Tax surge for booze and cigarettes

Smokers and drinkers will be hit with a $50 million increase in the so-called sin taxes next week.

The federal slug on beer, spirits and cigarettes rises on Wednesday under the half-yearly excise changes introduced by Bob Hawke nearly 30 years ago and kept in place by every prime minister since.

But it is one of the smallest increases since the system began. The increases are tied to inflation, which is at a 13-year low.

The Herald Sun can reveal smokers will suffer an extra 10c tax bite for a pack of 50 cigarettes with the tax man collecting $17.44 from every pack sold.

A smoker who buys a pack of 30 cigarettes a day will pay $73.29 in tax each week.

Spirit drinkers will suffer the biggest impact, with the Government adding 21c to lift its claim on a slab of 24 cans of pre-mixed drinks to $33.83.

Beer drinkers will pay 8c more tax on a slab of 24 full-strength 375ml cans but there is no tax increase for a 285ml glass of beer served across the bar.

The changes will reap an extra $35 million a year in taxes from cigarettes, another $12 million from beer and $6 million from spirits.

Retailers must collect the extra tax, but other factors such as competition, business costs, profit margins and the GST could mean prices paid by consumers could be more or less than the increase and vary between brands.

Breweries, hotels and tobacco companies will decide this weekend whether to pass on price rises relating to other increases to their business costs.

Smokers say the extra taxes may force them to cut back or quit, while drinkers said they would still buy a few drinks to socialise.

"I don't drink enough beer for a price hike to deter me too much," said Megan Tyler, 27, of Brunswick.

"I do it to socialise, it's not a habit. It's not like putting the price up on food, which is a necessity."

Carlton North drinker and smoker Stephen said the increase was tiny.

"You can't fight taxes. And it's tied to inflation, so it's probably the smallest increase in a dozen years."

Source: The Herald Sun, 28 July 2012