National Drug Strategy
National Drug Strategy

National Tobacco Strategy 2012-2018: Draft for consultation

6.2 Continue to reduce the affordability of tobacco

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There is strong evidence of the influence of price on the prevalence of tobacco smoking.32 Price increases encourage existing smokers to quit and raise the barrier for people considering taking up smoking, especially young people.26,32,40

Research examining the impact of tobacco control policies on smoking prevalence identified tobacco price increases as having the greatest effect of all policies examined.41 Australian research confirms international studies that show that the impact of price rises is most significant in low income groups. Over the period January 1999 to December 2006, a one Australian dollar increase in price was associated with a decline in prevalence of 2.6 per cent among low income groups compared with a 0.2 per cent decline among high-income groups. The study concluded that increasing the price of cigarettes not only is an effective tobacco control strategy to lower smoking prevalence in the general population, but may also provide a means of reducing social disparities in smoking.42

Article 6 of the FCTC states that price and tax measures are an effective and important means of reducing tobacco consumption, particularly among young people.26 Article 6 requires members to implement tax and price policies on tobacco products to reduce tobacco consumption and prohibit or restrict sales of duty-free tobacco products.26

In April 2010, the excise on all tobacco products increased by 25 per cent. This policy increased excise by about seven cents per stick for cigarettes and nearly $82 per kilo for other tobacco products.

Research conducted after the 2010 tax increase suggests the price increases are having an effect. Recent quitters who quit after the tax increase (versus before) were more likely to report that they were influenced by price.43 Smokers’ responses to the recent price increases included smoking-related changes (tried to quit, cut down) and product-related changes (changed to lower priced brands, started using loose tobacco, bought in bulk) and the authors suggested that regular increases in tobacco tax may further encourage quitting activity.43

It is important to ensure that increases in the price of tobacco are accompanied by efforts to prevent and minimise the illicit trade in tobacco. To date Australia has been successful in this regard. In 2010, nearly half of smokers aged 14 years or older had seen or heard of unbranded loose tobacco known as ‘chop chop’. However, the proportion of smokers using unbranded tobacco half the time or more remained low at 1.5 per cent.1

Additional efforts may be required to support low income smokers such as ensuring access to subsidised nicotine replacement or provision of more targeted support to encourage cessation.22 From February 2011, the Australian Government has provided financial support to help people quit smoking by subsidising a range of medicines on the Pharmaceutical Benefits Scheme for the general population at a cost of more than $40 million over four years. These include Zyban (Bupropion), Champix (Varenicline) and nicotine replacement therapy (NRT). Between February and July 2011, 100,000 scripts for subsidised nicotine patches had been filled. From 1 January 2012, additional subsidies have been available for lower strength nicotine replacement therapies. GST exemptions have been provided for transdermal or oromucosal nicotine replacement therapies sold in non-pharmacy settings.