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March 21st, 2012:

Smoking is a drag on world economy – Tobacco Atlas

Reuters, Wednesday March 21 2012

By Mark Tay

SINGAPORE, March 21 (Reuters) – Smoking costs the world 1 to 2 percent of its gross domestic product each year and could kill about 1 billion people this century, authors of the fourth edition of the Tobacco Atlas said at the book’s launch in Singapore.

The economic losses include direct and indirect costs such as healthcare spending for treating smoking-related illnesses and the value of lost productivity, say the authors of the book, which is published by the American Cancer Society and World Lung Foundation.

The cost of smoking could be even greater, as co-author Hana Ross said it was difficult to measure intangible costs like the suffering of family members or pain felt by patients.

“During the 20th century, tobacco killed 100 million people. The estimate is that in the 21st century, tobacco will kill 1 billion people,” lead author Michael Eriksen said at the launch of the book at a global health conference in Singapore.

The world’s population has grown by more than four times in the last century, passing the 7 billion mark last year.

Eriksen said there are about 1 billion tobacco users around the world and 600,000 non-smokers die each year because of exposure to second-hand smoke – 75 percent of them women and children.

China is by far the world’s largest consumer of cigarettes, with 38 percent of them in 2009, and saw costs due to smoking more than quadruple to $28.9 billion between 2000 and 2008, the authors said in the book.

“China has quite a problem because the tobacco industry is part of the government,” co-author Judith Mackay said, noting that Beijing’s move to raise tobacco taxes two years ago did not change the purchase price of cigarettes but merely manipulated the way taxes were paid to the government.

“China is in a process of change. It needs a little bit of the stick but quite a lot of encouragement to really take the process forward,” Mackay said.

The world’s most populous nation is one of the 174 countries to have signed and ratified the World Health Organisation’s Framework Convention on Tobacco Control.

Some countries, including the United States and Argentina, have signed but not ratified, while Indonesia, Uzbekistan and Zimbabwe have done neither.

Eriksen described such treaties as “toothless”.

“Any treaty is written by the member states who are the ones who are going to have to ratify it, so it is not in their interest to have penalties,” he said.

“If you ratify and don’t do anything, there is no financial penalty, which is wrong because there should be teeth. It is a life and death situation.” (Editing by Robert Birsel and Jon Boyle)

Tobacco duty up 37p, tax on alcohol 2% above inflation – 50p top tax rate cut

12:07pm Wednesday 21st March 2012

By Nigel Burton

The Chancellor risked the wrath of the British people by cutting tax for millionaires at the same time as warning workers on lower incomes they may have to work longer.

George Osborne promised a simpler tax system, far reaching reforms, a system where millions on low pay are lifted out of paying tax altogether.

Among the major announcements was a new pensions system that will be easier to understand and a major reduction in corporation tax.

Alcohol duty will rise by 2% above the rate of inflation as part of automatic increases implemented in 2008 while duty on tobacco rises 5%. The result is over 5p extra on a pint and a staggering 37p on a packet of cigarettes. Road tax increases by inflation and the increase in fuel duty already proposed will go ahead later this year. Duty was frozen for road hauliers.

Perhaps most controversially, the 50p top rate of tax for the richest in society has been cut to 45p from 2013.

He pressed ahead with the move – unpopular with some Liberal Democrats – after revealing that an official report by the taxman had found it was raising ‘‘next to nothing’’.

He also reduced proposed cuts to child benefits paid to the better off.

But he increased the threshold at which everyone starts paying tax to £9,205, claiming millions of working people would be £220 a year better off as a result.

The cut in the top rate of income tax to 45p in the pound for all income over £150,000 from April 2013 was countered with a hike in stamp duty on homes worth over £2 million from 5% to 7%.

The Chancellor also confirmed a crackdown on various tax loopholes used by the rich including a 15% stamp duty rate on homes held through companies.

Overall, Mr Osborne claimed his measures would raise five times more from the wealthy than the 50% top rate introduced by Labour.

The Chancellor also watered down plans to withdraw child benefit from rich families. Child benefit will only be withdrawn if someone in the house earns more than £50,000 – and only gradually.

This means an extra 750,000 families earning substantially more than the average wage will keep some form of child benefit.

He said: “We will earn our way in the world by providing new growth friendly planning rules.”

However, he warned of the risks posed by the Eurozone crisis and Iran. He said the Office for Budgetary Responsibility expected the UK economy to avoid a recession. The OBR’s growth figure for 2012 is 0.8 per cent and 2 per cent next year, and 2.7 per cent in 2014.

According to the OBR, unemployment will peak at 8.7 per cent this year before falling back.

The claimant count estimate revised down by around 100,000 for each of the next four years, peaking at 1.67 million this year, rather than the predicted 1.8 million.

Inflation is expected to fall to 1.9 per cent next year – just below the Government’s 2 per cent target.

The deficit is also falling.

The borrowing forecast has been revised downwards by £1 billion to £126 billion for 2011/12, then £120 billion in 2012/13, £98 billion in 2013/14, then £75 billion and £52 billion, reaching £21 billion by 2016/17.

“We must stick to the course,” said Mr Osborne. “There will be no giveaways today.

“Some would have been tempted to spend the windfall.

“I do not propose to spend it. Instead, I have used it to pay off debt.”

However, he warned that millions of workers may have to work longer before they can retire.

Mr Osborne told MPs: ‘‘I can confirm today that there will be an automatic review of the state pension age to ensure it keeps pace with increases in longevity.’’ That raised the prospect of ever long working lives.

Mr Osborne also set a target for savings in the welfare budget of £10 billion by 2016.

“We will also maintain our control on welfare spending.

“The passing of the Welfare Reform Act two weeks ago was an historic moment.

“I pay tribute to my Right Honourable Friend the Work and Pensions Secretary and to all my coalition colleagues for supporting him against determined opposition from those who defend unlimited welfare.

“But even with the Act, the welfare budget is set to rise to consume one third of all public spending.

“If nothing is done to curb welfare bills further, then the full weight of the spending restraint will fall on departmental budgets.

“The next Spending Review will have to confront this.

“So I am today publishing analysis that shows that if in the next Spending Review we maintain the same rate of reductions in departmental spending as we have done in this review, we would need to make savings in welfare of £10 billion by 2016.

“We will also address the rising costs of an ageing population, and the burden this places on future generations.

“We will be publishing a White Paper on social care.

I’ve also said that we would consider proposals to manage future increases in the state pension age, beyond the increases already announced.

“I can confirm today that there will be an automatic review of the state pension age to ensure it keeps pace with increases in longevity.”

One area where future government spending is expected to be lower than planned is Afghanistan.

Mr Osborne also announced a £100m improvement in Forces’ accommodation.Forces serving overseas will also receive 100 per cent relief on the average council tax bill, and the families welfare grant will be doubled.

Among the transport infrastructure announcements was a plan to extend the electrification of the Trans-Pennine route.

The Get Britain Building Fund, which provides finance for construction, is to be expanded. The Finance Partnership is to be expanded by 20 per cent and the Enterprise Finance Guarantee will also be expanded.

The UK must ‘‘confront’’ the lack of airport capacity in the south east, said Mr Osborne. Announcements are due later this summer.

The Government is to support £150 million of tax increment financing to help councils promote development and provide an extra £270 million for the Growing Places fund.

Ultra-fast broadband and wi-fi is to be pioneered in ten of Britain’s biggest cities, including Newcastle.

New tax breaks and incentives for the film, animation and video games industry were also announced.

To roars of approval the Chancellor joked: “I intend to keep Wallace and Gromit here, where they belong.”


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