Labor's Anti-Poor Tax Grab

The Australian Labor Party today confirmed its intention to slug poorest income earners with yet another staggering tax hike on tobacco to pay for further spending programs.
The price rise would stem from gradual increases in the tax on cigarettes continuing beyond 2017, if Labor is elected. The Opposition said the policy would generate savings of almost $50 billion over the medium term

The previous Labor government hiked tobacco taxes a staggering 60%, a move that hit the poorest in society hardest:  The poorest twenty per cent of households (by income) pay three times as much in Nanny State taxes as those in the top twenty per cent.

Tobacco taxes already raise a staggering seventeen times smokers healthcare costs and tobacco taxes in Australia are already one of the highest in the world, and the highest in the Asia-Pacific region. This latest idea has  nothing to do with reducing smoking rates. It is a simple cash grab to pay for further spending.

To make matters worse, it probably won't even raise a cent! Kevin Rudd promised his 2010 tobacco tax would raise an extra $5 billion. In reality, tobacco excise revenue fell. Deloitte found that the 2010 tobacco tax hike caused the illegal tobacco trade to jump 29%, costing the government $1.1 billion in foregone tobacco excise tax revenue (a number that has since increased) and even the Government’s own implementation report on the 2010 excise tax increase admitted they have no idea if it raised a single cent!

This is poorly thought out policy on the run that will hurt the poorest hardest, and won't even raise anywhere near the money claimed. It must be opposed and defeated.


PS:Since when is a tax hike a "saving"? Given the fact that apparently the Australian Labor Party can't even work out the difference between revenue and expenditure, I would suggest that their priority should be attending a basic financial literacy course - and NOT slugging those who can least afford it.


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