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May 4th, 2016:

Tobacco tax rise comes after cigarette prices soar 343 per cent in 20 years

Smokers – asked to cough up yet again in the federal government’s latest budget – should take a deep breath before looking at the chart below.

It shows the price of tobacco has rocketed by 343 per cent since 1996, with the steepest rises since 2010.

On Tuesday the federal government announced it will increase the tobacco excise by 12.5 per cent a year for the next four years.

The plan will cause the price of a packet of 25 cigarettes to rise to about $40, up from $25 today.

Bitter though it may be for smokers, the hefty price rise is nothing new.

In the five years to March 2016, the price of tobacco rose by 64 per cent, compared with 51 per cent in the previous five years and 25 per cent in the five years before that.

The rising price of tobacco far outstrips the increases recorded by other consumer goods.

Cigarettes posted the largest price rise among more than 80 consumer items tracked by the Australian Bureau of Statistics’ consumer price index.

Tobacco prices rose 1.5 times faster than the cost of insurance (up 206 per cent) and nearly twice as fast as the cost of education (up 183 per cent), which posted the second- and third-largest price increases over the same period.

By contrast, audio, visual and computing equipment such as television sets, cameras and laptops plunged by 91 per cent. The cost of a car dropped by 26 per cent.

Emeritus Professor Simon Chapman from the University of Sydney’s School of Public Health said tobacco control had been one of the great public health success stories of our time.

“Tobacco control is the poster child of chronic disease control,” he said.

“Tobacco tax is like a vaccine against lung cancer. Price is the single most important factor in determining demand.”

Dozens of internal documents from the tobacco industry showed manufacturers were well aware of this, Professor Chapman said.

“That’s why they protest about it so much.”

Tobacco companies lose EU court appeal over graphic cigarette packaging rules

The decision sets a precedent that could see other governments launch a crackdown on a habit that kills six million people a year

Tobacco firms have lost a legal challenge against EU rules that force them to put graphic images on cigarette packages warning people of the dangers of smoking.

Health companies have welcomed the decision by Europe’s highest court to reject the challenge brought by Philip Morris International and British American Tobacco (BAT).

The decision sets a precedent that could see other governments launch a crackdown on a habit that kills six million people a year.

“The court finds that, in providing that each unit packet and the outside packaging must carry health warnings… the EU legislature did not go beyond the limits of what is appropriate and necessary,” the court said in its decision.

It said EU member states might choose to go further than the ruling to including health warnings on packs of cigarettes, by introducing standardised “plain” packaging.

The decision to introduce plain packaging goes beyond the requirements of the European directive and must still comply with the EU and international law. Whether plain packaging meets these requirements is currently the subject of ongoing litigation before the English Courts and the World Trade Organization.

The UK, France and Ireland have passed legislation that will see plain packaging introduced on 20 May.

Philip Morris and BAT have sought to overturn measures on plain packaging to be introduced in May. The tobacco companies said the measures deprived them of property in the form of trademarks and was a violation of European intellectual property law.

In the UK, MPs voted to back plain packaging by 367 to 113 in March 2015.

The vote came one year after the publication of an independent review of evidence by Sir Cyril Chantler, which concluded it was “highly likely that standardised packaging would serve to reduce the rate of children taking up smoking and implausible that it would increase the consumption of tobacco.”

Ash said it expects the UK court judgement to confirm that the introduction of standardised packaging in the UK is lawful.

“From 20th May all packs manufactured for sale in the UK will have to be plain, standardised in the same drab green colour with the product name on the pack in a standard font,” Deborah Arnott, chief executive of health charity Action on Smoking and Health (ASH), said.

In Australia, where the measure was introduced in 2012, smoking rates fell by more than 12 per cent between December 2013 and 2014.

A spokeswoman from British American Tobacco said that the European court decision does not directly authorise EU member states to adopt plain packaging.

“Despite today’s decision by the European Court of Justice, we stand by our belief that the Tobacco Products Directive is a clear example of the EU overstepping the limits of its authority. The reality is that many elements of the directive are disproportionate, distort competition, and fail to respect the autonomy of the member states,” the spokeswoman said.

Doubts rise over TTIP as France threatens to block EU-US deal

French president rejects trade pact in current form as lead negotiator blames Washington for impasse a day after leak revealed ‘irreconcilable’ differences

Doubts about the controversial EU-US trade pact are mounting after the French president threatened to block the deal.

