Senator REYNOLDS (Western Australia) (10:28): I too rise to speak in support of the Excise Tariff Amendment (Tobacco) Bill 2016 and the Customs Tariff Amendment (Tobacco) Bill 2016. These bills will increase tobacco excise charged on domestic production and customs duties charged on imports with four annual increases of 12.5 per cent a year from 2017 until 2020. There will be no direct impact on tobacco companies from the staged excise and customs duty increases—these will occur on the same day as the usual indexation changes.

In addition, adult average weekly ordinary time earnings based indexation of tobacco excise rates will continue. The next biannual indexation of tobacco excise will occur on 1 March 2017. From 1 September this year, the excise and excise equivalent duty rate on tobacco is around 61c per stick and $763.20 per kilogram of tobacco content. This equates to $15.26 in excise on a packet of 25 cigarettes, which currently retail for approximately $25.

Together, these bills will raise $4.59 billion across the forward estimates period. Goods and services tax receipts are estimated to increase by $430 million over the same period. The excise increase announced in the 2015-16 budget are firmly based on the evidence that this will further help reduce smoking and will replicate the annual increases that were put in place from 2013 through to 2016.

As my colleague Senator Paterson has noted, tobacco is a ‘legal product’ in Australia and people choose to smoke, noting that there are health consequences for both themselves and others around them. Smoking today is recognised as the largest single preventable cause of death and disease in Australia. It is associated with an increased risk of heart disease, stroke, cancer, emphysema, bronchitis, asthma, renal disease and eye disease. Tobacco contains the powerfully addictive stimulant nicotine, which can make smoking a regular and long-term habit that is pretty hard to quit. Each year in Australia, smoking kills an estimated 15,000 Australians and costs Australia $31.5 billion in social, health and economic costs. In Western Australia alone, own home state, over 1,500 people a year die from smoking-related illnesses.

The Turnbull government is greatly concerned about the serious health risks of smoking and it has continued the efforts of previous governments to support and build on Australia’s great success in tobacco control. In recent years, the negative effects of passive smoking have also received considerable attention; demonstrating that the risks of smoking affects more than just the individual smoker. Passive smoking increases the risk of heart disease, asthma and some types of cancers. It may also increase the risk of sudden infant death syndrome and may predispose children to allergic sensitisation.

The increase in excise and duty will move Australia toward the World Health Organization’s recommendation that excise should comprise 70 per cent of the price of a cigarette. Increasing the price of tobacco products through taxes is widely recognised as the most effective and the most cost-effective tobacco control intervention for reducing tobacco use, particularly amongst our young and those from lower socioeconomic communities. In Australia, the 2010 post-implementation review, conducted by The Treasury, for the 25 per cent tobacco excise increase estimated that an 11 per cent decrease in tobacco consumption over two years had resulted. The 25 per cent tobacco excise increase had resulted in an 11 per cent decrease in smoking in Australia.

As reported in the WHO report on theGlobal tobacco epidemic, 2015, as of mid-2014 there have been two 12.5 per cent excise increases as well as biannual increases in excise and Australia was ranked sixth highest for total taxes applied to cigarettes amongst 106 countries who reported to the World Health Organization. The taxes also accounted for 47.67 per cent of the total retail price of the most popular brands of cigarettes, which in Australia is a Winfield 20-pack. Also, Australia’s taxes applied to cigarettes gave Australia the seventh highest after-tax cigarette price in the world. I think it is clear that it has been proved that higher prices encourage smokers to quit or, at least, reduce their consumption, while also discouraging potential smokers including in particular young Australians from taking up smoking.

These two bills will support Australia’s domestic and international commitments to reduce the prevalence of smoking in Australia and thus minimise the harm of smoking to the entire Australian community. These particular changes sit alongside numerous other interventions the Commonwealth has taken to reduce the prevalence of smoking. Firstly, the Commonwealth has adopted a comprehensive ban on tobacco advertising and promotion. They have also legislated for retail display bans, Pharmaceutical Benefits Scheme subsidies for smoking cessation supports and have funded extensive and continuing public education campaigns here in Australia.

