I believe that taxes paid by smokers help to subsidise the healthcare of non-smokers, not the other way around. Or put it this way - if all Australians stopped smoking then either everyone's taxes would have to go up to cover the shortfall or the quality of the healthcare would be lower.
Tobacco excise raises about $2B a year(1), but smoking costs around $30B a year(2). A 10% increase in the excise reduces the smoking rate around 4%, so simplistic analysis indicates that around $200M raised would save nearly $1.5B (lots of simplification and assumptions there obviously).
The $30B figure you quote has to be pure hyperbole. It isn't possible to tell from the link you provided but I assume it must be allocating a monetary value to human life along with lost tax revenues and productivity due to early death.
$30B, with just over 3M smokers in Australia is $10,000 per smoker per year. I call bullshit.
Even in NZ the health department were only claiming a cost of $1.9B per year and that was controversial. An anti-smoking group's report in NZ only managed to stretch it as far as $350M per year.
Edit:
Ok, I found the paper where they came up with the $30B figure.
"The average intangible value of the loss of one year’s living in 2004/05 prices was calculated to be $53,267."
That is where the number comes from. Like I said, hyperbole.
Also, some napkin calculations: $2b / 3m smokers = $666 / year. $666 / 52 = $13. The average smoker is paying a lot more than that in tax each week (a single pack is $20 - $30).
The quoted $2B tax revenue is bunkum too. NZ was taking in $1B seven years ago with a population 1/5 of Australia's and with prices 1/2 what they are now.
Here are figures from the latest Commonwealth budget, and the latest inter-generational report: http://imgur.com/a/UWFAa
Tobacco excise takes in $9.4bn in revenue per year, and is expected to hit north of $10.5bn over the next four years, due to the recent excise hike. This will make tobacco the largest 'earner' when it comes to excise and customs duty (even beating diesel and petrol).
The IG report contends (as it has for many years now) that when people hit about age 62, their individual tax / revenue curves cross-over. By 70, they are receiving public expenditure 2.5 times greater than the tax they pay. By 75 it's about 3 times. By 80, it's about 4.5. And before anyone plays the "you're a monster" card, I also think it's good that people are living longer and not dying from smoking related illness.
But I would suggest that public finance is not the strongest grounds to argue anti-smoking on. The fact that it kills so many people, in pretty awful ways, is more than enough justification for us to try and hasten tobacco's demise. Please think carefully about the issue, because you'll be better able to pressure our politicians to take more effective action (and also make it impossible for them to quietly go backwards).
I agree that we shouldn't be arguing in favour of anti-smoking regulations on the grounds of financial cost (esp. with regard to the health budget). There are, as you say, much better grounds to base the argument on. Exaggerated figures such as the $2B / $30B given above just help to discredit the entire argument. I prefer that my government not try to manipulate me with dodgy statistics (even if we largely agree on the goal of reducing smoking).
> They pay and save for retirement, but don't use it.
Since we're throwing around random opinions...
Would you say that the kind of person that continues such an expensive habit nowadays despite what everyone knows about smoking is the kind of person who "pays and saves for retirement"?
Poorer, less-educated people are much more likely to smoke. How about we also take this into account when we're speculating about how much they might be saving.
Actually medical costs associated with smoking are extremely significant. I'm not aware of any studies showing that they are less than average costs associated with death in old age.
I don't know Australia, but in Poland total taxes from tobacco and alcohol are similar to income tax, and to healthcare budget.
-Tobacco and alcohol tax: 40 billion PLN 2013 [1]
-Personal income tax 42 billion PLN 2012 [2]
-Healthcare budget: 64.5 billion PLN 2013 [3]
Cigarettes (and to a lesser extent alcohol) account for 2/3 of whole healthcare, for everyone!
And smokers pay retirement insurance for whole life, statistically getting nothing. Especially when being male; females have 5 years lower retirement age and live 7.8 years longer. 5+7.8+10=22.8 years difference. So a male smoker pays every month, but gets nothing.
The post you replied to had how much it raises in Australia: AU$2B/year. That compares to AU$258B/year in income tax[1]. The health, aged care and sport spending allocation is AU$89.5B[2]
Your tax/public expenditure curves cross roughly when you turn 62. By 70 the government spends on you more than twice what you pay in taxes. 75 it's 3 times as much. 80, it's 4.5. The expenditure curve is pretty much asymptotic by that point.
The revenue of taxes isn't specifically allocated in this way in Australia. Another way of looking at it, the federal government doesn't specifically dictate that x% of the health budget must be allocated to subsidising the healthcare of smokers vs non-smokers.
I believe that taxes paid by smokers help to subsidise the healthcare of non-smokers, not the other way around. Or put it this way - if all Australians stopped smoking then either everyone's taxes would have to go up to cover the shortfall or the quality of the healthcare would be lower.