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Dáil Éireann debate -
Wednesday, 1 Dec 1999

Vol. 512 No. 1

Financial Resolution No. 2: Tobacco Products.

I move:

(1)THAT in this Resolution—

"the Act of 1977" means the Finance (Excise Duty on Tobacco Products) Act, 1977 (No. 32 of 1977);

"cigarettes", "cigars", "fine-cut tobacco for the rolling of cigarettes" and "smoking tobacco" have the same meanings as they have in the Act of 1977, as amended by section 86 of the Finance Act, 1997

(No. 22 of 1997).

(2)THAT the duty of excise on tobacco products imposed by section 2 of the Act of 1977, shall, in lieu of the several rates specified in Schedule 4 to the Finance Act, 1999 (No. 2 of 1999), be charged, levied and paid, as on and from 2 December, 1999, at the several rates specified in the Schedule to this Resolution.

(3)IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

Schedule

Rates of Excise Duty on Tobacco Products

Description of Product

Rate of Duty

Cigarettes

£80.99 per thousand together with an amount equal to 18.57 per cent of the price at which the cigarettes are sold by retail.

Cigars

£123.465 per kilogram

Fine-cut tobacco for the rolling of cigarettes

£104.186 per kilogram

Other smoking tobacco

£85.655 per kilogram

This resolution provides for excise duty increases on tobacco products with effect from midnight tonight which, when VAT is included, amounts to 50p on a packet of 20 cigarettes with pro rata increases on other tobacco products. This increase is expected to yield £2.8 million this year and £132 million in a full year. It will increase the CPI by an estimated 0.756 per cent.

The Government remains very concerned about the level of smoking, particularly the increase in smoking among the young and the direct cost to the Exchequer because of the adverse health effects. Therefore, the Government has decided that, with effect from 1 January 2000, an amount equivalent to the extra yield from this increase will be paid by the Revenue Commissioners by way of appropriation-in-aid to the Department of Health and Children to help fund the increasing cost of health provision, in particular the national cardiovascular health strategy. It is expected that the significant increase of 50p will reduce projected cigarette consumption below what it otherwise would have been, particularly among young smokers who may be more price sensitive than others.

The contrast between this year's tax on cigarettes and last year's says all that needs to be said about the level of conviction and principle in the Government. Last year this Government of conviction, with an interest in health, increased the tax on cigarettes by 5 p. We said it was not enough, but this Government had no convictions whatever about health or the effect of tobacco. In the past 12 months there has been agitation on this issue. Deputy Shatter produced a report for the Joint Committee on Health and Children on tobacco use and its effects with particular reference to taxation. This Government, reactive as ever, absent of all principle but concerned to go with the flow, switched from last year's position of anything more than 5p being far too much to an equally principled position this year that anything less than a 50p increase would be too little. This Government does not know where it stands on any fundamental question. It changes its policy to suit the way the wind is blowing.

This is emblematic of the Government's underlying approach to all economic and social questions. It has no fundamental economic and social view. It has no view of what the country should look like and it has no sense of direction. Just as it completely reversed the income tax policy of the previous year's budget last year, this year it completely reversed the cigarette tax policy of last year. It has no anchor, centre or direction. It is simply a group of people gathered around a table, happy to be drawing above average salaries, to have their photograph taken, to appear at any openings or closings to which they are invited and very proud of being Ministers and being called "Minister" but with no idea of what a Minister is supposed to do. A Minister is supposed to be someone who ultimately takes political responsibility for setting a country's direction. A Minister who changes direction every 12 months is not really a Minister because they do not have a sense of direction, which is what is fundamentally required of them. This Government does not have a sense of direction. This is not particularly inherent in Fianna Fáil. Many past Fianna Fáil Governments have had a sense of direction – usually one I did not like but a sense of direction just the same.

It is impossible to dislike this Government because its approach is "whatever it is you're having yourself, I'll have that too." If people want no increase in tax on cigarettes tax this year, that is fine. If, next year, people want a big increase in tax on cigarettes, it will also go along with that. The Government is easygoing, accommodating, inoffensive and useless. It is a useless Govern ment in the sense of governing. It is simply presiding over an economy and trimming to take account of needs as they arise.

