A Liberal senator has encouraged smokers to keep up their habit, saying smokers die early and save the health system money.

Liberal powerbroker Nick Minchin has slammed the federal government's plan to increase the tax on cigarettes as he told smokers to "go for it".

"They die early, they actually save us money," Senator Minchin told ABC television last night.

He rejected comments by another panellist on the ABC's Q&A program that smokers should pay more tax because they cost the health system money by getting sick.