Poor Smokers

Massive tax rises on cigarettes will mainly hurt those who will probably never quit.

The Rudd government has just announced that tax on cigarettes will increase by 60% over the next 4 years. Of course, health groups and many others will applaud the government for such a move citing the health benefits from reduced smoking rates. And there are many positive reasons for such a tax. But what about the negative impacts?

Price has proven to be the most effective tool for reducing smoking levels as we saw with the last major increase in Australia. When Rudd last increased the tobacco tax excise by 25% in 2010, the Department of Finance reported that smoking consumption decreased by a whopping 11%. Conveniently Rudd and co. leave out the fact that rates were already dropping by 6% and the actual affect was a 5% decrease. Still, more increases can only be a good thing, right?

Well, all is not what it seems. Research clearly shows that by dying younger we become less of a financial burden on society. Harsh but true. All the burbling about health costs incurred by smokers is just smoke and mirrors. And of course there is the growing black market. In the UK, 27% of cigarettes and 68% of roll-your-own tobacco is bought illegally. How big is the black market in Australia? All I know is that it's about to grow.

We all know that nicotine is highly addictive. Some politicians even claim it's more addictive than heroin. So why is this highly addictive substance suddenly so easy to quit? It's hypercritical when governments tout harm and addictiveness when trying to deter smoking but when they want to raise money by increasing prices, addiction is played down. Many, many people find it so difficult to kick their nicotine addiction that they will do almost anything to keep smoking. And there's no magic bullet here, this is the complex world of addiction and the rules are different for each person. 

The one vital question that has evaded this issue so far is not who it will affect but how much it will affect some people. After all, that's the point of this initiative … to affect people. To coax them out of their addiction by causing them financial pain. To put the price of tobacco out of their reach, forcing them to reconsider how they spend their often limited funds. It may sound logical and as a method for reducing smoking, it is largely successful. But elasticity of demand for tobacco is not linear and decreases as the price rises. It should be obvious that those who were going to quit because of price have most likely done so already. Only dedicated smokers, those who were rich enough not to care and the badly addicted soldiered on with their vice. Price hikes are a blunt tool and this new increase will not produce anywhere near the success of that in 2010. The most likely outcome is that it will mainly hurt those who may never quit.

Let's get some perspective here. Lower income families are already struggling, capriciously living day-to-day in a fragile financial environment. One big utility bill or unexpected expense can throw their lives into chaos, making them homeless or without electricity or gas. Add the costs for a smoker and it becomes even more precarious.  

Lack of money can often be the catalyst for family breakdown resulting in violence, ruined marriages and substance abuse. We see it everyday in this country and it's only going to get worse as cigarettes increase in price. Imagine living below the poverty line, week after week you struggle to make ends meet and one day the people who are supposed to represent you decide to rip your guts out.

Any new price increase will not force hard core addicts to quit. Instead, it will cause grief, family stress and force smokers into perilous situations. Do we really have to be reminded about the desperation of addicts and the massive cost on society? And it's not like the tiny population of those addicted to illegal drugs. There's 3.5 million smokers who will potentially be seeking alternatives to feed their addiction. It's not going to be pretty.

So, what does a hardcore smoker do at-the-moment when they don't have enough money? They skip meals or buy cheaper, unhealthy food. They wear shoes with holes in them. Car registrations and other bills are not paid. Then there's the kids. Forget that excursion little Johnny was looking forward to. And let's hope little Carrie likes stale vegemite sandwiches everyday for lunch. The reliance on welfare becomes part of their life. Asking for food vouchers just to feed their children doesn't seem so embarrassing anymore. Buying clothes from the op-shop is necessary. Living below the poverty line becomes a fact of life. 

It's about to get worse.

Most hardcore smokers will never, ever quit cigarettes and they will do whatever it takes to get by. Some women will turn to casual prostitution. Others will commit opportunistic crimes like petty theft and shoplifting. Defrauding Centrelink will not seem so taboo anymore. Others will turn to violent crime, drug dealing and similar desperate measures. Tension between couples will become explosive as their financial situation becomes untenable. Screaming matches, smashing furniture and divorce will define the new household of a smoker. Sadly, children hiding under beds or in cupboards will go unnoticed as families try to adjust to this new reality. And I mean "reality". This is not a movie or a yarn but real people suffering beyond what most of us can even imagine. Can most of us even comprehend what being evicted really means when you have no alternative? Do we really know what massive stress is when you just have absolutely no way to pay that utility bill? Could you live for a few months without electricity? Go on, try and picture what you and your family would do if you received a final court ordered eviction notice and you have no money. Scary, isn't it.

Now spare a thought for the single mother staying home to look after her young children. If she smokes and cannot quit, life is basically over for her. Because of another thoughtful Labor government initiative, single parents with children over 8 are forced onto the lower paying New Start scheme. This nasty policy is spun as a caring way to gently "encourage" people into the workforce. 

The government is dressing up brutal financial attacks on those who are the poorest as compassionate policies. I'm simply lost for words here as I'm trying to describe how much it makes me despise the government. It probably best explains why I hate politicians so damn much.

Carnage from the tax hikes will be felt mainly by low income groups.

Let's face it. This is not a health driven issue but a need to plug a massive hole in the government's budget. Any government in power would be faced with this issue whether Labor or Liberal. Revenue is down and the budget needs to be balanced. Most people understand that. What I don't get though is why the government has an insatiable need to be in surplus? And isn't there better ways to raise this cash? As usual, the reasons are purely political and some smokers will have their lives ruined because of it. It's simply not good enough. Most economists agree that Australia can run a deficit like most other countries do. This basic strategy would eliminate all the government's proposed cuts and increased taxes. And then there's the petrol excise that was fixed by Howard in an attempt to win over voters while introducing the GST. A simple realignment would cost drivers only 1.5¢ per litre but would raise about $23 billion over the next four years. 

And as a final "fuck you" to smokers, the government maintains it's ban on electronic cigarettes containing nicotine … the single most effective method to reduce the smoking of carcinogenic cigarettes. It's a stark reminder that anti-drug lobby groups like Quit are just far too influential on government policy. If the government really cared so much about our health, they would ignore the anti-drug/smoking groups and give smokers access to e-cigs. 

If health was really the issue then this policy would have been better thought out. What about making cigarettes only available via prescription? This would stop most new uptakers and be too much trouble for casual smokers. What about age limits so that the price pain is only inflicted on younger, less addicted smokers? Why aren't e-cigs used for treatment? It's just so obvious that this is not about the government's concern for our wellbeing.

As usual, those with enough money will not be affected. I don't smoke that much anymore so personally it won't really effect me too much. And those I know that still smoke just feel betrayed by Rudd. Not voting for Labor won't be a vote for Mr. Rabbott or The Greens though. They fully support the idea of hammering smokers with increased prices. I dare say we will see a few votes going to The Australian Sex Party, Wikileaks or the Drug Law Reform Party. The main result I can see for Rudd's master plan will less votes for him. Maybe even 3.5 million of them.  

Related Links:
Smoking Taxes - What About Those Who Don’t Quit?
Smoking and poverty link probe
Smoking Ban - Putting the Boot into Mental Health Patients
Tobacco Tax Increase Hurts The Poor