Smokers underestimate cost impact as research shows prices starting to bite

Posted 30 May 2016.

Monday, 30 May 2016

Double the number of smokers actually quit or reduced their smoking compared to the percentage who anticipated an impact of price rises on their smoking. And quitting now might be like an $18,000 pa pay rise.

Ahead of World No Tobacco Day tomorrow (31 May 2016), Cancer Council Western Australia has released the results of a survey conducted of smokers before the first round of price increases in 2013 which asked them to predict how they thought a price increase would affect them.

Smokers were then subsequently asked in 2014 and 2015 how the price increase actually did affect them.

Cancer Council Education and Research Director Terry Slevin said there was a clear difference of perception versus reality.

“The actual effect was twice as large as smokers predicted – only 20 per cent thought it would make a difference to them, and in reality the price increases have made a difference to 40 per cent of smokers surveyed,” Mr Slevin said.

“With another round of tax rises due to commence on September 1 this year we hope those who are continuing to smoke will make the call early and see the sense of kicking the health and wealth sapping habit.

“The good news is once that happens, they’ll potentially be freeing up to $14,000 a year to spend on other things.  That may be anything from money for better holidays, speed up knocking over the mortgage, or up to $14,000 more potentially to help with household bills,” Mr Slevin said.

He said the price of cigarettes is set to balloon out to almost $40 per pack by 2020, which will cost pack-a-day smokers over $14,000 a year to sustain their deadly habit.

This means smokers on the average wage will need to earn an extra pre-tax salary of approximately $18,000 to meet the cost of smoking.

“And who would not want a $18,000ps pay rise?”

The latest price increase is the outcome of a commitment by both major political parties to increase tobacco excise by 12.5% each year from 2017 to 2020 ahead of the upcoming July 2 Federal Election.

It extends an existing commitment by the current government to increase tax annually by 12.5% from December 2013 to 1 September this year.

There are 250,000 smokers in WA, and up to 160,000 of them will die due to a smoking-caused disease if they don’t quit.

“Smoking cuts smokers’ lives short by 10 years on average, but as soon as you quit your body begins to repair itself, so not only will you save money but you’ll be a lot healthier as well,” Mr Slevin said.

ACOSH President Maurice Swanson said increasing excise is the single most effective strategy for government to reduce premature death due to smoking, with evidence showing the increase in excise in 2010 (25% increase) resulted in an 11% fall in tobacco consumption.

“Research shows that higher taxes are especially effective in reducing tobacco use among lower-income groups and in preventing young people from starting to smoke.

“It’s estimated the proposed increases from 2017 to 2020 will result in 320,000 current smokers quitting over the next four years and 40,000 teenagers deterred from taking up smoking.

“Cigarettes are only going to get more and more expensive. World No Tobacco Day is a great opportunity to draw a line in the sand and quit.

“’Now’ has never been a better time to quit smoking,” Mr Swanson said.

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