Saturday, April 19, 2014

Attack on tobacco availability in ACT is wrong and sure to fail

Recent proposals for tobacco control are another instance in a long line of paternalistic, yet futile, attempts by political elites to force their preferences upon everyday Canberrans.

To great fanfare last year, ACT Health Minister Katy Gallagher launched the report Future Directions for Tobacco Reduction in the ACT 2013-2016 to coincide with World No Tobacco Day.

Following that release, a discussion paper canvassing options for restricting access to tobacco was distributed for public comment with a range of suggestions all intended to conform with a Council of Australian Governments objective to reduce smoking prevalence in Australia to 10 per cent by 2018.

In essence, there are two key ideas in the discussion paper intended "to minimise tobacco-related harms through a reduction in tobacco product availability".

The first is that existing tobacco licence holders, and prospective ones, should be liable for a significant escalation in the annual licence fee:  the current $200 would increase in future by increments of $200 or even $500 a year.  The discussion paper suggested that fee indexation could also apply, to provide "an incentive to a licensee to give up the license to sell tobacco".

The second is that a new regime of access restrictions would be added to the already prescriptive regulatory regime surrounding the sale of tobacco products in the ACT.  Some options presented include introducing a "fit and proper" person test for holding a tobacco licence upon application, and to restrict the time of day in which the sale of tobacco can actually occur — say, from 8.30am to 5pm, or two periods during a given day.

In addition, the proposal has been publicly canvassed to limit the amount of tobacco that customers can buy in any one transaction — ranging from, say, a single pack to a carton of cigarettes.

But the assertion made in the paper that these proposed policies would reduce tobacco consumption across Canberra is laughable, as it ignores the incentives of people to avoid highly discriminatory fiscal or regulatory treatments.

Recent research for Australia alludes to a discernible growth in the illicit tobacco market.  A report by consultancy KPMG says the share of tobacco consumption attributable to non-taxed, illicit products is close to 14 per cent.

The consumption of counterfeit, contraband or unbranded loose cigarettes has risen, although 70 per cent of the price of a legal pack is comprised of federal excise and plain-packaging laws have been ineffective in stamping out the illicit trade.

For a small, landlocked jurisdiction such as the ACT, it would appear highly likely that any measures to greatly restrict legal cigarette sales within Canberra would be easily nullified by a simple car drive across to Queanbeyan, Yass or elsewhere over the border.

And what would prevent people involved in the illicit tobacco trade from pocketing a healthy return for themselves, should the ACT government decide to try to restrict cigarette sales to certain times of the day?

The government places great weight on a paper first published last year, in the Tobacco Control journal, which claims South Australian moves to radically increase tobacco retail licences from $12.90 to $200 a year subsequently cut the total numbers of licences held.

While the conclusions of the study are debatable, given the lack of control variables — such as the effects of the 2008-09 global financial crisis on business entries and exits — the study did acknowledge that tobacconists might be harmed more severely than multi-product tobacco retailers, such as supermarkets and petrol stations.

If tobacco licence fee hikes, or restrictive licence quotas, were to be applied, this would greatly harm the continuing prospects of small-scale specialised tobacconists, relative to the already well-established supermarket chains in Canberra, that can more readily accommodate the consequences of any proposed changes put into effect.

When all is said and done, it seems the ACT government is locked in to a predetermined position, borne by a distaste of smoking practices enjoyed by a declining, but still considerable, cohort of Canberrans, regardless of the consequences.

The Gallagher government appears not to have paused to consider its policy settings in light of the experience of Canberra's own fraught history of paternalistic controls on certain lifestyle products, either.

In 1910, firebrand parliamentarian King O'Malley persuaded the federal government to issue an ordinance prohibiting the sale of alcohol in the Canberra area, thus enforcing his personal teetotalling preferences upon 1700-odd residents at the time.

But even O'Malley baulked at the idea of restricting the distribution and possession of alcohol in the Federal Capital Territory, given that wet Queanbeyan was right at Canberra's doorstep but under NSW state jurisdiction.

You don't see similar wisdom pervading the Gallagher government discussion paper on tobacco control, though, which implicitly, yet foolishly, treats the ACT as having closed borders.

The shipment of alcohol from NSW, and the subsequent enjoyment of these beverages within the ACT, meant that, according to a 1927 Canberra Times article on the "liquor farce", "liquor pours into the territory night and day".

O'Malley could initially persuade the then territories minister to impose a prohibition on local alcohol sales, but the paternalistic policy could not withstand the hordes of thirsty federal politicians and public servants relocating from Melbourne over a decade later.

Following a local referendum on the matter in 1928, one of the first actions of the federal government in the new Parliament House at the time was to end Canberra's alcohol prohibition law.

Surely much to the chagrin of O'Malley, who had long departed from the political scene by that stage, the repeal of prohibition struck a positive blow for freedom, as local hotels, clubs and "alcohol cafes" enjoyed the right to sell brew to Canberrans.

In advocating stringent restrictions on tobacco availability, the ACT government risks a repeat of the futile early 20th century alcohol prohibition exercise, thereby failing in meeting its own contemporary policy objectives.

The tobacco control proposals should be seen for what they truly are:  an illiberal attempt to impose arbitrary political preferences on ordinary citizens.

Although most Canberrans today are non-smokers themselves, it would be no foregone conclusion that, if they had a direct vote, they would restrict the freedom of smokers to continue legally indulging their harmful habits.

After all, not only did the people of Canberra vote in favour of ending alcohol prohibition, but they later voted against the very self-government that has since sought to impose nanny-state paternalism upon them at every turn.


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