SCMP – Mar 22, 2005
Financial Secretary Henry Tang Ying-yen’s failure to implement an increase in tobacco duty will be accompanied by a colossal sigh of relief by the tobacco industry. Their intensive lobbying of the Treasury, behind closed doors over many years, has paid a handsome dividend. Cheaper tobacco sells much more easily to youth. On RTHK on February 17 Mr Tang gave his reasons for this disastrous decision, as follows:
Cigarettes are already ‘expensive’.
An increase in duty will ‘increase smuggling’.
He wanted to create a budget free of tax increases.
It will be apparent to most people, in view of the huge burden of disease and net economic loss caused by tobacco, that his reasoning is flawed.
First, cigarettes in Hong Kong are not expensive given our average gross domestic product per capita. Tax as a proportion of price is about 50 per cent. The World Health Organisation (WHO) clearly states that for effective tobacco control it should be 65 to 80 per cent. The government has lost a valuable opportunity to prevent nicotine addiction in children and adolescents.
Second, worldwide studies reported by the World Bank and WHO have shown that most smuggling is a result of organised crime and corruption rather than cross border differentials in tobacco duty, and that petty smuggling can be dealt with by disciplined services with additional support from increased tobacco tax revenues.
Finally, is the financial secretary seriously telling us that he has traded off a sizeable and preventable proportion of illness and health care costs against the cosmetic appearance of a budget free of tax increases? If it had been consulted, the Health, Welfare and Food Bureau would surely have pointed to both the short and long term benefits of a rise in tobacco duty this year.
In the new government is there any possibility of making real progress in protecting public health?
ANTHONY J. HEDLEY and MARCUS YU, Tobacco Control Research and Policy Unit, Department of Community Medicine, University of Hong Kong