François Hollande said on Tuesday he would reject the Transatlantic Trade and Investment Partnership “at this stage” because France was opposed to unregulated free trade.

Earlier, France’s lead trade negotiator had warned that a halt in TTIP talks “is the most probable option”. Matthias Fekl, the minister responsible for representing France in TTIP talks, blamed Washington for the impasse. He said Europe had offered a lot but had received little in return. He added: “There cannot be an agreement without France and much less against France.”

All 28 EU member states and the European parliament will have to ratify TTIP before it comes into force. But that day seems further away than ever, with talks bogged down after 13 rounds of negotiations spread over nearly three years.

The gulf between the two sides was highlighted by a massive leak of documents on Monday, first reported by the Guardian, which revealed “irreconcilable” differences on consumer protection and animal welfare standards. The publication of 248 pages of negotiating texts and internal positions, obtained by Greenpeace and seen by the Guardian, showed that the two sides remain far apart on how to align regulations on environment and consumer protection. Greenpeace said the leak demonstrated that the EU and the US were in a race to the bottom on health and environmental standards, but negotiators on both sides rejected these claims.

The European commission, which leads negotiations on behalf of the EU, dismissed the “alarmist headlines” as “a storm in a teacup”.

But Tuesday’s comments from the heart of the French government reveal how difficult TTIP negotiations have become.

France has always had the biggest doubts about TTIP. In 2013 the French government secured an exemption for its film industry from TTIP talks to try to shelter French-language productions from Hollywood dominance.

Hollande, who is beset by dire poll ratings, indicated on Tuesday that the government has other concerns about TTIP. Speaking at a conference on the history of the left, Hollande said he would never accept “the undermining of the essential principles of our agriculture, our culture, of mutual access to public markets”.

Fekl told French radio that the agreement on the table is “a bad deal”. “Europe is offering a lot and we are getting very little in return. That is unacceptable,” he said.

The director of Greenpeace EU, Jorgo Riss, said the French president’s concern was “unsurprising given that the commission is clearly not following the mandate it was given by EU countries to protect European environmental and health standards”.

The question marks over TTIP are a setback for the British prime minister, David Cameron, who last year vowed to put “rocket boosters” under the talks as he described TTIP as “a deal we want”. But Barack Obama has made it clear that the UK would not get any special treatment if it left the EU and tried to negotiate a separate trade deal. On a visit to London last month, the US president said the UK would be at “the back of the queue” in any post-Brexit trade talks.

The most recent round of TTIP negotiations took place last week, where EU and US officials reiterated that they hoped to reach a deal in the second half of 2016, before Barack Obama leaves the White House next January.

Talks began in July 2013, but rapidly became bogged down amid widespread public concern on both sides of the Atlantic. Reducing tariffs is only a small element of the trade pact. The most contentious issues centre on aligning consumer and environmental standards and opening up markets to transatlantic rivals.

Company tax cut, super changes lead budget–super-changes-lead-budget.html

Treasurer Scott Morrison insists his budget isn’t about winners and losers, but setting out a plan to grow the economy and boost jobs over the next decade.

Labor says despite spinning the mantra of fixing the budget to win the 2013 election, the government is now in a worse position with a deficit of almost $40 billion this financial year.

Mr Morrison’s first budget – which came just days before Malcolm Turnbull is set to seek a July 2 election – contained tax cuts for the wealthy and businesses, but a clawback of tax breaks on high-end retirement nest eggs.

‘The Liberals say this is a plan for jobs and growth – but it’s really a plan to deliver tax cuts for multinationals at the expense of Australian families,’ shadow treasurer Chris Bowen said.

Central to the government’s plans, ahead of a July 2 election, is a 10-year plan to gradually trim company tax, at a cost to the budget of $5.3 billion over the next four years.

The budget papers show over the long term, lower company tax is expected to add one per cent to GDP.

The small business tax rate, which was lowered in Joe Hockey’s 2015 budget, will go down a further point to 27.5 per cent with the turnover threshold increased from $2 million to $10 million.

From July 1, the upper limit for the middle-income tax bracket will rise from $80,000 to $87,000 a year – stopping around half a million workers from tumbling into the second-top marginal rate of 37 per cent.

