Cigarette Tax
Section 1:
“Cigarette tax hike sparks panic buying”
By Ashley Hall
Updated Thu Apr 29, 2010
What is the main issue presented in the media report?
Discuss what has actually happened: In the year of 2010, the Federal Government raised taxes on cigarettes by an extra 25 per cent, resulting in an increase price of $2.16 to every pack of 30 cigarettes. A proclamation stated by Prime Minister Kevin Rudd on the crackdown on Internet advertising of cigarettes was mentioned. Mr. Rudd also affirmed ‘the government will spend $27.8 million on an anti-smoking campaign (Hall, 2010)
This media report outlines the publics impulsive buying of cigarettes upon the government’s mention of the very rapid increase in taxes, thus resulting in an upward increase in price. It mentions the dismays retailers and tobacconists faced due to the tax hike. Further more, mentioning the concerns of philanthropists and other individuals.
Highlight the reason for the issue being raised:
This issue was one that arose quite soon after its announcement, as it impacted the country in its majority in numerous ways. The justification behind this issue was the government’s lack of planning. The release of the tax hike occurred only several hours before its prospected start of midnight that night, which ultimately left little or possibly even no time to adjust and prepare for the subsequent price increase. (Hall, 2010)
Outline what possible impacts this change could have:
The unexpected change posed many impacts on an abundant area of the population. The change impacted the consumers (smokers), the suppliers/producers, retailers/tobacconists, charity workers and the government. The sudden publication of the price increase would lead to a majority of smokers purchasing larger amounts of cigarettes than usual, in an attempt to purchase the product at a cheaper price rather than at its increased price. The retailers/tobacconists face the prospects of higher demands and physical
“Cigarette tax hike sparks panic buying”
By Ashley Hall
Updated Thu Apr 29, 2010
What is the main issue presented in the media report?
Discuss what has actually happened: In the year of 2010, the Federal Government raised taxes on cigarettes by an extra 25 per cent, resulting in an increase price of $2.16 to every pack of 30 cigarettes. A proclamation stated by Prime Minister Kevin Rudd on the crackdown on Internet advertising of cigarettes was mentioned. Mr. Rudd also affirmed ‘the government will spend $27.8 million on an anti-smoking campaign (Hall, 2010)
This media report outlines the publics impulsive buying of cigarettes upon the government’s mention of the very rapid increase in taxes, thus resulting in an upward increase in price. It mentions the dismays retailers and tobacconists faced due to the tax hike. Further more, mentioning the concerns of philanthropists and other individuals.
Highlight the reason for the issue being raised:
This issue was one that arose quite soon after its announcement, as it impacted the country in its majority in numerous ways. The justification behind this issue was the government’s lack of planning. The release of the tax hike occurred only several hours before its prospected start of midnight that night, which ultimately left little or possibly even no time to adjust and prepare for the subsequent price increase. (Hall, 2010)
Outline what possible impacts this change could have:
The unexpected change posed many impacts on an abundant area of the population. The change impacted the consumers (smokers), the suppliers/producers, retailers/tobacconists, charity workers and the government. The sudden publication of the price increase would lead to a majority of smokers purchasing larger amounts of cigarettes than usual, in an attempt to purchase the product at a cheaper price rather than at its increased price. The retailers/tobacconists face the prospects of higher demands and physical
References: McTaggart, D., Findlay, C., and Parkin, M. (2010), Economics, Sixth Edition, Addison-Wesley, Sydney Lecture Slides, Blackboard, University of Technology, Sydney, Insearch (2011), Economics for Business Unknown.2011, ‘Apple shares hit as iPhone sales fall Short’, Sky News, YAHOO, viewed 4 November 2011, http://news.yahoo.com/apple-earnings-hit-drop-iphone-sales-220800212.html Layton, A., T. Robinson and I. Tucker (2009), Economics for Today, Cengage Learning Australia, Australia: South Melbourne. Faculty of Business (2010), Guide to Writing Assignments (3rd ed.), Faculty of Business, University of Technology, Sydney