Tobacco tax increase flagged as possible revenue option for Federal budget

Treasurer Scott Morrison says he cannot deliver both company and income tax cuts in one budget at the same time some MPs say they are open to increasing the tax on tobacco as an income stream.

Addressing a conference in Melbourne this morning, Mr Morrison said keeping the budget under control was not an end in itself.

He said it should be used to deliver tax cuts to drive innovation.

But when asked whether he would set out a path to personal and income tax cuts in the budget, he said he could not.

"Well of course all of that... can't be done in one budget," he said.

"It has to be done as I said at the end, budget after budget after budget, and I think if there's an expectation that every single one of those boxes are able to be ticked in one budget, that's unrealistic."

Increase in tobacco excise firms as possibility

Meanwhile, lifting the excise on tobacco has emerged as a potential revenue option.

The Opposition has already announced it would have four increases in tobacco excise of 12.5 per cent each, which would raise nearly $4 billion over the forward estimates and around $48 billion over the medium term.

Some in the Coalition who campaigned hard against a GST increase said they would be prepared to accept a higher tobacco excise, but wanted it to be a lower increase than Labor had outlined.

That group is suggested four increases of 10 per cent would raise around $30 billion over the medium term.

LNP backbencher Ewen Jones said the idea had not been raised with him, but argued smokers cost the health system a huge amount of money.

"If you're a 25-year-old and you're single and you smoke you have no tax deductions and you're paying an awful lot of tax," he said.

"But if you're 65 and you're in hospital getting bits and pieces chopped off you, you owe the taxpayer."

Former prime minister Tony Abbott recently described Labor's plan for cigarette tax as a "workers' tax".

Labor senator Joe Bullock raised a similar concern when his leader Bill Shorten announced the ALP's policy, arguing that the party would be hurting its own voters.

Source: ABC News

Leave a Reply

Your email address will not be published. Required fields are marked *