Prime Minister Malcolm Turnbull has left the door open to raise taxes on cigarettes, following a Labor plan to almost double the cost of a packet to $40 by 2020.
The Opposition says it will continue the increase in tobacco excise from July 1, 2017, delivering four 12.5 per cent increases if it wins the next federal election.
The policy would bring Australia in line with France, New Zealand and the UK in ensuring tax accounts for at least 75 per cent of the cost of a packet of cigarettes.
The Parliamentary Budget Office says it would raise $3.8 billion over the four-year forward estimates period and $47.7 billion over the medium term.
Mr Turnbull, who as Opposition Leader put forward a similar tax rise, told parliament on Tuesday he would respond “respectfully” to the Labor policy and sought their costings.
He wants details as to how much it would raise, the estimated reduction in the number of smokers and whether it was considered a regressive or progressive tax.
However, the Opposition needed to think about making some “solid proposals” to improving the tax system.
Labor caucus members on Tuesday quizzed Bill Shorten and other frontbenchers on the reasoning, politics and data behind the policy, with one MP saying “many smokers are our voters”.
Mr Shorten – both of whose parents had tobacco-related illnesses – told reporters after the meeting the lives of working-class people were not “theoretical” to him.
“I get that this decision about tobacco excises will have a real impact,” he said.
“I tell you something about people who smoke and working-class backgrounds – there is not many I have met who want their kids to take up smoking.”
Out of the 2.5 million Australians who smoke, 15,000 die annually from related illnesses.
The effect on the health budget was estimated at $31.5 billion a year, which Mr Shorten described as a “drain on our health system and a drag on the economy”.
“We are determined to be the generation of political leadership which make it less likely that our children will take up smoking,” he said.
Shadow Treasurer Chris Bowen said it was an alternative to the government’s plan to impose the GST on fresh food and make health and education more expensive.
“Labor believes in tax reform with purpose and with principle,” he said.
Mr Turnbull said it was “fantasy politics” to suggest the government had proposed a rise in the GST.