Smoking levels continue to plummet

Wed, 19 Dec 2018  |  

This article first appeared on the Yahoo Finance website at this link: https://au.finance.yahoo.com/news/smoking-levels-continue-plummet-210432040.html 

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Smoking levels continue to plummet

Some good news on health – Australians are smoking less with the amount of tobacco consumed dropping to a record low in the September quarter 2018, and this includes data back to 1959 when Australia’s population was about 60 per cent below the level of today.

The peak consumption of tobacco came in the mid-1970s. Since then, there has been an unrelenting fall, with the timing of the downturn broadly coincided with the increasing prominence given to the link between smoking and early death and a range of government regulations aimed at reducing smoking rates.

Most recently, the introduction of plain packaging laws, together with hefty increases in excises – taxes in other words – has continued to drive the consumption of tobacco lower. The decline in the volume of tobacco consumed in Australia has crashed a staggering 24.4 per cent since the plain packaging laws were introduced at the end of 2012. This is despite population growth of around 8.5 per cent over that time.

Factors other than the introduction of plain packaging laws were also driving smoking levels lower – as noted, the sharp rise in excise taxes, many years of health awareness, tobacco advertising bans, restricting smoking in public places and even the fact many smokers have died and therefore are not buying tobacco products are all driving smoking to record lows.

Many of these changes are government regulations, taken against the wishes of the tobacco companies and tobacco retailers and reflect a government commitment to improve the health of the population. Since 1975, Australia’s population has roughly doubled, yet the volume of tobacco consumed has plummeted by more than 65 per cent.

All of this goes to show that well crafted government regulation can achieve desired outcomes.

Let’s think of a few other issues where government regulation might work.

Obesity could easily be reduced if there was a tax on sugar, a massive awareness campaign highlighting healthy lifestyle choices, restrictions in junk food advertising and even plain packaging on food products that make people fatter. This mix of policies would work.

In a different area, the number of road death have been reduced over the past few decades with drink and drug driving laws, speed cameras, greater enforcement of speed limits, seat belts, higher fines and awareness campaigns such as stop, revive, survive all impacting.

Then there is climate change.

A price on carbon would see carbon emissions fall, and government funding of renewables would accelerate the path to lower carbon emissions as wind and solar accounted for an increased share of electricity output. It is only political will or the lack thereof that is keeping Australia’s per capita carbon output among the highest in the world. Sometimes, the general population is annoyed at the level of government intervention in the economy and their day to day lives. Extra costs, red tape and compliance issues are indeed annoying when the government implements policy wide-reaching regulatory changes.

But sometimes the government gets the policy setting right.

The strategy to reduce and hopefully eliminate smoking is one of those times. There should be consideration to using a similar approach to target other areas which will improve living standards.

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This article first appeared on the Yahoo Finance web page at this link: https://au.finance.yahoo.com/news/dont-look-now-almost-certainly-poorer-year-ago-211934583.html 

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Don’t look now – you are almost certainly poorer than a year ago

I am sorry to kick off the new year with some gloomy news of your finances.

It is never nice to discuss how much money you have lost, but if you are a home owner in Sydney, Melbourne, Perth or Darwin and if you have a superannuation nest egg, the odds are you are less wealthy today than you were a year or two ago.

Here are some uncomfortable facts.

The Australian stock market, where the bulk of your superannuation assets are likely to be invested, has slumped 11 per cent since August, reducing the value of stocks by around $200 billion.  No doubt your superannuation has suffered part of this loss.

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Falling dollar reflects global concern all is not well in the Australian economy

Mon, 07 Jan 2019

The article first appeared on The Guardian website at this link: https://www.theguardian.com/business/2019/jan/03/falling-dollar-reflects-global-concern-all-is-not-well-in-the-australian-economy 

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Falling dollar reflects global concern all is not well in the Australian economy

The Australian dollar was hit hard overnight, Australian time, slumping below 70 US cents before a sharp and more extreme move saw it temporarily crash to a low of 67.40 US cents. It subsequently recovered marginally, but remains weak at around 69.40 US cents.

Rather than focus on the micro aspects of minute-by-minute or hour-by-hour moves in the dollar, which can be more noise than substance, the trend for the dollar over the past year has been down.

In January 2018, the Australian dollar was trading at 81.50 US cents.

There is increasing concern from global investors that all is not well with the Australian economy. Policy is in a do-nothing phase. Entrenched low wages growth is hampering growth in household spending. This is being complemented, in a negative way, by a sharp fall in wealth as house prices drop and the share market weakens, both of which will be a negative for the economy during 2019. This is because householders are simply not getting the income growth nor wealth accumulation needed to allow them to keep spending at a rate that will see the economy expand at a pace that will generate upside wage and inflation momentum. Strategies aimed at reducing debt and paring back new borrowings mean, by definition, weaker economic growth over the near term.