Instead of a regressive policy which targets the poor, the ongoing rise in tobacco excise benefits the poor more than it does the rich, say experts.
Public health physician Dr Nathan Grills and research assistant Nicole Hughes, both with the Nossal Institute for Global Health at the University of Melbourne, argue in MJA InSight today that suggestions the tobacco excise harms low-income people is “a shortsighted analysis and demonstrates a poor understanding of a sophisticated tobacco control intervention”.
“In reality, the policy actually benefits the poor far more than the rich because it is a progressive tax in terms of public health and long-term economic benefit,” the pair write.
“This tax will reduce the long-term financial losses and payments more in lower than in higher socio-economic groups, by reducing medical expenses and protecting livelihoods especially in poorer groups. Ultimately it saves more lives in lower SES groups than in higher SES groups.”
They say that the evidence that increasing the cost of tobacco increases intentions to quit, ultimately resulting in help to quit, is “beyond all reasonable doubt, unless you represent Big Tobacco”.
“Using studies on the effect of price increase on tobacco usage, we can estimate that a 100% price increase (as these excise increases will deliver) will decrease cigarette purchases by around 42%. That is, a price elasticity of –0.42,” the pair write.
Annual tobacco surveys show that taxation has contributed significantly to reducing tobacco use to one of the lowest rates in the world, they say.
And poorer people are more likely to be influenced to quit by an increase in the price of cigarettes, they say: price elasticity is higher among those who have lower incomes.
This is particularly the case for young people, who tend to have lower incomes, because they are less likely to take up the expensive habit in the first place or become addicted.
“Increasing the pack price to $40 will not only save more lives, but it will also protect more livelihoods in low SES groups than in high SES groups,” they write.
“These lower SES groups are often the least able to afford to have their breadwinners sick or dying from tobacco-related illness: a result that happens more often than not for those who are long-term smokers.”