In any health-related campaign, it is always to helpful to review and understand the statistics, the context and the trends that they highlight. In Australia, the facts are as follows: in 2011-2012, the Australian Health Survey reported that approximately eight million Australian adults aged 18 years and over had smoked at least some time in their life. In 2011-2012, 3.1 million people were still current smokers, with the vast majority—90 per cent of that 3.1 million people—smoking daily. Between 2001 and 2011-12, the overall rates of smoking had decreased for both males and females. The age-standardised rate of current smokers for males aged 18 and over fell from 27 per cent in 2001 to 20 per cent in 2011-12. For women, it declined 21 per cent to 16 per cent. Those figures, over the course of a decade, are very significant decreases. During 2007-2008, 3.5 per cent of people who were not current smokers aged 15 years and over and 7.2 per cent of children aged under 15 years lived in a household where a daily smoker was reported to have smoked indoors. This exposes environmental tobacco smoke and passive smoking to a significant percentage of young Australians.

The Australian government’s tobacco control strategies, such as mass media public education campaigns, high tobacco taxes, advertising bans and smoke-free environment legislation have helped with the steady decline in smoking rates over decades. I think the statistics on that are very clear. Between 1991 and 2010, the proportion of daily smokers aged 14 years and over decreased by almost 40 per cent. I will say that again, because that is a really significant statistic: between 1991 and 2010, the proportion of daily smokers aged 14 and over decreased by almost 40 per cent. In 2011 and 2012, five per cent of males and nine per cent of females aged 15 to 17 were current smokers. After 18 years, the legal age for purchasing tobacco products in Australia, the rate rose significantly for both men and women, reaching 22 per cent for men and 17 per cent for women aged 18 to 24 in 2011 and 2012.

Rates then remained steady for men up to around the age of 55 and for women up to 65; whereupon after those ages for both men and women the rates significantly declined. So eight per cent of men and seven per cent of women aged 65 years and over were smokers in that same period, 2011-12. There was little change in smoking rates for men and women aged 45 to 54 years and women aged over 55 years during this period. However, interestingly, for men, there were significant declines over this period in the 55- to 64- and 65 years and over- age groups respectively. Between 2007 and 2011, the rate of smoking among men, or boys, aged 15 to 17 decreased from nine per cent to five per cent, while the rate for females did the complete opposite; they increased from five per cent to nine per cent for young girls between 15 and 17.

For Indigenous Australians the smoking rate has consistently been higher than for the rest of the Australian population. In 2008, 49 per cent of Aboriginal and Torres Strait Islander Australian men aged 18 years and over were current smokers. So 49 per cent of men over 18 in Indigenous population were smokers. This was, for the time, significantly higher than the number of Aboriginal and Torres Strait Islander women of the same age who were current smokers, which was 44 per cent—but still much higher than the national average. Between 2002 and 2008, the rate really had not changed at all. For both men and women, the proportion of Aboriginal and Torres Strait Islanders who were current smokers between 2002 and 2008 was lowest in the 15- to 17-year age group. That is again very interesting. It was actually lowest in the 15- to 17-year age group, but it was still much higher than the national average. In the 15- to 17-year age group it had decreased from 33 per cent to 21 per cent—a very significant decrease.

While, as I said, tobacco is legal in Australia, it is important that the government continues to aid the reduction in smoking rates and it is equally important to ensure that we support and explore alternatives for smokers, and I believe today that includes looking much more closely at e-cigarettes. In April last year, on behalf of the Intergovernmental Committee on Drugs, the Australian government Department of Health engaged the University of Sydney, in partnership with the Cancer Council of New South Wales, to conduct a longitudinal project to explore options to minimise the risks associated with the marketing and use of electronic nicotine delivery systems, with or without nicotine, here in Australia. This project is due to culminate in the preparation of a national discussion paper this month. Public dissemination of this discussion paper will be a matter for federal, state and territory governments. I very much look forward to the release of that document and engaging in the debate and discussion on safer alternatives to smoking. I commend the government for taking steps to explore the use and safety of e-cigarettes. The Australian government Department of Health review will inform the development of regulatory and non-regulatory policy options for consideration by Commonwealth, state and territory governments in this nation.

