Australia: the healthiest country by 2020
National Preventative Health Strategy – the roadmap for action
Key action area 1: Make tobacco products more expensive
- Chair's Foreword
Chapter 1: Building preventative health in Australian communities- Chapter 2: Obesity in Australia: A need for urgent action
Chapter 3: Tobacco: Towards world’s best practice in tobacco control- The case for prevention
- Targets
- Key action areas
- Key action area 1: Make tobacco products more expensive
- Key action area 2: Increase the frequency, reach and intensity of social marketing campaigns
- Key action area 3: End all forms of advertising and promotion of tobacco products
- Key action area 4: Eliminate exposure to second-hand smoke in public places
- Key action area 5: Regulate manufacturing and further regulate packaging and supply of tobacco products
- Key action area 6: Ensure all smokers in contact with health services are encouraged and supported to quit, with particular efforts to reach pregnant women and those with chronic health problems
- Key action area 7: Work in partnership with Indigenous groups to boost efforts to reduce smoking and exposure to passive smoking among Indigenous Australians
- Key action area 8: Boost efforts to discourage smoking among people in other highly disadvantaged groups
- Key action area 9: Assist parents and educators to discourage use of tobacco and to protect young people from second-hand smoke
- Key action area 10: Ensure that the public, media, politicians and other opinion leaders remain aware of the need for sustained and vigorous action to discourage tobacco use
- Key action area 11: Ensure implementation and measure progress against and towards targets
- Summary Tables
- References
- Chapter 4: Alcohol: Reshaping the drinking culture in Australia
- Appendices
‘A high cigarette price, more than any other cigarette attribute, has the most dramatic impact on the share of the quitting population.’ Memo from Claude Schwab to John Heinenimas (Philip Morris), 5 March 1993 PM doc 2045447810
Increasing prices is one of the most effective measures that government can take to reduce tobacco consumption and prevalence.[27, 39]
Analysis of changes in smoking prevalence in the largest Australian states in response to changes in various interventions[40] found that the costliness of cigarettes has the most powerful impact of all the policies studied, and that the effect of price was greatest among those on lowest incomes.[41]
While concerns about future health are the main motivator for quit attempts among high socioeconomic status (SES) smokers, cost is a major trigger among smokers of lower SES.[42] International reviews,[27, 43] as well as recent Australian[41, 44] and overseas studies,[45] indicate greater reductions in smoking following tax increases in low compared to high SES groups. A 2008 review of population interventions to reduce tobacco use found that price increase was the only intervention for which there was strong evidence of a greater effect among those on low incomes and in lower-status occupations.[46]
Cigarettes in Australia are less costly than they are in many other comparable countries. In September 2008 a packet of 30 cigarettes cost $13.50 in Australia, but the equivalent price of 30 cigarettes in other English-speaking countries was around $20 in Dublin, $18 in London and $16 in Toronto; see Figure 3.1.
Figure 3.1:
Price of 30 cigarettes in Australia and other English-speaking countries, A$, September 2008
Source: Economist Intelligence Unit, September 2008,[47] popular brands from medium-priced stores.
Note: Prices were collected prior to the largest-ever increase in excise duty in the United States in April 2009.
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Figure 3.2:
Tax paid as a percentage of final recommended retail price – OECD countries, 2003
Source: Scollo, M Tobacco in Australia, Facts and Issues.[48]
Modelling of the predicted impact of policy measures on future prevalence of smoking in Australia indicates that increasing the price of tobacco products by at least 50% in real terms within the next three years is vital if we are to achieve the target of 10% adult daily smoking by 2020.[23] Most smokers make several attempts before quitting. Staged increases in price provide opportunities for smokers to think about the costs of smoking and for smokers who have relapsed to try again.Action 1.1
Ensure that the average price of a packet of 30 cigarettes is at least $20 (in 2008 $ terms) within three years, with equivalent increases in the price of roll-your-own and other tobacco products.
While increasing the costliness of tobacco products is vital to reducing disparities in tobacco use, it is acknowledged that a large and abrupt increase in prices could trigger financial stress for some smokers who are unable to quit. Financial stress increases the likelihood of a smoker wanting to quit, but is associated with increased likelihood of relapse.[49] There is little direct evidence of food insecurity attributable to tobacco use in Australia, although it is likely that some heavy smokers already spend less than is optimal on food, clothing and other goods and services.
Raising taxes in several stages rather than in a single increase should maximise cessation, triggering many price-sensitive smokers to try to quit each time an increase is introduced or announced. Staged increases will also give remaining smokers time to reduce the number of cigarettes or amount of tobacco they smoke each day and adjust their tobacco and non-tobacco related expenditure.
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Related action
This strategy includes numerous measures to provide additional encouragement and assistance for smokers from socially disadvantaged groups. It also includes several measures to ensure that all smokers attempting to quit are able to afford clinically suitable quit-smoking medications including nicotine replacement therapy (NRT). Governments could ensure that smokers in immediate financial stress such as those using emergency housing and relief services and those highly disadvantaged groups who are clients of other state human services are directed to smoking cessation services and able to access available subsidies.
Illicit trade
Any availability of illicit tobacco products (that is, products on which taxes have been avoided) undermines the effectiveness of taxation, particularly among low-income groups.[50-52] Increases in excise and customs duty should therefore be complemented by measures to prevent any significant increase in illicit trade.
Since 2004 the Australian Tax Office has vigorously pursued operators who attempt to evade excise duty through the sale of illicit unprocessed tobacco known as chop chop.[53, 54] Locally grown chop chop has become less of an issue in Australia since the phasing out of tobacco growing in 2006; however, some unprocessed tobacco may still be available from overseas. The Australian Customs and Border Protection Service (ACBPS) has measures in place to detect the illegal importation of counterfeit cigarettes and other tobacco products on which customs duty has not been paid, and several offenders have been prosecuted over the last few years. However, so far there appears to have been little progress on measures specified under clauses 15.2, 15.4 and 15.6 of the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) to cooperate with other parties on the elimination of illicit trade. No action has yet been taken to require manufacturers and importers to track and report on sales and distribution (as proposed in a November 2008 Chairperson’s text for a Protocol on Illicit Trade in Tobacco Products).[55]
Action 1.2
Develop and implement a coordinated national strategy to prevent the emergence of illicit trade in Australia.
Action 1.3
Contribute to the development and implementation of international agreements aiming to combat illicit trade globally.
Action 1.4
Ban the retail sale of tobacco products via the internet.
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Duty-free sales
Article 6 of the FCTC states:
2. Without prejudice to the sovereign right of the Parties to determine and establish their taxation policies, each Party should take account of its national health objectives concerning tobacco control and adopt or maintain, as appropriate, measures which may include: ‘...
(b) prohibiting or restricting, as appropriate, sales to and/or importations by international travellers of tax- and duty-free tobacco products.’ WHO FCTC.[56]
There are no legal barriers preventing the Australian Government from banning the sale of tax- and duty-free tobacco products in Australia. Additionally, obligations under current international agreements would not prevent Australia from introducing laws banning international travellers (both residents and non-residents) from bringing tax- and duty-free tobacco products into the country, provided that the laws were introduced on public health grounds. Several European countries have recently taken action along these lines.
Action 1.5
End tax- and duty-free sales in Australia. Abolish tax and duty concessions for all travellers entering Australia (specified limits for personal use); and participate in negotiations on international agreements concerning the application of limits to international travellers.