Wednesday, April 14, 2010

a big contradiction

Kevin Rudd wants to introduce sweeping reform to the funding and provision of healthcare in Australia. Some people like the idea, but not everyone is convinced. I wouldn't like to hazard an opinion either way, but I listen with interest.

This caught my ear tonight. Kevin Rudd is throwing daily buckets of money at the states in a bid to buy their acquiescence to his proposed changes. Despite this, some state governments are worried they will end up with less money over all. Kevin might be dishing out the dough with one hand only to take it away with another. He claims the states will not be worse off in the long run but this does not seem possible... so where is the extra cash to come from?

Taxes on cigarettes of course!

Now it is no done deal, but rumour has it that the federal government will revenue raise by increasing tax on every packet of cigarettes. The price may rise from AU$13 to AU$20 for a pack of 30 over the course of a few years.

Is there a little big anomaly here? Cigarettes make you sick, so sick the health system is crumbling under the wait of chronic illness linked to smoking and other lifestyle factors. Increase the price of cigarettes and people will smoke less, or so we hope. This is good of course. But if people smoke less, the government will raise less tax and funding to the health system could be jeopardised. And chronic illness is just that. Chronic. It isn't going to go away just because a few people stop smoking when their cigarettes cost too much. So really, for this to be sustainable, the government needs people to keep smoking, so they can keep collecting the tax to keep the health system that is crumbling under the weight of chronic disease going, so the chronic disease caused by smoking can be treated.

Taxing cigarettes and alcohol is a crock. It might reduce consumption a little (I have my doubts - we always find money for things we really enjoy and want), but the government then has a vested interest in keeping us smoking and drinking in order to keep the money in the coffers.

I'll keep listening to the health debate, but right now, this is not my idea of a good idea.


At 10:46 pm, April 14, 2010, Anonymous 2paw said...

I was channel hopping tonight and I heard someone on the 7pm Project say they wanted cigarettes to become a boutique product, kind of like cigars are I suppose. One 'smart' panellist suggested that eventually there would be just one person smoking a pack of cigarettes with 6 billion dollars!!!
My word verification is 'calmo' so hope you are feeling calm-o!!

At 1:53 am, April 15, 2010, Blogger luke said...

GST revenue juggling is looking like the main funding source, but to deliver a net increase in health funding (without a drop in funding for unrelated services) will require funds from somewhere. Even so, an increase in cigarette tax is more rumour than policy AFAIK. KRudd needs more policy and less bullying IMO. Then we'll know where this magical money is going to come from.

At 10:21 pm, April 15, 2010, Blogger cecily said...

I understand the GST bit Luke, I also understand it is rumour, but... you know... too complicated to write about quickly at the end of the day. And all else aside, taxing alcohol and ciggies is still a furffy. They cannot seriously want people to stop when it brings in so much revenue! Same with us driving cars and things. Fuel = tax, too bad about the environment.

OK, I'm a cynic

6 billion dollars per pack... I hope it's a big pack and that they share them with the poor ;-)


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