To me, there is absolutely no doubt that the use of e-cigarettes is a healthier option for people looking to stop smoking, with nearly three million people in the UK alone now using e-cigarettes today. I think it is very instructive for us here, as we have a look at alternatives to cigarettes, to look at the experiences of other countries with alternatives such as e-cigarettes. A recent note by the UK parliament observed that there is evidence showing that the use of e-cigarettes can assist people to quit tobacco smoking. The first generation of e-cigarettes, which were called cig-a-likes, resembled tobacco cigarettes. They became widely available in the UK in the mid-2000s and were usually disposable. The second-generation products typically resemble fountain pens, and are rechargeable, with a replaceable cartridge or refillable tank. The most recent third-generation products are typically much more diverse in look and feel. These are also rechargeable and have a refillable tank. Users can modify power and resistance to adjust nicotine delivery and vapour density. Users can also download software to monitor their own personal usage patterns and can tailor the devices aesthetically for their own personal style and comfort. Later e-cigarette products offer more efficient nicotine delivery than first-generation products. Some are comparable to tobacco cigarettes in terms of the blood nicotine concentration that they deliver. However, nicotine delivery remains much, much slower than traditional tobacco cigarettes.

Public health concerns here and overseas around e-cigarettes have focused on vapers and the inhalation of vapour and bystanders’ passive exposure to the vapours from e-cigarettes. The inhaled and exhaled vapour varies depending on device characteristics and user behaviour. But, again, as Senator Paterson has noted, the health impact is much less for people in the vicinity of those using e-cigarettes than for people in the vicinity of those using traditional cigarettes. There have also been concerns about possible adverse health effects for the user from inhaling vapour that can contain propylene glycol, glycerine, nicotine, flavourings, metallic elements and carcinogenic substances. Since 2014, there has been a great deal of research into vapour content. The amount of chemicals inhaled, rather than their presence alone, is an important determinant of toxicity, and current data suggests that the levels of toxins and contaminants in inhaled vapour do not pose significant health risks. The consensus is that long-term health risks to vapers require monitoring but are ‘unlikely to exceed five per cent of the harm from smoking tobacco’. Passive smoking health risks to bystanders are much smaller again with the use of e-cigarettes, as current evidence shows that the levels of nicotine and contaminants released via exhaled vapour are negligible.

So I commend the Turnbull government for continuing to support the reduction measures for smoking. But it is also important that we continue to provide smokers with the support and motivation they need to kick the habit when they are ready to do so. I am pleased that the revenue gained from higher tobacco excise will be put to good use by the government to continue to fund and provide a range of services, including health and other support measures.

These measures support the national approach through the Council of Australian Governments to reduce the prevalence of smoking in Australia. The adult daily smoking rate was 14.5 per cent of the population in 2014-2015. I have gone through some of the statistics, and that is a very significant decrease over the last decade. In 2008, all states and territories, through COAG, committed to reducing the adult daily smoking rate to 10 per cent of our national population and to halving the daily rate of smoking amongst Aboriginals and Torres Strait Islanders by 2018.

Ongoing tobacco interventions, including these excise increases, are critical to ensuring that the prevalence of smoking in Australia continues to decline. It is incorrect to assume that the rate of reduction of smoking prevalence can be maintained without additional tobacco control efforts. Evidence from Australia and overseas shows that, when tobacco control efforts stall, so does the decline in smoking prevalence and there is an increase in health consequences.

So, for all of those reasons, I commend these bills to the Senate today.