Kevin Rudd's tax hikes on tobacco will save lives and cut health system costs and should be applied to alcohol

That's what Kevin Rudd would have told Cabinet colleagues who baulked at the Federal Government's tax hike on cigarettes last week.

With 3.3 million smokers in Australia's pool of 14.5 million voters, Rudd's maths add up. He might alienate 23 per cent of an electorate happy to cough over their ballot papers, but Rudd gets clean air from a non-smoking 77 per cent who'll happily accept the $5.3 billion the extra tobacco tax will earn the Federal Government. Smokers, anarcho-liberals and other flat-earthers will cry "nanny state" crocodile tears as they deny the link between price and consumption. It doesn't matter how much ciggies cost, they'll say, poor blue-collar workers will still smoke, even if it means giving up milk and bread for the kids. But that's nonsense. There's overwhelming evidence that "sin taxes" reduce the consumption of legal but dangerous substances. In 2011, international research found that, for every 10 per cent of increased tax on cigarettes, we can expect 4 per cent of smokers to quit. Indeed, Australian medicos claim Rudd's tobacco tax could see up to 200,000 Australian smokers give up the habit. The gains for the Australian economy are huge. The worth of the lives saved is immeasurable.

My only beef with the Rudd vision is that it doesn't go far enough. If the Federal Government has the stomach to stand up to tobacco interests, why falter in the face of the alcohol industry? The price mechanism works just as well on booze. After Rudd's alcopops tax was introduced in 2008, for example, we saw a huge decline in the sale of sweet ready-mix drinks. But critics slammed the tax because it didn't reduce youth drinking overall. In that sense, the alcopops levy was ill-conceived public policy because it didn't go far enough.By taxing only one corner of the grog market, the policy merely shunted kids into other, equally dangerous, consumption patterns. Instead of pineapple flavored passion pop, youngsters instead guzzled on "goon" or swigged strong spirits. In that sense, the alcopops levy was ill-conceived public policy, simply because it didn't go far enough.

By taxing only one corner of the grog market, the policy merely shunted kids into other, equally dangerous, consumption patterns. Instead of pineapple flavored passion pop, youngsters instead guzzled on "goon" or swigged strong spirits. Had the tax hike been consistent across all alcohol products - beer, wine and spirits - there's no doubt youth binge drinking would be lower today and some of the 60 people who die each week from alcohol could have been saved. Enter that rare place where morality and politics meet. Rudd's tax isn't just about plugging a Budget black hole left by an amended carbon price. It's also about taking a moral ground above the Coalition. Labor campaign ads, for example, are already asking Opposition Leader Tony Abbott to defend the federal Liberals' acceptance of about $3 million in donations from tobacco companies over the past 12 years. It's a fair point. Happily, All Labor branches have refused tobacco donations since 2004 and both Labor and the Coalition in New South Wales NSW have banned donations from the tobacco, alcohol and gaming industries, and from property developers. Less heartening is the possibility the NSW Government will soon rescind those bans. But both major parties elsewhere can hang their heads in shame at the amount of cash they've accepted from the alcohol industry.

There is, of course, the $400,000-plus dollars the Australian Hotels Association slipped the NSW Liberals just before the 2011 state election. Then there's the $160,000 the Australian Hotels and Hospitality Association gave Victorian Labor in 2010 and the more than $140,000 handed to the Victorian Coalition that same year. Coopers Brewery also gave the South Australian Liberals more than $16,000 in 2010, and the list goes on. It seems alcohol and not oil lubricates Australia's electoral machinery Predictably, the free marketeers will again accuse me of "nanny state" politics. But I can never fathom why radical libertarians would allow people to injure themselves in the name of personal liberty. Even if they don't care about protecting the health of their fellow man, surely they see the economic argument of keeping Australians out of hospital which, in turn, keeps income tax down. For those who deny they need help in lowering their alcohol and tobacco consumption, price mechanisms are the way to go. Dr Paul Williams is a Griffith University School of Humanities senior lecturer.

Source: http://www.couriermail.com.au/news/opinion/kevin-rudd8217s-tax-hikes-on-tobacco-will-save-lives-and-cut-health-system-costs-and-should-be-applied-to-alcohol/story-fnihsr9v-1226691674874