Lift cigarette prices to $20 a packet to help tackle health funding crisis: Quit

KEVIN Rudd is being urged to increase the price of cigarettes to $20 a packet and raise an extra $2 billion in taxes if he is serious about tackling a health funding crisis in Australia.

The Prime Minister last night outlined the looming threat of an ageing population, warning that the rising cost of health would outstrip the states' ability to raise taxes within two decades.

Quit Victoria executive director Fiona Sharkey told The Australian Online today that lifting the price of cigarettes would save lives.

“It is the single biggest thing we can do to bring smoking down. It cuts consumption and it cuts the number of people who smoke,” she said.

“What the tobacco industry says is the tax is regressive and it hurts poorer people. In fact we find that low socio-economic (people) are more likely to quit.

“As Health Minister Nicola Roxon said, if we don't act on what we know works then we are effectively killing people.”Raising the cost of cigarettes and alcohol is a serious option before the Rudd government. It was one of the main recommendations of the recent National Health Taskforce that also suggested a volumetric tax on alcohol to reflect alcohol content, a push believed to be also backed in Treasury secretary Ken Henry's tax review for the Rudd government.

The Rudd government's big reform options for health also include spending a lot more money on preventative health such as Quit smoking measures to help out the budget in the future.

An increase in the price of cigarettes to $16.50 would raise about $1 billion and an increase to $20 a packet would raise an extra $2 billion a year.

“We haven't had a real price rise here for 10 years and if we had followed the World Health Organisation recommendation we would be at around $16.50 a packet now and we are about $13,” Ms Sharkey said.

“The Taskforce suggested a two phased increase to $16.50 and second one to $20 a pack.

“And the reason they talked about a two-phased increase was to support programs to help low-income people to quit. So that could be subsidy on nicotine replacement therapy. The cost to do that is so minimal.

“It's the single biggest thing you can do. So don't delay.”