OLD RELIABLES:The "old reliables" of petrol and alcohol have not been targeted by Minister for Finance Brian Lenihan in the budget but cigarettes and diesel have been hit with increases.
Diesel is to increase by 5 cent a litre while the excise duty on tobacco is to go up by 25 cent. Both increases will take affect from midnight tonight.
Mr Lenihan said there was no scope to raise excise duty on petrol or alcohol as further tax increases would create a "substantial risk" driving consumers across the border.
Health promotion organisations have accused Mr Lenihan of buying into “false arguments” about smuggling in his failure to impose much higher tax increases on cigarettes. The Irish Heart Foundation said the policy of putting minimal increases on tobacco products was “very short-sighted” given the estimated annual cost of treating smoking-related illness was about €1.5 billion a year.
It said the degree of smuggling was “not a consequence of price, rather it is a result of inadequate measures to control this illegal activity”.
“Putting 25 cents on a packet of cigarettes will have minimal impact on preventing young People experimenting with tobacco and will have minimal effect on encouraging existing smokers to quit,” the organisation said in a statement.
“It would appear that the Minister has bought into the false arguments about smuggling and in so doing he has exposed another generation of our young people to the dangerous effects of smoking.
The organisation said what had been needed was "real political leadership of the type shown by [former minister for health] Micheál Martin when he brought in the workplace ban.”
The IHF said smoking prevalence had increased to 29 per cent in a recent survey.
ASH Ireland said the approach to tobacco price "runs totally contrary to the Government’s stated policy of creating a tobacco free society".
The organisation had sought a €2 increase on a pack of 20 cigarettes.
Chair of the organisation Dr Angie Brown said: ”It is of concern that the threat of smuggling seems to have impacted on the Government’s decision not to raise tobacco prices. Smuggling is a separate criminal issue - and it should not be allowed to impact on health policy decisions.
"In the past the Government has used inflation fears as the reason for not increasing tobacco prices. This was not a factor in the current economic climate - so it appears that vested interests have had a major influence on government thinking in this regard. Between one and two billion euro is spent annually on tobacco related health costs - and this will be significantly reduced if we can reduce smoking prevalence."
Charity for alcohol-related issues Alcohol Action Ireland said the decision not to increase excise duty on alcohol was a "lost opportunity to yield revenue for vital health and social services, as well as reducing the harms caused by alcohol use".
Director of the organisation Fiona Ryan said a "modest" 10 cent increase on alcohol could have raised much needed revenue. She said the Department of Finance’s tax strategy group had calculated that such an increase would yield €144.4 million.
"In the past 15 years, there have only been three increases in excise duty – cider (2001), spirits (2002) and wine (October 2008), the last excise duty increase on beer was in 1994. Take beer for example, tax as a percentage of price fell from 37 per cent in 1994 to around 29 per cent in 2007."
“Our reported consumption drop in alcohol brings us back to the same levels we were drinking in 1997/1998 which is still reckoned to be 20 per cent higher on average than our European counterparts. Even at 1997/1998 levels we are still drinking the equivalent of 490 pints or 129 bottles of wine or 46 bottles of vodka per adult."
The AA said motorists would be relieved there was no increase in petrol prices but said the diesel increase would affect about 17 per cent of drivers and would hit commercial road users hard. It also expressed disappointment that the levy on motor insurance is to increase from 2 per cent to 3 per cent.