A Hike in Tobacco Tax Attracts New Supports

Published on May 26, 2010 6:01 AM

State government declared that voters have greatly approved the new decision to increase the tobacco prices by 25 percent.
Even though a great amount of smokers was against the new cigarettes tax increase, which will increase approximately $5.6 billion over the next four years, but fortunately for the government, because smokers are in the minority.

Researchers found recently that 71 percent of all voters are for the tax increase, which added between $2 and $3 to a pack of cigarettes, whereas only 26 percent were against new tax hike. But among smokers 73 percent opposed the new increase and only 26 percent supported it.

Despite the fact that only 18 percent of the whole population smokes, Labor experts alarmed the tax increase which would hurt the government because smoking is more widespread among lower socio-economic groups which tend to vote Labor.

But recently the election of 1400 voters was about equal with 73 percent of Labor voters and 72 percent of Coalition voters’ endurance the new move. But among non-smokers, there was 81 percent which supported the new tax increase.

Tony Abbott, the Opposition Leader has tagged the move a tax grab but has discharged the Coalition to encouraging it still. The new legislation of increasing tobacco tax will be inserted in the winter session of Parliament.

The Prime Minister, Kevin Rudd, has guaranteed the state revenue increased, together with that already accumulated from tobacco sales which would be only directed to health funding.
In general the tobacco tax is one of three incomes of the government which has proposed to fund tobacco income to health and hospitals that have been negotiated with the states. But the other two revenues are a 33 percent recovery of a sum of money from the states of goods and services taxes (GST) revenue and the means-testing of the private health insurance discount.

However the Coalition opposes both these new measures. The new tax hike will not start until July 1, 2011, but the $7.4 billion in health extras assured that states new tax will be introduced from July 1 this year. There are three parts of new legislation required to enforce the reforms and Mr. Rudd wants them passed before he starts handing out any money.
However researchers concluded that is still possible that the bills would be introduced soon.