Alexandra Kirk reported this story on Thursday, April 29, 2010 12:10:00

ELEANOR HALL: The Prime Minister today launched a two-pronged attack on the cigarette industry.



Kevin Rudd wants Australia to be the first country in the world to enforce plain packaging on cigarettes with the brand name in small print and large graphic health warnings on the wrapper.



He's giving the tobacco industry two years' warning for that plan.



But more immediately from midnight tonight the Government is increasing the tobacco excise by 25 per cent or $1.80 for a packet of 25 cigarettes.



The Opposition says it supports anything that will reduce smoking rates. But it says it wants proof that the measures will have an effect before endorsing them.



In Canberra, Alexandra Kirk reports.



ALEXANDRA KIRK: Kevin Rudd's back on his favourite electioneering turf - health policy.



KEVIN RUDD: Cigarettes are not cool. Cigarettes kill people. Therefore the Government makes no apology whatsoever for what it's doing.



ALEXANDRA KIRK: In his latest health push the Prime Minister has launched a double headed assault on smoking.



From midnight tonight the Government is increasing the tobacco excise by 25 per cent. It estimates that will add $1.80 to the price of a packet of 25 cigarettes or $2.16 to a pack of 30.



Kevin Rudd says that should cut total tobacco consumption by about 6 per cent and cut the number of smokers by 87,000.



KEVIN RUDD: This is a tough decision for the Government. It won't win the Government any popularity.



The big tobacco companies will hate what we are doing. The Government however makes no apology whatsoever for what it is doing.



ALEXANDRA KIRK: The Prime Minister says he had to reveal the excise hike today.



KEVIN RUDD: The advice from the Australian Taxation Office that because of media speculation about the excise in recent days that there was real concern about changes in consumer behaviour and the importance of acting now.



ALEXANDRA KIRK: And the Government wants to dismantle one of the last remaining avenues for cigarette advertising by cracking down on what's allowed to appear on cigarette packets. The brand will be in small font at the bottom with the rest of the pack dedicated to graphic health warnings. That needs new laws and would apply from July 2012.



KEVIN RUDD: This will be the most hardline regime for cigarette packaging anywhere in the world for which we make no apology whatsoever.



ALEXANDRA KIRK: The Government is also promising hard hitting anti-smoking ad campaigns and restricting internet advertising of tobacco products in Australia.



The Opposition supports an excise hike. That was one of its propositions in Malcolm Turnbull's budget reply speech last year.



The Coalition says it has an open mind about plain packaging but says it wants to be sure it will reduce smoking rates before backing it.



Independent Senator Nick Xenophon says the Opposition should have no qualms in putting its hand up in support.



NICK XENOPHON: If this will reduce the rate of smoking, if it will mean fewer people ending up in our hospitals in years to come with emphysema and lung cancer and other associated diseases then it's unambiguously a good thing.



And I guess my message, my free PR advice to the tobacco industry is if they think they're unpopular now, if big tobacco thinks they're unpopular now just wait 'til the public backlash if they decide to take this on in the courts.



ALEXANDRA KIRK: Victorian Premier John Brumby wants to see all the extra excise put to good use rather than going into the Commonwealth's general revenue bucket.



JOHN BRUMBY: It should all be if you like hypothecated into a preventative health fighting fund so that those who buy cigarettes can see where the tax is going and how it's being used.



ALEXANDRA KIRK: And Kevin Rudd agrees. The extra excise money - $5 billion over four years - will go directly into the National Health and Hospitals Network Fund to be invested in better health and hospitals for all.



That's also the view of Senator Xenophon who suggests nicotine patches should be free to everyone seeking help to quit smoking.



NICK XENOPHON: Look I think an increase in the tax is inevitable and it's a good thing. But I think it's important that any increase in the tax you see the revenue hypothecated to measures such as nicotine replacement therapy, having extra resources for the Quit campaign.



I find it extraordinary in my home state and this may occur nationally, that they don't have the funds at the moment to staff the Quit campaign hotline on Sundays and on public holidays because of wage costs.



Now I don't think that's reasonable given the revenue the Government already gets from tobacco excise.



ALEXANDRA KIRK: The Government maintains it's on firm legal ground to make plain packaging compulsory. Greens Leader Bob Brown says if the tobacco industry launches a legal challenge against generic packaging the Commonwealth should launch a counter attack.



BOB BROWN: The tobacco companies are saying if this is going to be a cost to us, and it will be, we want $3 billion in compensation. Okay well let's have the tobacco companies compensating the Australian community the $30 billion, and this is 2005 figures, that tobacco smoking costs the Australian community.



Let's apportion the cost to the tobacco companies according to their sales for the $30 billion impost on the wider community.



KEVIN RUDD: The Government will not be paying any compensation to any tobacco company anywhere - first point.



The second is tobacco companies are going to die in the ditch opposing this sort of packaging. Now the big tobacco companies are going to go out there and whinge, whine, complain, consider every form of legal action known to man. That's par for the course.



We the Government will not be intimidated by any big tobacco company trying to get in the road of doing the right thing for the health of working families and the right thing also for long-term funding of our health and hospital system.



ELEANOR HALL: That's the Prime Minister Kevin Rudd ending that report by Alexandra Kirk.