In his budget speech on Wednesday Finance Minister, Mr. Pravin Gordhan, is expected to announce an estimated increase in cigarette excise duty of 58 cents per pack of 20.  This modest increase will delight the cigarette manufacturers but do harm to public health and the fiscus.

The industry has reason to be pleased because it has determined the amount by which the excise duty will rise. It is government policy to passively maintain the cigarette excise tax level at 39.7% of the retail price. Since last year the manufacturer’s have hiked the recommended retail price of a packet of 20 Peter Stuyvesant by R1.50 (from R24.50 in February 2011 to R26 now. Accordingly, the excise duty on cigarettes will have to rise by 58c in the budget to catch up with the industry’s higher prices.

The impact of these modest tax rises compared to bigger tax increases, will be to reduce the incentive for people to quit or children not to start, and increase the health harms from smoking.

The Treasury’s current tax model is hopelessly outdated — the percentage tax incidence on tobacco products has not changed since 2004.  The model also gives the tobacco industry complete power to determine the amount by which excise duties will alter in the budget.  If the industry had not increased prices in 2011, the amount to be paid in excise taxes would not have changed.

The effect of the manufacturers pricing strategy on retail prices (and smuggling) has attracted little attention from the Treasury, the media or the public.  The cigarette makers are aggressive in increasing prices so as to increase profits. After each budget the manufacturer’s pass on the full amount of the tax rise plus an additional price hike of its own to the customer. For instance in 2011 the excise tax on cigarettes increased by 80c but the manufacturer’s increased prices by R1.50. Yet the industry complains that higher prices stimulate the illicit trade in tobacco, and completely ignores its own role in setting retail price.

In handing over excise tax policy to the tobacco companies the Treasury is failing the country. Compared to other African and European countries South Africa has a low rate of tax. Research shows that increasing tobacco tax rates not only increases government revenues but also reduces the prevalence of tobacco use. Smokers are more likely to quit when cigarettes are expensive. South Africa’s tobacco tax policy is thus in urgent need of review, especially since cigarettes kill over 44000 of our citizens every year.

For more Information please contact:

Dr Yussuf Saloojee, Executive Director

011 725 1514       or             076 633 5322      .

Outline

• Introduction – Health promotion definition and Functions

• Current Situation – Major risk factors and key determinants (tobacco, alcohol and key determinants) and

• Opportunities

• Challenges

• Required actions

• Way forward and Conclusion

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Types of evidence needed in South Africa

• Current challenges in developing evidence

• The role of a health promotion foundation in addressing challenges

• Suggested research functions of a health promotion foundation

• Types of research

• Examples from the alcohol area

• Conclusion

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DEFINITION of HP
“HP is any event, process or activity that facilitates the
protection or improvement of the health status of
individuals, groups, communities or populations. The
objective is to prolong life and to improve quality of life,
that is to prevent or reduce the effects of impaired
physical and/or mental health in those individuals who
are directly (e.g. patients) or indirectly (i.e. carers)
affected. Health promotion includes both environmental
and behavioural interventions”
(Marks et al, 2004)

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Why health promotion foundations?
A range of structures exists accross the world for promoting health. While each has its own geo-political features and genesis, a transferable organisational and financing model, has been adopted in many countries. HPF already in existence concentrate on two major objectives, namely:

• Identifying and building capacity within existing infrastructures accross government and community sectors

• Developing ring-fenced funds for achieving long-term sustainability of policies and programmes

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Why we need a HP foundation

• Stable source of funds – can fund long term programmes – variety of programmes

• Work with government but not part of government

• Does not answer to any political party

• Can react to needs quickly

• Less bureaucracy

• Work across several government departments and layers of government

• Truly multisectoralDownload Full Presentation:

Soul City – Phuza Wise Campaign Meeting 9-10 November 2011

Making the polluter pay: The case for a Health Promotion Foundation in SA funded by a levy on alcohol

Charles Parry
Alcohol & Drug Abuse Research Unit, MRC,
cparry@mrc.ac.za

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SA is not getting a good bang for its buck

• Best buys are one factor BUT critical for setting priorities
• The burden of NCDs is rising
• Prevention of NCDs makes cents
• Devote more resources to get SA specific data to motivate decision makers to act

Even though prevention will help, there are challenges implementing these solutions

• Morbidity data on NCDs not easily available
• Multi-sectoral work difficult
• Tailor interventions to local context and address cultural beliefs
• Community led and owned solutions more likely to work
• Therefore, we need SA-specific data

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• CVDs are the leading causes of death and disability in the world.
• Although a large proportion of CVDs is preventable, they continue to rise mainly because preventive measures are inadequate.
• An estimated 17.3 million people died from CVDs in 2008
• Over 80% of CVD deaths take place in low- and middle-income countries
• By 2030, almost 23.6 million people will die from CVDs

  WHO and World Bank data (Walter et al. 2006)
  Predict that over the next 30 years not only will there be an almost doubling of deaths due to CVD in South Africa but that an increasing proportion of these will be amongst the working age group (ages 35-64) compared to other age groups

  • 80% of premature CVDs are preventable……..lifestyle changes
  • The major modifiable risk factors for CVD are known

  Tobacco use, Sedentary lifestyle, Unhealthy diet, Harmful use of alcohol

  • Yet…..unhealthy behaviours continue to be adopted by both individuals and communities

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