Cigarettes to increase by $2.70 a pack

SORRY, smokers.

It's the 1st of September, which means the government is jacking up the price of tobacco to feed its filthy spending habit.

From today, tobacco excise on cigarettes will rise by 13 per cent, from 62 cents to 70 cents per stick, while excise on other tobacco products will rise 17 per cent from $771.60 to $901.39 per kilogram.

That means a 30-pack of Winfield blues, currently retailing for $32.50, will rise to $35.20. "That's a $2.70 price hike that will make poor, addicted smokers worse off," said Liberal Democrats Senator David Leyonhjelm, describing it as a "huge, cruel" tax rise.

The 13 per cent increase reflects the last six months of wages growth plus the twice-yearly 12.5 per cent tax increase, while the increase in excise on roll-your own includes these factors plus an additional 3 per cent to bring its taxation into line with cigarettes.

The roll-your own changes were announced in the May budget and will be phased in over four annual changes each September. The new measure is expected to claw back additional $360 million in tax over four years, $35 million of which will be paid to the states and territories.

In 2016-17, the government raked in $10.69 billion in tobacco excise.

"In addition, GST is imposed on both the cost of tobacco and the tobacco excise - a tax on a tax," Senator Leyonhjelm said. "Tax will rise from 66 per cent of the price of cigarettes to 69 per cent. Tax paid by smokers is at least 17 times the cost that smokers impose on other taxpayers via the health system.

"The government bans the sale of e cigarettes that contain nicotine, even though these are 95 per cent less harmful than cigarettes. The extortionate taxation of tobacco, combined with the ban on e-cigarettes and plain packaging rules, have generated a booming black market in untaxed, unregulated tobacco run by organised crime. This supports the pushing of drugs and illegal guns."

In 2014, the Liberal Democrats confirmed the party had received "tens of thousands" of dollars from tobacco giant Philip Morris in the lead-up to the 2013 election, but Senator Leyonhjelm denied the donation influenced his vocal opposition to plain packaging.

"The Liberal Democrats have been around for about 20 years, and freedom of smokers' rights was the first issue, and the party only got its first donation [from Philip Morris] last year," he told The Guardian. "So it's not like anyone's mind was changed or anything."

According to the Cancer Council, tobacco smoking remains the leading preventable cause of death in the country, claiming the lives of 15,500 Australians every year.

frank.chung@news.com.au

News Corp Australia

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