Independent Senator Nick Xenophon announced yesterday that he plans to introduce a resolution in the upper house to seek a minimum floor price for all cigarettes sold in Australia.
Senator Xenophon’s announcement is in direct response to British American Tobacco Australia launching what it claims is the cheapest legal packet of cigarettes onto the market at just $13 for a 25-pack. Senator Xenophon has accused the tobacco company of circumventing laws to discourage people from smoking.
Since the introduction of excise increases in last year’s Federal Budget, tobacco companies have been price discounting and creating new products at a lower cost to retain their portion of market-share.
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Australians have seen dramatic changes to tobacco laws over the past 15 years, most notably with the introduction of plain packaging and the banning of smoking in public places. You can’t walk into a 7-11 now a day to buy a bottle of coke without seeing the gruesome photo located directly behind the attendant, of someone who has suffered due to the effects of smoking.
It was inevitable that the Government would slug the smokers of Australia with a massive tax increase, presented as a way to decrease the take-up rate of teenagers and to force those who can’t afford it to quit. In turn it was also inevitable that tobacco companies would react by introducing new brands and varieties at significantly discounted rates to retain affordable prices.
Unfortunately (or fortunately), the price increase has meant that the lowest paid workers of Australia and those living on a pension now struggle to afford cigarettes. With the full excise increase happening over the space of four years, it will only get harder.
The saying goes, you can lead a horse to water, but you can’t make it drink. The same goes for anyone with an addiction, whether it is alcohol, gambling or tobacco. At the end of the day, if that person truly enjoys the experience of smoking a cigarette, they will find the way to pay for it. If it comes down to paying $7 to visit their doctor or 10 cigarettes, there will be a few who chose the latter.
Setting a minimum floor price for all cigarettes sold in Australia sounds like a reasonable idea, but consultation with the industry, and also with what the market can bear, has to occur during the process. At the end of the day, it is the individual who will make the decision whether they want to be a smoker or not.
What do you think? Should smoking slowly be stubbed out through tax increases or is it your right to choose what you put into your body?