Tax windfall should be used on smoking campaign

23/8/02
The Gallop Government has called for a $240million tax windfall to the Federal Government from smokers to be used to help more smokers kick the habit.
The call comes from Consumer Protection Minister John Kobelke and Health Minister Bob Kucera following a High Court ruling in 1997.
The ruling was that State wholesale tobacco licensing fees were unconstitutional. However, during a limbo period of five weeks, tobacco companies collected fees from retailers but did not pass the money on to the State Government.
"This created a national windfall of about $240million for tobacco companies," Mr Kobelke said.
"In December last year, the High Court ruled that the fees collected by the wholesalers in the five week period should be repaid to the retailers. A class action is now under way on behalf of the retailers who paid the excess fees in 1997.
"But retailers have already recovered the fees from consumers by including this amount in the price of their cigarettes. If the retailers are able to recover all the money from the wholesalers they will be double-dipping."
Mr Kobelke said it was unfair for tobacco companies to keep the money, unjust that wholesalers are repaid and impractical to try to return the money to the individual consumers.
Mr Kucera said cigarette smoking was the major cause of preventable drug-related death and disease in Australia and a major risk factor in heart disease, stroke, respiratory diseases, asthma, cancers, low birth weight babies and sudden infant death syndrome (SIDS).
British American Tobacco reported an after tax profit in the year 2000 of $93million, yet it is currently one of the beneficiaries of this windfall.
"To stop retailers being compensated twice or wholesalers retaining the money collected unlawfully, the Gallop Government is writing to Prime Minister John Howard proposing the franchise fees be returned to consumers," Mr Kobelke said
Mr Kucera said the money should be given to State and Territory Governments as grants on a per capita basis to use on tobacco education campaigns such as the Quit campaign.
"The Gallop Government wants this money to be spent on helping smokers quit and educating children not to take up the habit. This should be a windfall for public health - not the tobacco industry and retailers," he said.
Minister's office: 9222 9211