plans “at this stage” to ban or phase out cigarette smoking based on birth year.
More to come
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