I support this year's approach to cigarette taxation. I was opposed to last year's approach. Last year I said the 5p tax increase on a packet of cigarettes was insufficient. This year I welcome the 50p increase in tax on cigarettes because it is sufficient and proper. I support it because it is clear cigarettes damage the health, not only of the smoker but those who live and work with them. The evidence of the deleterious effects of smoking and passive smoking on health is mounting. It is clear that cigarette manufacturers have known for a long time that cigarette smoking is addictive and have targeted young people to promote the addiction from an early age. It is a matter of considerable worry that there is an increase in the number of young people smoking. In their 20s and 30s, when they eventually get sense, they must go through the trauma of withdrawal from the addiction.

It is a chemical addiction. It is a physical craving for cigarettes deliberately promoted and created by the cigarette companies to make money. This is all about making money on the back of addiction. We listened to Deputy O'Donoghue promote his policy of zero-tolerance of drug pushers. He is referring to people pushing drugs which in some cases are only moderately addictive but are deemed under current law to be illegal. Last year and the previous year, he had maximum tolerance of people promoting another severely addictive drug, namely, the cigarette. I understand it is more difficult to give up cigarettes than to give up heroin in terms of the withdrawal symptoms. The chemical barrier to be overcome is as great or greater for someone trying to give up cigarettes as for someone trying to give up heroin. The inevitability of death is just as great. Perhaps people die more quickly from heroin addiction. This is probably due to its illegality as much as to the substance itself, given the lack of quality control for needles and so on. Perhaps this aggravates the speed with which people die from heroin addiction. However, people also die from cigarette smoking. It is a matter of the gravest concern that this product continues to be widely available to young people.

There have been many proposals as to what should be done with the tax yield from the 50p increase in the cost of a packet of cigarettes. I draw the Taoiseach's attention to the fact that it is predicted that 23 million people will die in Africa from AIDS. Some 23 per cent of pregnant women in South Africa, one of the most developed countries in the continent, are HIV positive, whereas less than 1 per cent of pregnant women in 1990 were HIV positive. Many businesses in east Africa must provide a large sum of money in their annual budgets to pay for the funerals of their workers. One tea company in Kenya must now pay five times as much in funeral benefit as a result of its workers dying from AIDS. We in this country have lived in an aura of victimhood since the famine. Some one million people died on this island within two years and we believe the world ignored this. Many people throughout the world were not aware of what was happening. There was no Sky television in 1847. We now know that 23 million people will die from AIDS in Africa. We also know that treatment for AIDS is available which will cost as much as an average South African worker earns per week. In other words, in order to prevent themselves from dying, an average South African worker infected with AIDS must spend as much on retroviral treatment as he earns in the week and have nothing left. The surplus money we possess should go towards reducing the cost of AIDS treatment in Africa, not in Ireland, because this is a prosperous country. We should use this money to help the poorest of the poor. I recall the speeches made on the pro-life issue.

Acting Chairman

The Deputy will be aware that this resolution is on the excise duty on tobacco products.

I am aware of that. I am making a suggestion as to how the Revenue might be applied. I accept and will adhere to the stricture. That is my suggestion as to what might be done with the money. I welcome and support the measure.

I have mixed views on my eighteenth budget debate. This is the first year in which my region has escaped petrol taxation. The benefits of the lower cost of that product in the Border area can be appreciated by anyone who wishes to open his eyes. As a Dundalk man, in previous years I would have had much to say about the continued onslaught on the cigarette industry because at one stage Carrolls employed 900 people. Today that number has decreased to 57. It has been evident for many years that the bell has been tolling for that industry and I understand the reasons for this. The increase of 50p per packet of cigarettes is excessive but I have no real problem with it. I have, however, a problem with the hypocrisy shown in this House, not just by the present Government but by all Governments, my own included, towards the total exclusion of the drinks industry. There is a benign protectionist attitude to the drug which kills more people and wreaks havoc in more families than any other drug, that is, alcohol. There is not a family that has not had severe alcoholism visited on them. Almost 90 per cent of social problems are identified with the drug we all refuse to acknowledge, namely, alcohol. The extent of teenage drinking is dreadful. Official figures suggest that children begin drinking at 12 years of age. The lives of many teenagers are destroyed as a result of drinking. Many young girls become pregnant and are deserted by the offending partner who walks away into the night, having visited a public house before having his fun. People in public life refuse to acknowledge this fact.

Acting Chairman

The Deputy will be aware that this resolution is on the excise duty on tobacco products.

