Labor aiming to hurt the poor – for their own good

Australia’s shadow treasurer Chris Bowen has said that the Labor party is ‘keenly aware’ that its proposal to push the price of cigarettes to $40 a pack by 2020 would hurt the poor, according to a story by Eliza Borrello for the Australian Broadcasting Corporation.

The government has been increasing its cigarette tax take regularly under a policy that saw the penultimate increase of 12.5 percent imposed on September 1. A pack of 25 cigarettes currently retails for $25-30.

But the Labor Party has said that if it came to power in elections due next year it would continue the policy of increasing taxes.

Bowen was quoted as saying that financially poor people smoked more than did the better off, and that these poor people died earlier, in part because of their smoking.

“That is offensive to us as the Labor Party,” he said. “This is a measure which will make a contribution to doing something about that.”

Increasing tobacco taxes by 12.5 per cent four more times until 2020 would reap $47.7 billion in revenue over 10 years, according to the Parliamentary Budget Office, and Labor claims that its policy would generate ‘savings’ of almost $50 billion over the medium term while almost doubling the rate at which people quit smoking.

Labor’s health spokeswoman Catherine King said that her party wanted to put the savings towards budget consolidation, but also “towards very important health initiatives”.

British American Tobacco Australia was quoted as saying that Labor’s proposed cigarette tax increases would drive the trade in illegal tobacco.

Company spokesman Scott McIntyre said the change would only push smokers into the black market, which accounted for 14 percent of all tobacco consumed in Australia.