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February, 2008:

John Tsang on RTHK re Tobacco Tax

RTHK 29/2/08 Transcript

Subject: Phone in: Budget Review 2008
Presenters: Bryan Curtis and Nick Beacroft
The Financial Secretary, Mr John Tsang, answers listeners’ questions about his 2008-2009 Budget Speech.
(Transcription of relevant Tobacco Tax portion of phone in only.)

FS: Financial Secretary, John Tsang
BC: Bryan Curtis
NB: Nick Beacroft

Approx Time code: 15.38 minutes

BC: We have an email here from James which is actually a letter written into the South China Morning Post, but I don’t think that the writer would mind us reading it out. It’s from James and the letter is actually from Anthony Hedley at the University of Hong Kong so you might know what it’s about. [Quoting]

“As expected John Tsang failed to use his budget to increase tobacco duty to protect community health and help pay for the burden of care created by disease caused by tobacco. He continues the recent tradition of a succession of financial secretaries of adopting a firm tobacco industry-friendly position, protecting brand value and directly facilitating the promotion of cheap tobacco to youth. It’s clear that the treasury dictates public health policy or lack of it and refuses to apply fiscal measures even when they are proven to be needed. They are able to do this regardless of the evidence based advice of the Department of Health and the Food and Health Bureau.” He wraps up “as we struggle to contain the need and demand for health care perhaps the government auditor could now adjudicate on the bizarre incongruity of government actions.” That’s from Dr. Anthony Hedley.

FS: Well, tax is only one way to reduce the smoking habit in Hong Kong and I think education is a lot more important and I really hope that Dr. Hedley would dedicate a lot of his resources to educating people about the wrong of smoking. I think that would really help reduce it in a more permanent way, then the young children and adults of Hong Kong can learn the bad things about smoking. And I think that would be a more permanent way of reducing the smoking habit.

NB: But why don’t you use the tax stick to dissuade people from taking up smoking?

FS: This is one way of doing it but I think we need to take a more balanced approach in what we are doing. We already have a pretty high tax there and if we were to raise it at this time it would no doubt increase the smuggling activities.

NB: Yes but we’re not being held to ransom by the smugglers, we have our own policy. By putting up a tax you’d discourage people from smoking and you will snub the smugglers because every year our financial secretary comes on this programme and says ‘we can’t increase the tax because the smugglers will increase their business’. We’re being held to ransom by the smugglers!

FS: No surely not. But this is one aspect.

NB: But surely yes I think is the answer.

FS: But surely we need to really look into all different aspects and I think tax is one aspect, it’s just one aspect. It is now about 80-something cents per cigarette now. We could raise it further no doubt but there are other things that we can do better, such as education.

BC: Perhaps ancillary to that – if you look at the amount of money that the government has spent on health, we spent 31 or 32 billion dollars in 2001 and we spent 31.6 billion last year. How come we haven’t seen any increase – and I think it’s almost exactly the same for education. That education was slightly lower spending last year than it was in 2001/02.

FS: No I think it has been increasing in both, on both sides. I think you need to look at the full picture…I don’t have…

BC: Well I have the picture here. In 2001/2002 we spent 32 billion dollars on health and only 31.7 I believe last year.

NB: That’s right 31.6 billion in 2007/8 and as Brian says, 32 billion back in 2001.

So we seem to be spending less money on health and education. Why is there this under-spending?

FS: No. In 2007/08 the original estimate was 30 billion dollars and we are estimating 32.5 billion this year for health alone.

NB: Well in any case roughly the same as in 2001/02 so some people would say the economy has gotten bigger and yet we seem to not be spending more on things like health and education.

Burden Of Care Created By Disease Caused By Tobacco

A letter sent to the SCMP by Anthony J Hedley, Department of Community Medicine, University of Hong Kong on the 29th Feb 2008.

The Editor
South China Morning Post

Dear Sir

As expected John Tsang Chun wah failed to use his budget to increase tobacco duty to protect community health and help pay for the burden of care created by disease caused by tobacco .He continues the recent tradition, of a succession of financial secretaries, of adopting a firm tobacco industry friendly position,protecting brand value and directly facilitating the promotion of cheap tobacco to youth.

Your columnist Jake van der Kamp accuses me of failing to protect the pockets of the poor who generally have the highest prevalence of smoking(Post January 1 2008). However there is nothing more regressive than fostering an epidemic of disease and premature death among a vulnerable sector of the population,especially when it has its origins in children and adolescents.Applying higher tobacco duty isn’t “moral highmindedness” as Van der Kamp claims but an essential duty of care toward young people.

