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Date published: 28th April 2010 | Type: Media release

The Drug Foundation added its support to the Government’s surprise announcement of an increase in the tobacco excise tax effective from tonight, but says that decision puts the Prime Minister’s rejection of an excise increase for alcohol in stark contrast.

Associate Health Minister Tariana Turia announced a bill will be introduced tonight under urgency that will increase the excise on tobacco immediately, with further increases phased over the next 2 years.

The government’s bill will see the excise on cigarettes rise immediately by 10 per cent with a further 10 per cent increase next January and a third increase of 10 per cent in January 2012.

There will also be a 24 per cent increase in the excise tax on loose tobacco followed by 10 per cent increases in 2011 and 2012, adding up to just over 50 percent over two years.

“International and local experience consistently shows the effectiveness of excise tax increases on changing smokers’ behaviour – it helps current smokers cut down and deters potential new smokers from starting,” said Drug Foundation Executive Director Ross Bell.

“The same can be said for alcohol excise tax increases. Research shows that raising the price of alcohol can reduce alcohol-related harm; it reduces drinking by heavy drinkers and deters moderate drinkers from becoming heavy drinkers. Importantly young people’s drinking is particularly sensitive to price. Higher alcohol taxes are considered by the World Health Organisation to be one of the most effective policies for reducing alcohol-related harm,” said Ross Bell.

“Law Commission President Sir Geoffrey Palmer agreed with the World Health Organisation and made it a key recommendation in his liquor review report released yesterday. The Prime Minister was quick to reject that recommendation out-of-hand.

“For both tobacco and alcohol, price can influence behaviour. The government gets that for tobacco, but rejects it alcohol. The Prime Minister needs to explain why,” said Ross Bell.

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