25 May 2012

Tobacco excise tax increase passes first reading

6:26 pm on 25 May 2012

Parliament has unanimously supported the first reading of legislation that will steadily increase the price of cigarettes and tobacco products.

The excise tax will increase by 10% a year beginning on 1 January 2013 for the next four years, in addition to the annual inflation-indexed increase.

That will increase the price of an average pack of 20 cigarettes to more than $20 by 2016.

The Government expects the tax increases to raise $528 million over four years.

Some $20 million will be provided to a new fund, Pathway to Smoke-Free 2025, to fund programmes to discourage people from taking up smoking and to help smokers quit.

Parliament's Finance and Expenditure select committee will hold public consultation hearings on the legislation.