Mr Morrison said a decision from the Reserve Bank to cut the cash rate to a new historic low of 1.75 per cent worked hand-in-glove with the government’s plan to reduce the company tax rate to 25 per cent over the next decade, adding an estimated $16 billion a year to the economy over the long term.

Treasurer Scott Morrison will also introduce a $1.6 million cap on the total amount of superannuation an individual can transfer into retirement-phase accounts.

People with combined incomes and superannuation contributions greater than $250,000 will pay 30 per cent on their concessional contributions, up from the current 15 per cent.

Also, the concessional contributions cap will be lowered to $25,000 a year.

And a new lifetime cap of $500,000 will be introduced for non-concessional contributions – to stem the use of super for tax minimisation and estate planning.

Mr Morrison said the superannuation system needed to be better targeted to support people to save and not be dependent on the age pension.

Labor immediately seized on it as putting big business ahead of families and doing little to restore funding for schools and hospitals.

‘This is a budget that develops a very dangerous trifecta – underfunds schools and hospitals but also sees the budget deficit blow out yet again,’ Shadow Treasurer Chris Bowen says.

A person earning $1 million a year will get a $16,715 tax cut, but three-quarters of taxpayers would get nothing, Mr Bowen said.

A couple on a single income of $65,000 with three children in primary school would be $3034 worse off a year.

A single mother on an income of $87,000 with two children in high school would be $4463 worse off.

Mr Morrison is also banking on a program offering training, internships and wage subsidies for business to boost youth employment.

The budget includes $840 million for a new youth employment package that links businesses with 120,000 young people on the dole who are eligible for a government internship program.

But first jobless youth must undertake six weeks of job-readiness training, including classes on presentation and how to work in a team.

A four- to 12-week internship could follow at a business such as a newsagent or supermarket.

Middle-income earners will get a tax break of up to $315 a year, while the highest earners won’t pay the two per cent deficit levy from 2017.

The budget also revealed vastly boosted firepower against multinational tax avoidance with the government looking to ramp up revenues to fund tax cut promises.

Canberra hopes to raise up to $4.35 billion over the next four years through measures that include a new taskforce led by the ATO, steep penalties for tax dodgers and tighter rules to close loopholes that multinational companies have been exploiting.

The announcements will also come in handy politically, as tax avoidance turns into a hot button topic ahead of the federal election.

The government will also beef up its Multinational Tax Avoidance Law, which came into effect on January 1, with a new diverted profits tax to impose a 40 per cent penalty tax rate on multinationals attempting to shift their Australian profits offshore.

The new tax is based on Britain’s ‘Google tax’ which targets multinationals that avoid paying tax by shifting profits to lower taxing countries.

In Australia, corporate giants including BHP Billiton, Rio Tinto, Apple and Google have been identified as using so-called marketing hubs in Singapore to help reduce their tax bill in the country.

Higher taxes will lift the price of a packet of cigarettes to $40 within four years.

The plan to whack four annual increases of 12.5 per cent on the tobacco excise from September next year will help lift the states’ entitlements by more than $700 million over those years.

The other change supporting GST proceeds is the application of the consumption tax to all goods bought online from overseas from 2017.

Overall, the states and territories are looking at a total GST pool of $60.7 billion in the coming year, with NSW again getting the lion’s share – $17.6 billion – and ACT the least at $1.2 billion.


Australia hails plain packaging on tobacco

When Australia introduced plain packaging for tobacco products in December 2012, the industry funded an advertising campaign warning that smuggling would shoot up, retailers would go broke and the government would have to pay out millions in damages.

A little more three years later, and on the eve of the introduction in the UK of non-branded packs carrying prominent health warnings, Australia says the plain packaging experiment is working well.

“The measure has begun to achieve its public health objectives of reducing smoking and exposure to tobacco smoke in Australia and it is expected to continue to do so into the future,” concluded the government’s post-implementation report published in February.

The review said plain packaging and the enlarging of graphic health warnings on packs resulted in a “statistically significant” decline in smoking prevalence of 0.55 percentage points.

It accounted for a quarter of the 2.2-point decline in average smoking rates among Australians from 19.4 per cent to 17.2 per cent between the 34 months before plain packaging’s introduction and the 34 months afterwards.

“This reduction alone would result in at least 118,000 fewer smokers,” said Mike Daube, professor of health policy at Curtin University. But plain packaging was never seen as a magic bullet to stop people smoking, he added. Rather it was intended to deter young people from taking it up in the first place.

