Source: The Australian, Wednesday 31 May, 1995, p.4
WHY do governments continue to stiff smokers? Because they can and because modern society's pariahs will apparently even cut out "luxuries" such as food to maintain their habit. Every time they light up, smokers will effectively send Messrs Keating, Carr, Kennett, Goss, Court, Brown et al 16 cents. Yes, every single time, every cigarette, cough up 16 cents- with the States getting the king-size cut. According to the Tobacco Institute of Australia 64 per cent of the cost of a packet of 25 cigarettes goes towards State and federal taxes. Put another way, that's $4.02 in tobacco taxes on the average packet of smokes which will now cost $6.29 in NSW, Victoria, South Australia, Western Australia, Tasmania and the Northern Territory. Queensland smokers will pay 80 cents less per packet than puffers elsewhere. Breaking down that packet of cigarettes, the retailer squeezes out $1.04 (16.6 per cent), leaving $1.23 (19.5 per cent) for the manufacturer, distributor and tobacco grower. In line with health warnings on packets, authorities should warn governments that taxing smokers is addictive. During the 1990s the federal and State governments have increasingly relied on taxes on tobacco (and less on alcohol) to fill their coffers. Each year State and federal govern- ments collect about $3.6 billion in taxes on tobacco, with the States raking in about $2.1 billion and the feds taking the rest. The TIA expects the total to increase to $4 billion in 1995-96. After remaining stable during the 1980s at just under 2 cents now almost 3 cents of every tax dollar collected comes via the beleaguered smoker. Following this week's rises in State tobacco licence fees from 75 per cent to 100 per cent of wholesale sales, the States will take 65 per cent of the total smokers' tax dollar or $2.62 per packet. In its Budget earlier this month the Keating Government announced a 10 per cent increase in the rate of excise on tobacco products to $79.02 per kilogram, pushing up the average cost of a packet of cigarettes by 30 cents (and the Federal Government's cut to $1.40 per packet). TIA chief executive officer Mr Brendan Brady yesterday said smokers and the tobacco industry would take the latest tax increase on the chin. Despite the tax rises in recent years - pushing the so-called "effective" tobacco tax rate close to 200 per cent- tobacco consumption as a proportion of total consumer spending has been at a rock-solid 2 per cent during the past decade.
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