I am contrasting the hypocrisy of penalising the use of one drug, and rightly so, while being protectionist towards another drug which destroys more families than cigarette smoking. Because of the acceptance of drink, which permeates society at every level, including in this House, we will continue to be patronising because of the money involved and because of the fact that it is not considered politically correct to home in to try to save young people from the excesses of alcohol. I am not advocating prohibition but I am saying that we should get wise and recognise that our young people deserve better. I am asking for a degree of honesty in this House when debating drugs.

I welcome this measure. Notwithstanding what the previous speaker said, I think cigarette smoking is a particular problem because, apart from its effects on smokers, it has a direct impact on people through passive smoking. It is important to put disincentives in place to ensure people's health is protected.

In this instance, I am highly critical of the approach being adopted in relation to any serious effort being made to reduce the level of cigarette smoking in Ireland.

There is a high level of smoking in Ireland. Deputy Shatter did an excellent job in preparing a strategy for the Oireachtas Joint Committee on Health and Children, outlining a package of measures that could be introduced and developed by the Minister for Health and Children to ensure that smoking was combated and that there was real progress made in reducing the level of smoking. Sadly there is no indication that the Minister has the slightest intention or interest in the strategy or in developing it through his Department.

This measure could be read not as an anti-smoking one but as an easy route to get funding to pay for the cardiovascular strategy that was announced some time ago by the Minister and obviously needs to be resourced. If this is simply a way of getting extra money into the health budget it will not have the impact on smoking that is required nor will it have a reductive impact on the number of people smoking. We must have a targeted approach and ensure the work that is done is effective. We have seen too many health promotion campaigns that have missed their target and have been a waste of money. There is always the likelihood that the people who pay attention to the campaign are those who do not need the advice, the anxious healthy as they are known in the trade.

It is clear that among young people there is a serious and growing phenomenon of smoking and that must be addressed by the Government. Those with medical cards are not assisted to give up smoking. Nicotine patches, one of the few aids that have proved their worth, are not available. Those who are poor cannot access the kind of preventive measure that would make an outstanding difference to their lives. This budgetary measure will impact on the poor in a particular fashion. It will have a major impact on those who are on low incomes and are addicted to smoking. The classic example is taken of the lone mother isolated at home with a young baby. The only pleasure she has in life is her cigarettes. One in three young mothers suffer from depression to some degree. For many of them smoking is a means of getting through a stressful, difficult and often lonely time. This measure will not change their lives, if anything it will make it worse.

Looking at the budget in general, one thing you should not be is a woman. You should not be poor and you should certainly not have children. If you are a woman, poor and have children the message from this budget is you do not matter. The whole thrust of this budget is driven by the market. It is about forcing women out to work, away from their families and children and forcing people on social welfare into the workforce whether or not they are able to work. An increase of £4 in social welfare is incredible –

Acting Chairman

I remind the Deputy that we are dealing with the excise duty on tobacco products and she should confine her remarks to that as time is limited.

I have great respect for the Chair but if he had listened to the rest of my sentence he would have understood the significance of what I was saying. For someone on social welfare who is addicted to smoking an extra 50p on a packet of 20 cigarettes is a huge amount of money. Those in this House who smoke may not feel price is the biggest factor but it is for those on social welfare. It is not always easy for people to kick the habit. It is a serious and deep-seated addiction. We must recognise that. Most of the £4 increase will be gobbled up in differential rent increases. That is how local authorities and the system works, give with one hand and take back with the other. We all know we will have people coming to us in our clinics, some smoking and others not, saying that whatever miserly increase they got in the budget is going on differential rents.

This was an opportunity for the Minister for Health and Children to do something real about what is a grave cause of sickness and death. There are 37,500 people on waiting lists. Many of them have cardiac problems caused by smoking. There is a high cost involved as a result of smoking. We are all aware of that but the Minister added thousands of people to the waiting lists by not preventing the nurses' strike.

Acting Chairman

The Deputy might resume her seat. The time permitted for this debate having expired I am required to put the following question in accordance with an Order of the Dáil of this day: That Financial Resolution No. 2 is hereby agreed to.

(Dublin West): On a point of order, 40 minutes was set aside for this discussion.

Acting Chairman

There were 70 minutes for the two motions.

(Dublin West): Thirty minutes was taken for the first discussion. The Chair is railroading the Dáil.

Question put and agreed to.

(Dublin West): It is not agreed. I oppose the resolution. This is outrageous.

Acting Chairman

I call on the Taoiseach to move Financial Resolution No. 3.

(Dublin West): It is undemocratic. The Chair railroaded the Dáil.

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