It's only fair to share…

Words that can mean different things to different people are much loved by the political and chattering classes. It enables them to say something without having to actually define what they are saying. Terms like “fair” and “saving lives” are bandied about with not much thought or questioning.

Last week in the Australian Federal budget, the tax on tobacco was increased again. By 2020 a pack of cigarettes will cost $AU40. Apparently this will “save lives” say the usual suspects in public health.

There is a bit of a conundrum though.

The logic is that by increasing the price of cigarettes people will find it too expensive and hence quit. By doing this their health will benefit. There is some basis to this. However the government is budgeting that the tax will raise billions of dollars. This in turn suggests that the government thinks people will pay the extra tax. If that is the case then they will not stop smoking and their lives will not be “saved”.

You would think it couldn’t be both at the same time. But therein lies the beauty of these measures. A small number of smokers will probably quit as they are ready to and this is the prod to get them to take that final step. So the public health brigade can find a few people to justify their claim. The vast majority of smokers will just pay more to the government.

Governments claim to have the health of citizens at heart. Yet their actions suggest otherwise. In Australia it is easier to buy cigarettes than e-cigarettes even though the latter are 95% less harmful, as I wrote a few weeks ago.

In the USA the FDA has now deemed e-cigarettes to be tobacco products even though they do not contain tobacco. It also means e-cigarettes will be subject to the same regulations as tobacco products.

As usual this was done in the name of pubic health and the usual suspects all applauded. Back in the real world the value of cigarette manufacturers rose on Wall Street. The market which is far smarter than government can see that this regulation will make it harder to get e-cigs and hence people will be more likely to smoke.

A real boost for public health! The US government also derives considerable revenue from tobacco tax.

A cynic might suggest that protecting tobacco taxation revenue is a higher priority for government’s than helping people to stop smoking.

In the same week the call has also gone out again in Australia for a sugar tax. The same logic applies. Make it more expensive and people will use it less. A few cents added on to a can of soft drink will not stop purchases. And of course, the tax won’t apply to the biggest culprit, high sugar foods with a government four and five star rating because they are low fat.

The rationale is that this will improve health. The actual result is that governments just raise more money, often disproportionately from those who can afford it least.

Even if such a tax were introduced, soft drink makers would likely absorb it. The margins in that business would allow it. Warren Buffet whose Berkshire Hathaway company owns a large slab of Coca Cola notes, quite correctly, that “everyone has a choice about whether to consume more calories than they need and its not Coke’s fault if they do”.

He has a vested interest but he is still 100% correct.

Making the use of e-cigarettes more difficult makes it more likely people will continue to smoke. Giving star ratings to foods with lots of sugar means, unfortunately, that many people will consume them falsely believing they are nutritious.

Taxation in the name of “health” or saving lives” is duplicitous. It underlines the old adage that the only two certainties in life are death and taxes.


Dr Joe Kosterich M.B.B.S is an author, speaker, media presenter and health industry consultant, who wants you to be healthy and get the most out of life. Dr Joe also gives practical, motivational health talks for the general public and organisations where he is known as “An independent doctor who talks about health”.

His latest book “60 minutes to Better Health” is available on Amazon.