Public Health (Standardised Packaging of Tobacco) Bill 2014 [Seanad]: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

I welcome the continued involvement of the Minister for Children and Youth Affairs, Deputy James Reilly, in this issue. He sponsored and promoted the Bill during his term as Minister for Health. In many ways, it overlaps with his new departmental portfolio because it is very important that we encourage children not to engage in the filthy habit of smoking. I am proud to say this Dáil, under the guidance of the Minister for Health and the Minister for Children and Youth Affairs, has made significant progress in fighting the tobacco industry in this country. Upon enactment of this legislation, Ireland will be poised to become only the second country in the world to introduce standardised tobacco packaging as a measure to combat smoking. We are leading the way internationally in the fight against an extremely harmful drug that is deeply rooted in our society. In fairness to the party opposite, Fianna Fáil, it did a considerable amount when in government to make progress in tackling this serious problem. The smoke is clearing, so to speak, and we can now see our way towards having a tobacco-free Ireland by 2025, which is the vision of the Government.

Many in the House and beyond were sparing in their praise of Deputy James Reilly during his term in office as Minister for Health, but even his most ardent detractors must applaud the determined efforts that have brought us to this stage in the fight against tobacco. His work will have a lasting impact on the health of the nation. Although it might be overshadowed by some of the Government's significant economic achievements, it will ultimately constitute a very important part of its legacy, including that of the former Minister for Health and current Minister for Children and Youth Affairs, Deputy James Reilly.

This initiative is part of the Government's broader programme of reform which aims to overhaul radically the health service. There is a lack of appreciation of the merits and scale of that challenge, not to mention a lack of appreciation of the fiscal constraints within which it is being undertaken. The Minister for Health, Deputy Leo Varadkar, is in the unenviable position of embarking on the most ambitious programme of reform of the health service since the foundation of the State, against a backdrop of drastically reduced resources.

It is important to note that since 2008, almost €2 billion has been taken out of the health budget and the numbers employed in the health service have fallen by in excess of 14,000. No other Department has had to face these types of cuts. The budgets of some Departments were increased. I support the calls of the Minister, Deputy Varadkar, for a neutral budget for 2015 - for the projected outturn for this year to be matched in terms of his budget allocation for 2015.

I believe there is an inadequate understanding of the predicament concerning the Department of Health, whether that is because the message has been poorly communicated or has been misrepresented. For instance, much has been made of late of the overruns in budgets, but these have always been a feature of Department of Health budgets.

I welcome this important legislation and commend the Minister for Children and Youth Affairs for his work in this regard.

I welcome the opportunity to speak on this Bill, which proposes to make mandatory the plain packaging of cigarettes. I see this as a significant and legitimate public health measure.

We have a significant track record in this area and I pay tribute to a previous Minister for Health, Deputy Micheál Martin, who introduced the smoking ban in public houses. That was the first step along this difficult road. Make no mistake about it, but we are dealing with influential business concerns, deep pockets and people who will go to the end of the road to bring legal challenges to this measure. The Government must be prepared for that challenge. I have read up on the experience in Australia and on the behind the scene manoeuvres the tobacco industry there made to try to undermine the Australian Government's endeavours in this regard. We see shades of that happening already in the debate here.

This is a legitimate public health measure. It is interesting to see people in the Public Gallery today who stand to benefit most from this public health agenda, the children of the nation. There is ample evidence to suggest that the slick, sophisticated marketing employed by the tobacco industry is aimed at the younger generation in particular. We need to ensure we resist and forswear all efforts, legal and otherwise, to undermine this legitimate public health measure. That we have got to this stage is testimony to the Government's intent to ignore the bully boy tactics of the tobacco industry and I wish the Minister well in piloting this legislation through the House.

On a related public health issue, I urge the Minister to turn his attention now to the harmful impact the excessive consumption of alcohol inflicts on the public health and purse. I know this is an issue that is of concern to him, both in his professional capacity as a GP but also in his previous capacity as Minister for Health. Welcome as this legislation is, it is illogical that the Exchequer is raped on an annual basis to the tune of €21 million by the continuing licence to sell alcohol below cost. This is an absurd taxpayer subsidy to the drinks industry. I regret that the Government seems to be abdicating its responsibility currently in respect of minimum pricing for alcohol, until such time as we have an EU Commission ruling on the Scottish proposals. However, I suggest as in interim measure, the Minister could, at the stroke of a pen, reintroduce the groceries order to target specifically the below cost selling of alcohol. This would send a clear signal that we are serious about public health measures.

I am aware of ongoing efforts to conclude a transatlantic trade agreement between the EU and the US, but it is important we ensure that within that agreement we leave no loophole or backdoor that will allow the tobacco industry to sue the State in respect of proposals we have in regard to this plain packaging legislation. I note from the Australian experience that the large tobacco companies there moved their business interests, via a Hong Kong-Australia trade agreement, to Hong Kong to avail of an opportunity to sue the Australian Government. In any legal dispute, legal opinion will be available to suit the client, but notwithstanding the tobacco company endeavour it is believed the Australian Government will succeed with its measure.

Concerns have been raised by the tobacco industry and tobacco retailers, who no doubt are being funded by the tobacco industry to make their case, that all this Bill will achieve will be to drive the purchase of illegal, non-duty paid cigarettes. There is a significant loss to the Exchequer from non-duty paid cigarettes. In 2010, some 128 million illegal cigarettes were seized by Revenue. Unfortunately, the detection rate of the illegal trade has reduced significantly over the years. I do not know whether this is an issue of resources in the Revenue Commissioners or Customs and Excise or whether it is an issue of Garda resources. Detection dropped consistently from 128 million cigarettes in 2010 to 109 million in 2011, 95 million in 2012 and in the region of 40 million in 2013. This is a significant drop in detection rates of illegal cigarettes. Those of us who walk the streets of the capital, particularly the streets off O'Connell Street, will see street sellers selling illegal cigarettes. We need to confront these people because this activity fuels illegal activity, criminal gangs and paramilitary organisations which have been responsible for most heinous crimes.

We need to deal with this issue and must ensure we provide the additional resources required where necessary, whether that means more gardaí on our streets to confiscate these cigarettes or more customs officers at our airports and ports. I commend the endeavours they make currently in this regard, but if there is an issue with regard to resources, the State must be prepared to provide those resources. Grant Thornton suggested that the illegal trade in cigarettes costs the Irish economy approximately €700 million a year. I cannot verify the accuracy of that figure, but it is a significant amount. Think of what we could do with those moneys.

We are in the run up to the budget and pleas are being made to the Minister from all sides on these issues. I would support a further increase in excise duty and VAT on cigarettes. It is a public health issue and while it is price sensitive, we must take into account the illegal trade in cigarettes and make every effort to ensure adequate resources are put in to tackle that. I am glad to have had the opportunity to comment on this issue. I wish the Minister well but have no doubt the Government will come under continuing significant pressure to water down, amend or drop this legislation. I urge them not to do so.

I urge the Minister to take up the issue of the below cost selling of alcohol, particularly in our multiples, and the issue of grossly offensive advertising to increase footfall. He should consider also the consequent knock-on effects in the on-licence trade and the subsidy, in terms of refunds from Revenue on excise and VAT to the multiples of approximately €21 million. It is grossly offensive to taxpayers to find they are subsidising the sale of below cost alcohol.

Debate adjourned.