It is clear that the treasury now dictates public health policy (or lack of it)and refuses to apply fiscal measures even when they are proven to be needed.They are able to do this regardless of the evidence-based advice of the Department of Health and the Food and Health Bureau.

As we struggle to contain the need and demand for health care perhaps the government auditor could now adjudicate on the bizarre incongruity of government actions.

Anthony J Hedley
Department of Community Medicine
University of Hong Kong

Education Key To Stamping Out Smoking – February 29, 2008

FS: Proposals Based On Wide Consultation

Financial Secretary John Tsang answered wide-ranging questions from a talk-show audience this morning, days after he presented his maiden Budget in the Legislative Council. He stressed that the Budget proposals came about after a four-month public consultation process.

“We went around, listened to all the political groups, to all the community groups, went down to town hall meetings a few times, go to people’s homes, talk to people, and so forth. We have indeed seen a lot of people, listened to their views, didn’t say very much, but we were listening and we got a lot of input and we have constructed our budget based on what they have told us,” he told listeners.

The end result, Mr Tsang said, is a “quite balanced” Budget. While some parties have agreed, he has also heard criticisms that it does not go far enough for some sectors. He promises to take all comments into consideration – but is unlikely to make any changes to the document.

“If we move something, we have to move other things, otherwise it’s going to be skewed. So I don’t have a great tendency towards changing any one of the different aspects. This is a basket,” he said.

Responding to a comment that the Budget did not do enough for senior citizens, the Financial Secretary countered that they were a main focus.

“I have paid a lot of care to the elderly. There must be over a dozen paragraphs just on the initiatives for the elderly, from elderly academies to care services to old age allowance, maintenance of self-occupied properties, home environment and so forth. So we have given a lot of consideration to them.”

When another caller suggested there were not enough initiatives aimed at protecting our environment, Mr Tsang noted that in the next year the Environment Bureau had a “record-breaking” budget of $7 billion.

“We have never had that much money put in environment. We are putting more and more money into it,” he said.

Education Key To Stamping Out Smoking

Asked why the Budget did not propose raising the tobacco tax, the Financial Secretary noted that tax is only one way to reduce the smoking habit in Hong Kong – and that he thought education is a lot more important.

“If all the young children and the adults of Hong Kong can learn all the bad things about smoking, I think that would be a more permanent way of reducing the smoking,” he said.

“We need to take a more balanced approach. We already have a high tax there, if we raised it at this time, it would increase the smuggling. We need to look at all different aspects. Tax is just one aspect. It is now about 80 cents per cigarette. We could raise it further. But there are other things we can do better.”

2008 Hong Kong Government Budget

An article on the Hong Kong’s governments’ failure to raise tobacco taxes can be viewed on our news blog here:

Hong Kong Tobacco Tax

In Hong Kong the low tobacco tax and smoking exemptions in 2007 saw a 29.5% increase in cigarette sales above 2006 pre smoking ‘ban’ sales as opposed to UK which has high tobacco tax and a comprehensive smoking ban.

The HK Financial Secretary chose not to increase tobacco tax, a proven method of preventing youth smoking, since 1999.

Cigarette sales drop 4% following smoking ban – The Daily Mail
February 27, 2008

A drop in cigarette sales prompted by England’s smoking ban gathered pace at the end of last year, latest figures show.

Smokers in Britain bought 47 billion cigarettes in the past 12 months – a year-on-year dip of nearly four per cent, according to market analysts Nielsen.

The drop became more acute in the last three months of 2007 with a year-on-year drop of 6.7 per cent. This compared to a sales decline of just 0.1 per cent year-on-year during the six months before the ban came into force in England, according to Nielsen data for The Grocer.

Smokers spent more money on cigarettes in 2007 than they did the previous year but this was mainly due to higher taxes, the trade magazine says.

A Nielsen spokesman told The Grocer: “Value growth was driven by price and duty increases, while volume sales reflect a market that is coming to terms with an unprecedented year; legislation and the poor summer took sales out of the market.”

The true impact of the smoking ban will not become apparent for another few months because sales temporarily lifted over the Christmas period, the spokesman said.

He added: “2008 looks to be a further difficult year for the tobacco industry with the full effects of the smoking ban realised, the forthcoming pictorial health warnings and restriction on selling tobacco to those aged under 18.”

The smoking ban came into force in Wales on April 1, 2007 and in England on July 1, 2007. A ban came into force in Scotland in 2006.

Nielsen’s data on cigarette sales in the year to January 26, 2008 comes from its Scantrack survey of till sales representing 74,000 outlets around Britain.

