A packet of cigarettes could soon cost $40 in Australia

Photo: Spencer Platt/Getty Images.

A packet of cigarettes could soon cost $40 in Australia.

Minister for finance Mathias Cormann confirmed a 12.5% annual increase in tobacco tax today, which could see the price for a pack of 25 cigarettes soar to $40 by 2020.

Opposition leader Bill Shorten put forward an identical proposal last year, saying that he planned to raise the tobacco excise by 12.5% a year for four years.

“We are implementing in the budget the same policy on tobacco excise as Labor has previously announced and what is very clear is that Labor’s sums just don’t add up,” he said.

Although Labor said it would raise $47.7 billion over 10 years, leaked treasury documents revealed that the tax hike would only raise $28.17 billion.

“This is just another example which demonstrates that Labor just doesn’t know how to manage money.”

The average price of 25 cigarettes currently costs between $25 and $30.

An earlier Australian Health Survey estimated that 3.1 million Australians were smokers with 90% of these people smoking daily.

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