World No Tobacco Day 2014 | Raising tobacco taxes

Does increasing the price of tobacco products reduce tobacco consumption?

Do taxes influence the price of tobacco products?

Does the NSW community support increasing taxes on tobacco?

What are the benefits of raising taxes on tobacco?

What is the estimated impact of higher tobacco taxes in Australia?

How much does a pack of cigarettes cost in NSW?

Does increasing the price of tobacco reduce tobacco consumption?

Yes. Research shows that as the price of tobacco products goes up the percentage of people who smoke and the amount of tobacco products that smokers consume goes down.1,2


Figure 1. Real tobacco prices and tobacco consumption in Australia, 1990-91 to 2010-11.3
Source: Scollo, MM and Winstanley, MH 2012, Tobacco in Australia: Facts and issues (Chapter 13). 4th edn, Melbourne: Cancer Council Victoria.

 

Do taxes influence the price of tobacco products?

The World Health Organization states that the most effective way for governments to control tobacco prices is through the use of taxes. Research shows that in countries like Australia increasing the cost of a pack of cigarettes by 10% can result in a 4% reduction in use of tobacco products.4

Evidence shows that increasing tobacco tax has the biggest impact on reducing smoking prevalence – even more so than other effective tobacco control strategies, such as smoking bans.5

 

Does the NSW community support higher taxes on tobacco products?

Cancer Council NSW research shows that most people support increasing the price of tobacco products through taxes. 

  • 63 per cent of respondents surveyed said they would support increasing the price of tobacco products to discourage people from smoking. 
  • 66 per cent of people surveyed said they would support increasing the tax on tobacco products to continue supporting the cost of treating smoking related diseases. 
  • 66 per cent of adults surveyed said they would support increasing the tax on tobacco products to pay for health education programs.

     

What are the benefits of raising tobacco taxes?

  • Tax increases encourage existing smokers to quit
  • Socioeconomically disadvantaged smokers are more likely to quit as a result of tobacco tax increases
  • Increased workplace productivity as general health improves due to lower tobacco consumption.
  • Prevents non-smokers from starting to smoke9 – especially young people,7 who, as research shows, are more influenced by price than older people.

 

What is the estimated impact of increased taxes in Australia?

Increases in tobacco taxes between December 2013 and September 2016 are estimated to encourage around 210,000 Australians to quit smoking. If you need assistance to quit smoking, information and support is available by calling Quitline, visiting iCanQuit.com.au, or by talking to your GP.

 

How much does a pack of cigarettes cost in NSW?

The average pack of cigarettes in NSW costs $18.01. However, Cancer Council NSW research has found lower cigarette prices in areas with a higher proportion of price-sensitive smokers. Prices were cheaper ($17.40) in the most disadvantaged neighbourhoods compared to prices in the most advantaged ($18.13).10

Prices were also cheaper in neighbourhoods with more children. These trends suggest targeted discounts are being used as a tobacco marketing strategy which may be undermining impact of increased taxes on tobacco products.10

1. World Bank. Curbing the epidemic: governments and the economics of tobacco control. Washington: World Bank, 1999. Available from: http://documents.worldbank.org/curated/en/1999/05/437174/curbing-epidemic-governments-economics-tobacco-control
2. International Agency for Research on Cancer. Effectiveness of tax and price policies for tobacco control. Handbooks of Cancer Prevention, Vol.14. Lyon, France: IARC, 2011. Available from: http://www.iarc.fr/en/publications/list/handbooks/
3. Scollo, MM and Winstanley, MH 2012, Tobacco in Australia: Facts and issues (Chapter 13). 4th edn, Melbourne: Cancer Council Victoria. Taken from www.TobaccoInAustralia.org.au. Accessed on 21 May 2014.
4. World Health Organisation, Tobacco-Free Initiative website content. Available at http://www.who.int/tobacco/economics/taxation/en/. Accessed on 21 May 2014.
5. Wilson LM, Tang AE, Chander G et al. 2012, Impact of Tobacco Control Interventions on Smoking Initiation, Cessation, and Prevalence: A Systematic Review, Journal of Environmental and Public Health, 961724.
6. Chaloupka FJ, Yurekli A and Fong GT 2014, Tobacco taxes as a tobacco control strategy, Tobacco Control, vol. 21, pp172–180
7. Collins and Lapsley, 2008, The costs of tobacco, alcohol and illicit drug abuse to Australian society in 2004/05, University of New South Wales.
8. Tobacco in Australia, The cost of smoking, http://www.tobaccoinaustralia.org.au/chapter-17-economics/17-2-the-costs-of-smoking. Accessed on 20 May 2014.
9. Australian Government, 2010, Taking Preventative Action: A response to Australia: the healthiest country by 2020. The Report of the National Preventative Health Task Force.
10. Burton S, Williams K, Fry R et al. 2014, Marketing cigarettes when all else is unavailable: evidence of discounting in price-sensitive neighbourhoods, Tobacco Control; 23: e24-e29.

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