Tobacco Smoke Derived Particle Levels

A 32-country comparison of tobacco smoke derived particle levels in indoor public places

ABSTRACT – TC Online – 26th February 2008

Objective: To compare tobacco smoke-derived particulate levels in transportation and hospitality venues with and without smoking in 32 countries using a standardised measurement protocol.

Methods: The TSI SidePak AM510 Personal Aerosol Monitor was used to measure the concentration of
particulate matter less than 2.5 microns in diameter (PM2.5) in 1822 bars, restaurants, retail outlets, airports and other workplaces in 32 geographically dispersed countries between 2003 and 2007.

Results: Geometric mean PM2.5 levels were highest in Syria (372 mg/m3), Romania (366 mg/m3) and Lebanon (346 mg/m3), while they were lowest in the three countries that have nationwide laws prohibiting smoking in indoor public places (Ireland at 22 mg/m3, Uruguay at 18 mg/m3 and New Zealand at 8 mg/m3). On average, the PM2.5 levels in places where smoking was observed was 8.9 times greater (95% CI 8.0 to 10) than levels in places where smoking was not observed.

Conclusions: Levels of indoor fine particle air pollution in places where smoking is observed are typically greater than levels that the World Health Organization and US Environmental Protection Agency have concluded are harmful to human health.

View the full report on Tobacco Smoke Derived Particle Levels in Indoor Public Places here.

Mexico to Go Tobacco Free

VivirLatino – 26 Feb 2008

The Mexican Senate just passed the much talked about “Anti-tobacco Law”, which would make many parts of the country smoke free, and the consequences for breaking it are no joke:

The General Law for Tobacco Control will prohibit smoking in closed public spaces and violations will be punished with up to 36 hours of jail time.

In addition, fines up to the equivalent of 100 to 10,000 minimum wage days [a common way of calculating fines in Mexico] and the temporary or permanent closing of businesses violating the law will be applied. For repeat offenders, the fine can go up to 1 million pesos.

The new law establishes “100% smoke free zones” in public spaces, workplaces both public and private and universities.

Mexico’s Milenio reports that once the official bulletin is released by the government, the law will take effect in 90 days all over the republic. No Smoking signs will be visibly placed in areas where smoking is prohibited, and the government will provide a phone number where citizens can report violations of the law. In addition, business owners who wish to allow smoking in their establishments will have 180 days to modify their property to close off an area for that.

The law also establishes new regulations for tobacco-related advertising, which from now on may only appear in publications geared toward adults or in places where only adults are allowed to enter, such as bars and nightclubs.

Bahrain Bans F1 Tobacco Advertising

by Amy Glass on Tuesday, 26 February 2008

Tobacco advertising on billboards related to Formula One motor racing has been banned in Bahrain in a move to reduce smoking in the kingdom, where one in three adults smoke.

The ruling is part of a long-term campaign to remove cigarette and tobacco advertising at all of the kingdom’s sporting events, Bahrain daily Gulf Daily News reported on Tuesday.

Mariam Al Jalahma, under-secretary for primary care and public health at the Health Ministry, said the ban was a significant development in Bahrain’s effort to tackle its growing smoking epidemic, quoted the newspaper.

However, Al Jalahma would not comment on whether this ban would be extended to tobacco advertising during the race itself.

There is already a blanket ban on tobacco advertising in Europe and many F1 teams are no longer sponsored by tobacco companies.

A ban on all tobacco sponsorship in F1 will come into affect in 2009.

Al Jalahma said the government was currently studying anti-smoking laws of several countries, as it drafts its own legislation, according to Gulf Daily News.

The government first drafted an anti-smoking law in 1994, but it was not implemented. The new draft is a combination of the original draft and a new law proposed by the parliament.

The proposed anti-smoking law will see smokers fined up to 50 Bahrani dinars ($132) for lighting up in specified public areas, while restaurants which fail to properly separate smoking and non-smoking areas will be fined up to 5,000 dinars and closed for up to two months.

Al Jalahma expected the law would be passed by the Shura Council before the end of the year.

Heart Attack Rates Fall Following National Smoking Bans

ScienceDaily (Feb. 26, 2008)

French researchers announced a striking 15% decrease in admissions of patients with myocardial infarction to emergency wards since the public ban on smoking came into effect in restaurants, hotels and casinos in France last January. The announcement was made on 23 February by the National Sanitary Institute. Similar results were published in Italy on 12 February by the Environmental Health Authority: researchers in Rome found an 11.2 percent reduction of acute coronary events since the January 2005 smoking ban took effect in Italy.

The European Society of Cardiology (ESC) wishes to stress the positive impact of smoking bans in all European countries that have adopted laws banning tobacco use in public places.

