Smokers to pay for budget shortcomings

Tomorrow’s mini-budget will contain bad news for Australian smokers, according to a story by Mark Kenny for The Sydney Morning Herald.

The government is set to announce the imposition of four 12.5 percent annual increases in federal tobacco excise, which will push the price of cigarettes toward a dollar each.

The measure is among several unpopular decisions to be unveiled in the budget statement designed to pay for new election spending while maintaining Labor’s promise to get back to surplus in 2016–2017.

The four tobacco excise hikes will occur on Dec. 1; Sept. 1, 2014; Sept. 1, 2015; and Sept. 1, 2016.

The Treasury estimates they will raise $5.3 billion over the four-year period.

It is expected that the price of a pack of 20 Winfield Blue cigarettes will rise by $0.98 after the first increase and by $5.25 by December 1, 2016.

Treasurer Chris Bowen said the increase would fund cancer-related health services while discouraging smoking and helping the budget.

The increases seem likely also to ensure that supporters of standardized packs will be able to point to declines in sales of licit cigarettes following the introduction of such packs in December last year.