And now the little nudge Kevin gave the price on Friday will mean that over the next four years smokers will be sending a total of $33 billion to the tax man (go team). In the same time frame, Kevin’s new mining tax will have raised just $12 billion (as long as the resource boom holds up).
Even better than that (as any pollie worth his salt, well knows), whacking smokers is an exceedingly popular blood sport. Almost 90% of Australians are in favour of raising ciggy taxes. So in political terms smoking taxes are as close to free money as you’ll ever get.
In return for their generous contribution to nation building our nicotine addicted brethren ask very little. They cost the health system just $0.3 billion per annum (largely because they have the good grace to die quickly and inexpensively). And they don’t mind being treated like lepers as long as we let them keep smoking somewhere (even if they do have to take a cab to the designated smoking zone).
So it’s a good thing smokers are happy to continue to pay all that moolah because (‘reformed’ or not) by 2033, the Australian health system will be costing up to $295 billion every year (up from the $94 billion it currently costs). To put that in perspective, last year the total tax take for the entire country was a mere $338 billion.
If it weren’t for smokers, the queues at our hospitals would already be a helluva lot longer. Unfortunately smokers are not a renewable resource (for tax dollars). Every time we increase the tax, a few more (clearly less patriotic ones) give up. Since 1980, we’ve mined the revenue base down from 34% to just 19% of adults.
Worse than that, there is a very high likelihood that they swap their expensive (and taxable) addiction for a tax free addiction like sugar. A series of rat studies out of Princeton University over the last six years, have suggested that nicotine and sugar share the same (neurological) addiction pathways. Which might explain why smokers tend to hit the sweets when they give up.
Since people willing to have their brain hacked open while they suck on a lolly have been a little thin on the ground, we’ve had to be happy with animal studies. But advances in scanning technology are meaning that more and more human studies are starting to appear. And these studies are telling us exactly the same thing. Sugar is just as addictive as nicotine in humans.
Getting people addicted to sugar is not a good thing for our ailing health system. Sugar addicts develop lifelong diseases like Type II Diabetes and Heart Disease. These chronic conditions are currently managed (and not cured) with a continuous supply of very expensive medication. And ultimately end with people occupying expensive acute beds for very long periods.
The health budget is a runaway tram because of the accelerating blowout in these chronic (and largely preventable) diseases. By 2033 Type II diabetes alone is likely to cost a billion (or so) more to treat every year than we currently prise out of the smokers.
Taxing smokers until they quit provides a great band-aid for the sugar induced blowout in health. But what happens when we’ve converted them all to sugar addicts? How do we pay for the health system they will desperately need? Who do we tax then?
Ooh here’s a thought, how about we stop feeding people sugar instead? Nah, you’re right, that’s a silly idea, we’ll probably just tax the sugar instead.