Pay Smokers to Quit


Tobacco use in Australia has never been lower. The latest data has 17.9 per cent of adults smoking at least weekly, with 16.6 per cent smoking daily. In NSW, where there has been larger recent expenditure on quit campaigns than in any other State, just 13.9 per cent smoke daily. Lung cancer rates per 100,000 in men peaked in 1980 and today are as low as they were in 1950. Women’s rates are still rising slowly, but are much lower than men’s and will never reach the male peak.

Smoking has been in more or less constant decline since the 1960s when around 70 per cent of men and 35 per cent of women smoked. Futurists are divided on whether the next 10 years will see an acceleration of the decline, or a slowing down once a "hard core" of perhaps 5 per cent is reached.

The hard core camp have a bit of explaining to do. The theory goes that this group is increasingly heavily addicted – but this is incompatible with the facts: smokers today are
smoking less cigarettes per day than ever before. If it were true that smokers
were "hardening", then the average smoker would be smoking more, not less, per
day than in the past. Most observers see the endgame in sight in nations like Australia.

The main drivers of people quitting smoking have always been concerns about health consequences. This is why it remains vital that disturbing, unforgettable imagery about gangrene, emphysema and brain clots should keep ruining a peaceful evening’s viewing.

But price comes in a close second. In tobacco control circles, a "scream test" is applied to the tobacco industry and its third party errand boys to determine which policies are hurting – and therefore working. Industry internal documents, made available in their millions via US litigation, show the industry ranks tobacco tax as its worst fear. For example, Philip Morris thinks "A high cigarette price, more than any other cigarette attribute, has the most dramatic impact on the share of the quitting population." Morgan Stanley cautioned investors in 2007: "In our opinion, [after taxation]the other two regulatory environment changes that concern the industry the most are homogenous packaging and below-the-counter sales. Both would significantly restrict the industry’s ability to promote their products."

A packet of 30 cigarettes in Australia costs about $12.60, less than a movie ticket or renting a couple of new-release movies. It’s just over one-third of the average 15-year-old’s pocket money. Taxes on cigarettes in Australia are very low (as a proportion of the retail price) compared with other high and middle-income countries.

Calls to raise tax on tobacco are characteristically met with soft left and welfarist sentiment about harming the poor, who smoke most. This is such a perverse argument. If raising tax on tobacco harms the poor, the corollary is presumably that those concerned should line up with the tobacco industry to lobby for lower prices to help the poor. This would of course increase consumption and exacerbate the already wide social class differentials in tobacco-caused disease.

Of course there are many poor smokers who will continue to smoke as prices rise. In some cases, tobacco expenditure will displace food and other essentials. But the net effect will be that because the poor are more price responsive than the more affluent, the impact of price rises will be greater – which is precisely the idea.

For example, public health policy researchers Matthew Farrelly et al reported that, in the US, adults with income at or below the median are more than four times as price-responsive as those with income above the median. In Australia, following tax increases in 1999 to 2001, smoking declined more significantly in blue- compared to white-collar groups.

A comprehensive package targeting poor smokers which included free courses of nicotine replacement therapy and trials where people are paid to quit smoking, could see the decline in smoking accelerate even faster.

A paper out this month in the journal Addiction reports an intriguing experiment whereby pregnant smokers were offered retail vouchers if they quit. Those receiving the vouchers had end-of-pregnancy quit rates of 41 per cent, compared to 10 per cent in those women who were not offered vouchers.

Health insurance companies have been offering non-smokers large premium discounts for years and presumably know what they are doing. So why not pay people to quit?

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.