“There is a wealth of data linking smoking and cardiovascular disease (CVD),” stated Prof Daniel Thomas, of the European Society of Cardiology and a Senior Cardiologist in the Centre Hospitalier Pitié- Salpêtrière in Paris. “Although further studies are needed all over France to confirm the strong decrease in smoking related deaths over time, these statistics show the same tendency professionals have already observed in Italy, Ireland and Scotland when these countries introduced their own bans on tobacco. To me, the most striking aspect in this study is the reduction of pollution inside cafés and restaurants by over 75% between December 2007 and January 2008. Passive smoking has been shown to increase the risk of coronary heart disease and the recent smoking ban is obviously having a beneficial effect on both smokers and non-smokers.”

The European Society of Cardiology together with other health institutions has continuously informed the public of the overwhelming evidence of the adverse effect of smoking on cardiovascular health. The European Guidelines on CVD prevention warn that smoking is responsible for 50% of all avoidable deaths and that smoking causes heart attacks at any age. Data produced by Prof Pekka Jousilahti from Finland at the ESC’s EuroPrevent Congress in 2006 showed that smoking releases over 4000 chemicals into the body affecting every organ.

“The swift reduction of heart attacks and strokes in France is very good news indeed!”states Prof Jean Pierre Bassand, Past President of the ESC and Head of the Cardiology Department at the University Hospital of Besançon . “Cardiologists do not need to be convinced that smoking and passive smoking have an important impact on the rate of heart attacks; they are also convinced that giving up cigarettes and eliminating passive smoking has a very favourable effect on the rate of heart attacks. Unfortunately the ban on smoking in public places has not led to a reduction in the number of smokers in France, confirming data observed elsewhere.”

Prof Daniel Thomas agrees: “Governments must learn from these findings and not give in to pressure from the tobacco lobby. In France people are actually still buying tobacco but just the fact that working and living environments are free from smoke pollution has made an enormous difference to public health, not only regarding cardiovascular disease, but also respiratory disease and other complaints such as headaches, as the INVS findings show. It is very important to stress the immediate results observed on cardiovascular disease when people live in smoke free environments.”

“Although cardiovascular diseases are very complex in nature and due to many causes, smoking bans most certainly have caused a reduction in coronary events. This is consistent with the pollution reduction observed in indoor public places” explains Roberto Ferrari, President Elect of the ESC.

The European Society of Cardiology would like to encourage smoke cessation across the continent through smoking bans and taxes on cigarettes. There is a consensus on the benefits of smoking cessation which are usually almost immediate and contribute to diminish the burden of cardiovascular disease.

The positive figures communicated last week in Italy and France should encourage other European countries to enforce similar measures to protect their citizens.

The European Heart House
2035 Route des Colles
B.P. 179 – Les Templiers
FR-06903 Sophia Antipolis

Tobacco Tax Drive To Help Youths Quit

February 25, 2008 – Damon Pang – The Standard

Spending 10 percent of the extra revenue from a doubling of the tobacco tax in Wednesday’s budget speech on education would help youths quit smoking, the Committee on Youth Smoking Prevention said yesterday.

A survey conducted jointly by the committee and the Chinese University’s Hong Kong Institute of Asia Pacific Studies in December showed nine out of 10 respondents thought there is “an urgent” need to conduct anti-youth smoking campaigns.

Tik Chi-yuen, the committee chairman, said doubling the tax would provide more resources for the campaigns.

“Currently, each cigarette is taxed 80 HK cents. If you double that it could bring a certain level of deterrent effect as the increased cost make youths more cautious in their consumption, even when they share the cigarettes,” he said.

Tik noted that most youths smoke because of peer pressure as well as copying their idols’ behavior. They still smoke even though they know the habit is detrimental to their health, although an education fund can form a better foundation to discourage smoking.

Thomas Tse Lin-chung, the committee vice chairman, said regional neighbors such as Taiwan, Macau and Thailand, have used part of their tax on education as recommended by a recent World Health Organization report.

He suggested tighter legislation to prevent students in school uniforms to buy cigarettes. Tse also feared youths have been smoking more as the cost of an average packet has actually gone down to HK$29 compared to about HK$31 in 2001.

Li Cheong-lung, the chief executive of the committee, said the survey of 1,008 people found that 87.1 percent believed the issue of young smokers is “serious” or “very serious.”

Four out of five thought the government lacked sufficient effort on the issue, while nearly three out of four believed the government should “sharply increase” the tobacco tax. Another 86.5 percent felt the tobacco tax should be used to fund preventive measures.