Australia: Fall in Smoking Rates Frees up Preventive Health Funds

Source from:  The Australian (au)  05/16/2014

Treasury　expects demand for cigarettes to fall faster than forecast when Labor ushered in plain packaging and higher prices, allowing the Abbott government to scale back preventive health efforts and partly compensate for the loss of $500 million in tobacco excise this year alone.

In the midyear review, the government was still expecting to raise $8,350 million in tobacco excise this financial year, but that figure has now been revised down six per cent, to $7,850 million. The Budget has also penned in another $400 million reduction to its forecasts for 2014-2015, to only $8,710 million, due to "lower expected clearances of tobacco'', which suggests a significant drop in demand given the excise rate was increased 12.5 per cent in December and is scheduled to rise by the same amount in September this year and the following two years. Enditem