The report cited several studies that claim plain packaging is having a positive impact — reducing the appeal of tobacco products and the potential for packaging to mislead people, and enhancing the effectiveness of the health warnings.

It also references a big drop in consumption of tobacco products, down more than 20 per cent between the end of December 2012 and December 2015, while acknowledging limitations in the data and the short time that has passed since plain packaging has been in force.

The big tobacco companies and lobbyists dispute the findings of the government’s review, saying the evidence suggests smoking prevalence rates have not deviated from a historical downward trend.

Big tobacco has commissioned research that contradicts the findings of the review and is funding the Dominican Republic’s legal challenge to plain packaging at the World Trade Organisation. This challenge says the plain packaging measures “do not and will not change smoking behaviour in Australia”.

British American Tobacco said: “Australia remains the only country to date to have introduced plain packaging — and despite three years’ worth of data, is still no closer to demonstrating that plain packaging works to reduce smoking levels.

“Governments are ignoring the evidence that it does not work to reduce smoking levels — and this is why we are challenging the policy in the UK in the High Court of England and Wales.”

Plain packaging in the UK is due to come into effect on May 20, with the High Court set to rule on the legal challenge two days earlier.

The UK, France and Ireland have passed legislation to introduce plain packaging on May 20.

Dr Tasneem Chipty, who wrote the report, said smoking had indeed been falling in Australia for some time but added that the decline she had measured took this into account and was “beyond historical trend”.

“Suggestions . . . that the observed decline in smoking prevalence would have happened anyway, in the absence of plain packaging, are simply false,” she said.

So far the tobacco industry has lost challenges to Australia’s plain packaging law in the courts.

The last big hurdle for the law is the WTO, which is hearing complaints from Indonesia, the Dominican Republic, Honduras and Cuba. Those countries claim plain packaging violates WTO agreements by creating an unnecessary barrier to trade and by impeding the use of trademarks.

Tobacco companies also argue there is no evidence to suggest a link between the appeal of packs and smoking rates. They attribute any fall-off in tobacco consumption in Australia since December 2012 to increases in excise duty and other health education policies.

They also cite a KPMG study funded by the tobacco industry showing the consumption of illicit tobacco in Australia has risen to 14 per cent of the overall market from 11.5 per cent in 2012.

Proponents of the policy reject these arguments, saying big tobacco has spent tens of millions of dollars lobbying against the measure is because it poses such a threat to their profits.

“Right from the beginning, plain packaging was the component of our anti-tobacco policies that the industry screamed the loudest about,” says Nicola Roxon, the former Labor party health minister who steered plain packaging legislation through the Australian parliament.

“It is no surprise that its effectiveness and the fact it is spreading around the world has them so worried.”

Ireland, France and New Zealand are among several countries committed to following Australia and the UK in introducing plain packaging.

Mr Daube says the industry is merely repeating the claims it made in Australia in its campaigns against plain packaging in the UK and elsewhere. “These arguments failed in Australia and they should not be allowed to become zombie arguments — killed off in one country only to be brought back to life in others,” he says.

“Plain packaging is the tobacco industry’s worst nightmare as it takes away their last marketing opportunity.”

Vaping: Government unmoved, key researcher clears the air re research

The Food and Health Department sticks to its old guns while key HKBU researcher Dr Chung Shan-shan looks to clear the air about previous media misstatements about her research results.

The Food and Health Department sticks to its old guns while key HKBU researcher Dr Chung Shan-shan looks to clear the air about previous media misstatements about her research results.

Dr Chung Shan-shan (鍾姍姍), Assistant Professor of the Baptist University’s Department of Biology, has been oft cited in Hong Kong for her research on vaping (aka e-cigarettes). Dr Chung was commissioned by the Council on Smoking and Health (COSH) between October 2015 and February 2016 to lead a studies on the potential harm brought about by vaping. She found in favour of stricter regulation, or perhaps a total ban of the product, but is keen to clear up misconceptions about the research in previous media reports. She takes issue with previous media reports that neglected to report on nuances she presented, leaving a misleading impression that has been repeated and magnified in the community.

