Data shows Wagga, regional and poor most impacted by smoking tax increase

Health Minister Mark Butler announced the 5 per cent per year increase on tobacco tax as part of a wider plan to reduce nicotine addiction across the country, and increase government revenue. It is expected to add $3 billion dollars to the budget over the forward estimates.

As a former medical doctor, regional MP, and chair of the rural and regional health committee, Wagga MP Joe McGirr may be uniquely qualified to comment on this issue.

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Dr McGirr said that although this might result in some short-term financial pain for smokers, it would be a win for them in the long run.

"Over a number of years, in a number of different countries, tax increases have been associated with a decrease in the rate of smoking," he said.

"There are clearly benefits in terms of health for reduction of smoking rates.

"We've seen a massive decrease in smoking rates ... at the same time, we've seen significant rises in life expectancy and quality of life."

Due to higher smoking rates, the 15 per cent increase to the tobacco tax will have a greater impact on poor, regional and remote communities in both health and financial terms.

According to Murrumbidgee Local Health District (MLHD), there are 278 deaths, and 3926 hospitalisations in the area attributed to smoking - a level "significantly higher" than the rest of NSW.

Data provided by the Cancer Council last year showed the daily smoking rate in MLHD was 10.5 per cent. The NSW average is 8.2 per cent.

The latest official data from NSW Health shows the MLHD smoking rate was 14.1 per cent, compared with 10.4 per cent in the Sydney LHD.

The Australian Bureau of Statistics (ABS) say smokers are more likely to to be socio-economically disadvantaged, suggesting increases to the tobacco excise will also target those who can least afford it.

"People who lived in areas of most disadvantage were more than three times as likely to be current daily smokers than those in areas of least disadvantage (16.1 per cent compared to 5.3 per cent)," they wrote in 2022.

"Almost one in five (18.6 per cent) people who were unemployed were current daily smokers.

"Adults who live in outer regional and remote Australia were more likely to be current daily smokers than those who live in major cities (15.7 per cent compared to 8.9 per cent)."

Higher smoking rates in the regions make this policy a double edged sword, that is likely to improve long term health outcomes most in these communities, while also taxing them at greater rates than affluent areas in the city.

Based on the official NSW Health Data, people living in MLHD are 38.5 per cent more likely to be subject to these taxes than someone in the Sydney Local Health District, and more than twice as likely (120 per cent) to pay this tax as someone in Northern Sydney - NSW's wealthiest health district.

Despite this, a Cancer Council review of studies on tobacco taxes concluded it was not regressive, based on the argument cigarettes are a "discretionary item", and it would ultimately be good for smokers wallets for them to quit.

Dr McGirr agrees. He said if people quit, ultimately it would be of benefit to their finances as well as their health.

"There's no question rates of smoking are higher in low income groups, and rural and remote areas," he said.

"It does affect those groups disproportionately. On the other hand, the reductions in smoking will also improve the quality of life for those groups.

"In the long run, this should result not only in better health outcomes, but more income."

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