Despite the significant health impacts of smoking — smoking is linked to 19 types of cancer, 7 forms of cardiovascular disease, and chronic obstructive pulmonary disease — 10.7% of Australian adults were current daily smokers from 2020 to 2021. What’s clear is that a smoking habit not only causes an enormous amount of suffering health-wise, but is a significant financial burden, too. Australian cigarette prices are among the most expensive globally, largely due to Australia’s world-highest taxes on tobacco products. Such taxes credited as one of the main factors driving down smoking rates among Australians. We know that quitting smoking saves money, but just how much? In this guide, we look at how much money is spend on cigarettes each year and how much you could be saving by kicking the habit.
How Much Money is Spent on Cigarettes Each Year?
Australian cigarette prices have continued to steadily rise since the 1980s.
Frequent increases in excise taxes and customs duties have fuelled the price spikes and played a significant role in deterring Australians from picking up the habit.
As of 2022, on average, a packet of cigarettes costs about $40.
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Currently, a 25 pack of a leading brand sits at $48.95 at Coles, while a 20 pack of cigarettes sits around the $35 mark.
Using the 20 pack as our reference, a pack-a-day smoker currently spends $12,775 on cigarettes per year.
That’s a total of $127,750 over 10 years.
How Much Money is Taxed From Cigarettes?
Australia has among the highest tobacco taxes in the world, which makes Australian cigarette prices some of the highest globally.
The history of cigarette taxes in Australia truly began in 1901 when the federal government imposed taxes and customs duties through the Excise Act and Customs Act.
However, the tobacco tax rate system as we know it today was first introduced in the 1980s.
In 1983, it was decided that cigarette tax rates would fall in line with the Australian Consumer Price Index (CPI), meaning taxes (for Australian-made tobacco products) and customs duties (for imported tobacco products) on cigarettes would automatically rise twice every year.
This biannual increase continues to take place today.
In the 1990s, further pressure from lobbyists and health groups prompted the government to impose additional ad hoc tax increases (in addition to the biannual raise) in 1992, 1993, 1994 and 1995.
Between 1995 and 2000, there were no additional taxes placed on tobacco products and the prices continued to change purely based on the biannual CPI increases.
In the past decade, further ad hoc taxes have been applied and have sent cigarette prices soaring.
In April of 2010, a 25% increase on tobacco taxes and customs duty was implemented. Three years later, in 2013, it was announced that there would be an additional (on top of the biannual CPI increase) annual tax and duty rate applied to tobacco products from 2013 to 2020.
The 12.5% rate was applied annually for each of the eight years.
When looking at the cost of a leading cigarette brand, its 2021 price was 8.5 times higher than its 1940 price.
Overall, the Australian tobacco industry is expected to generate $14,970 tax revenue from 2023 to 2024.
It’s clear that these tax rates have been instrumental in driving smoking rates down, with the smoking rate among Australian adults having between 1995 and 2019.
Does Quitting Smoking Save Money?
Quitting smoking isn’t just the right choice for your health, but also for your finances.
Quitting smoking saves a significant amount of money.
As mentioned, a 20-pack-a-day smoker would currenly spend around $12,775 on cigarettes per year and $127,750 over 10 years.
When you quit, you can save that money instead and put it towards things that bring you joy.
Breaking Down the Money Saved Not Smoking
If you’re struggling with bothersome withdrawal symptoms or looking for an incentive to quit, it can be motivating to look at just how much money you can save by not smoking.
Let’s take a look at how much money you’ll have saved by each important milestone.
One Day Not Smoking
After one day without smoking, you’ll have an extra $35 in your pocket.
You could take yourself out for lunch or treat yourself to a small houseplant for your home.
You’ll even be able to notice health benefits just 24 hours after quitting. Your blood pressure and heart rate return back to normal levels, and the circulation in your hands and feet improves.
The carbon monoxide levels in your body reduce, and the oxygen levels in your blood level out again. Your risk of heart attack already decreases.
Two Days Not Smoking
Two days after quitting, you’ve saved $70.
Why not go out for a delicious dinner to celebrate? Alternatively, you could purchase a bouquet of fresh flowers.
At this point, your body has cleared itself of nicotine and carbon monoxide. Your lungs are also beginning to function properly again as the cilia regain function.
At your celebratory dinner, you might notice your sense of taste and smell have improved. This is because the nerve endings in your nose and mouth — that were damaged by the chemicals in cigarettes — have begun to heal.
One Week Not Smoking
At the one week mark, you’ve saved $245.
Head out for a luxurious massage, purchase concert tickets, or buy a new item of clothing!
This is certainly a milestone to note — smokers who make it one week without smoking are nine times more likely to successfully quit. You’re well on your way!
One week in, your nicotine withdrawal symptoms will begin to reduce in intensity. You may notice less cravings and improved mood.
The antioxidants in the blood, such as Vitamin C, also increase at this point.
Two Weeks Not Smoking
Two weeks into quitting and you’re $490 richer than you would have been had you smoked.
You could splurge on a night away in your city, or pick up some new airpods.
As for the health improvements, you’ll notice you can breathe a little easier because the air sacs in your lungs are beginning to relax and produce less mucus.
One Month Not Smoking
After 30 days without smoking, you have held onto an extra $1,050.
You could purchase a new TV or head interstate for a weekend away.
You may notice the appearance of your skin has improved, with less yellowing around your fingernails in particular.
Cigarettes tend to irritate the sinuses, so you’ll likely notice any sinus issues or congestion begins to clear.
Additionally, your lungs are in full-blown healing mode, meaning you’ll be able to breathe easier and exercise more intensely.
Three to Six Months Not Smoking
At the three month mark, you’ve saved $3,150. You could treat yourself to a new Macbook with that cash.
After six months, you’ve got an extra $6,300 in the bank. Fancy a trip to Fiji?
Your body is now much better at recovering from wounds and infection, and you’ll likely experience improved moods and less stress.
At this point, any lingering coughing should subside.
After One Year Not Smoking
One year after quitting, your body and finances are much healthier.
You will have saved a total of $12,775 over the year. You could buy some new furniture, head on a trip around Europe, or put some money towards a house deposit.
You can also rest easy knowing you’ve made the best choice for your body.
Your risk of diabetes and certain cancers — including liver, stomach, colon, rectum, and pancreatic cancer — have reduced significantly.
Plus, your risk of coronary heart disease is half of what it was when you were smoking.
Quit Smoking For Your Health and Your Wallet
Quitting smoking saves money — $12,775 a year for a 20-pack-a-day smoker. Curbing the habit is the best thing you can do for your health and your wallet.
With cigarette prices only set to increase with ever-rising tax rates, a smoking habit will leave a significant dent in your savings.
The road to quitting can be challenging, but you don’t have to navigate it on your own. You can book a 100% free, bulk-billed telehealth appointment with a specialist trained GP.
They will be able to explore strategies and tools with you, and prescribe any pharmacologies, Nicotine Replacement Therapies, or Prescribed Nicotine Vaping Products that you may require on your journey.