“Neither COSH, which commissioned the research, nor we, claimed that the sample products were representative. But, like all other manufactured goods, product variability does exist. It is particularly so for vaping products as the history and experience in regulation and quality control are short when compared to many other electronic products,” Dr Chung explains. “One should understand that both PBDEs and PAHs [chemicals created from burning petroleum] are not by-products of e-liquids but rather the electronic appliances themselves. Even if the flavour is the same, different vaping products can use different flame retardants or different types of plastic resins, resulting in varying levels of emission of these by-products in the aerosols. So a thorough understanding of the health effects of vaping should not just focus on the compositions of the e-liquids but the whole e-cigarette product.”

While brief, the associate professor makes her stance clear: “Firstly, I haven’t gone through the entire the [new RCP] report, so it’s not something that I feel comfortable to comment with. Secondly, to more accurately interpret the arguments made, one needs to understand the backgrounds of the authors of this report as well. On the whole, it is a summary of available research findings at their time of writing,” she says. “I noted in our press conference that our findings on PBDEs [industrial toxic chemicals used as fire retardants] were likely the first of its kind. But so far, findings of our studies were announced only through a press conference. So I didn’t expect a literature review or a monograph that has to be based on proven scientific findings to cite from us.”

“Our findings are in a stage of being assessed by an international journal and are currently under review [i.e. unpublished]. So I believe that’s why [the RCP report] did not take into consideration our discovery,” she says.


European Court judgement clears way for plain packaging of tobacco in Ireland

Big Tobacco arguments rejected by CJEU

The Irish Cancer Society has today welcomed a Court of Justice of the European Union (CJEU) judgement that has stopped attempts by the tobacco industry to block the introduction of plain packaging of tobacco in Ireland in 2016.

The CJEU judgement upholds the rights of EU member states to introduce standardised packaging of tobacco products, where it is justified on grounds of public health.

The Court considered that that prohibition protects consumers “against the risks associated with tobacco use”.

The Irish Cancer Society says that this is a defeat for the tobacco industry who knows plain packaging works.

Donal Buggy, Head of Services and Advocacy at the Irish Cancer Society said: “Plain packaging of tobacco will save lives. The rejection of the tobacco industry’s case against the tobacco products directive (TPD) highlights the fatuous nature of their arguments and their fear that plain packaging will eat into profits.”

“Big tobacco knows that plain packaging, as a health measure, works, and are doing everything to prevent its introduction because they need to recruit 50 new smokers every day in Ireland to replace those dying and quitting.”

The CJEU found that the standardisation of labelling and packaging is a ‘proportionate’ measure and that EU legislature allowing for its introduction from May 20 is “appropriate and necessary”. The judgement clears the way for the introduction of plain packaging here in Ireland this summer.

Mr. Buggy said: “Today’s ruling represents the overcoming of another legal hurdle to the introduction of plain packaging in Ireland. What remains to be done now is the passing of minor technical amendments to legislation here so that plain packaging can be introduced in the very near future.”

The formation of a Government will, according to Mr. Buggy, “hopefully see the speedy progression of this legislation through the Oireachtas very shortly”.

The Irish Cancer Society warned however, that this will not be the last legal challenge to plain packaging either in Ireland or at EU level.

Mr. Buggy said: “The tobacco industry has deep pockets and will continue to fight these life-saving measures. Australia, the first country to introduce the measure, is still battling spurious cases from the industry four years on.”

Figures from the Australian Government show that since the introduction of plain packaging the number of people smoking has dropped to historically low numbers. Daily smoking rates have fallen from 15.1% in 2010 to 12.8% in 2013 – compared to 19% in Ireland. And among 12-17 year olds, only 5% smoke in comparison to 8% here.

“The louder Big Tobacco shout about this, the more we know it works.”

Mr. Buggy commended the efforts of the European Commission and Irish Government in “remaining steadfast in the face of enormous and costly legal pressure by the industry”.

“5,870 people die from tobacco related disease every year. The challenge now is to commit to public health, to commit to plain packaging and to reject the actions of a tobacco industry in crisis.”

Mr. Buggy said: “This is another big step towards achieving the goal of a tobacco-free Ireland by 2025”.

The Department of Health have committed to a Tobacco Free Ireland by 2025 – which means an overall smoking rate of less than 5%.

Today’s CJEU judgement also dismissed actions against the prohibition of menthol cigarettes and special rules concerning warnings, content and advertising of e-cigarettes.

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