Since the early 1990s the South African government has embarked on a deliberate strategy to reduce the cigarette smoking. The successes of this strategy have been poorly communicated and shadowed by the failures of the government’s HIV/AIDS policies and the struggling health system. In the international community South Africa has been consistently recognized as a global leader in tobacco control. Although successful in reducing smoking, much or South Africa’s tobacco control policy falls short of its goals and currently accepted global best practice.
Since 1993 three legislative processes and consistent increases in the excise tax on cigarettes have reduce cigarette consumption and smoking prevalence dramatically. In 1993, 33% of South Africans smoked 1.8 billion cigarettes ‘ or about 4500 cigarettes per smoker per year. In 2008, 25% of South Africans smoked 1.2 billion cigarettes ‘ or about 3100 cigarettes per smoker per year. The legislation limited public smoking and required health warnings on packaging and advertising. A second round of legislation in 1999 placed further restrictions on public smoking; banned most advertising and limited the age of smokers. The most recent legislation bans advertising altogether and further restricts public smoking. However, the legislation falls short of banning smoking in all public places. In 1999 when the Ministry of Health first proposed a complete public smoking ban South Africa would have been the first country to do so. However, there are now several countries with complete public smoking bans (including Australia, Canada, Colombia, Ireland, Mauritius, New Zealand, Norway, the United Kingdom, Uruguay and Turkey) and no indication that South Africa will move there anytime soon.
It is important to remember how aggressively the tobacco industry fought the implementation of legislation. They argued that public smoking restrictions were unworkable and would bring about huge financial hardships on the hospitality industry. Neither has happened! Public smoking restrictions have been generally well enforced and observed without police crackdowns. More importantly, the legislation has not resulted in financial hardship on the hospitality industry. Research published in the South Africa Journal of Economics and the South African Medical Journal has shown the financial impact to be neutral and even positive in some cases. When advertising was banned (or at least partially banned) in 1999 we were warned that the advertising industry would suffer and that many sporting and cultural events would fail to find sponsorship and collapse. This prediction has failed to materialize in a spectacular fashion. The gap has been quickly filled, mostly by the telecommunications and banking sector. Some major rugby, cricket, soccer and horse racing events previously sponsored by cigarette brands are now sponsored by the likes of Vodacom, MTN, ABSA and Standard Bank.
Although advertising bans, public smoking bans and other legislative restrictions are important in changing the social norms and social acceptability of smoking the most important determinant of the decline in smoking since 1993 has been consistent increases in the excise taxes on cigarettes. Since 1993, excise taxes have increased by 357% (adjusted for inflation). The resultant increase in the retail prices of cigarettes has been a smaller 146% (adjusted for inflation). This may sound like a lot but excise taxes on cigarettes in South Africa are still well below the recommended benchmarks supported by the World Bank and the World Health Organisation.
Besides the health benefit of reduced cigarette consumption the increases in excise taxes have been able to contribute positively to the fiscus. Since 1993, total collections from excise taxes on cigarettes have increased by 211% (adjusted for inflation). This means that that cigarette taxation, which accounted for less than 1% of government revenue prior to 1993, accounted for as much as 1.6% of revenue in 2000 and now about 1.3%. But is this an unfair burden on smokers? Why should smokers have to pay more in taxes than non smoker? Smokers create a huge burden on the public healthcare system in terms of smoking related disease (both in the private and the public sector). Treating smoking related disease is expensive and places an unfair burden on the majority of the population, who do not smoke, to pay for the treatment for the minority. This occurs in the public sector as well as the private sector since medical aid contributions do not discriminate between smokers and non smokers (by law medical aids cannot impose higher membership fees on smokers versus non smokers). This cross subsidization of smokers by non smoker is most unfair since smokers choose to knowingly consume a very harmful product. Excise taxes play an important role in equalizing this burden.
Others have argued that tobacco taxes are regressive, in that they fall disproportionally on the poor. This is possibly the case in some countries although it is not the case in South Africa where the poor smoke disproportionally less than the middle class. Furthermore, research by University of Cape Town Economics Professor CornÃ© van Walbeek has shown that the poor have been more sensitive to increases in taxes and have reduced their smoking significantly as a result. He describes this phenomenon by indicating that taxes are only regressive for the small amount of people who continue to smoke.
The tobacco industry have for a long time argued that tax increases do not decrease consumption but rather that the decline in legal consumption has been replaced by an increase in illicit cigarettes (smuggled and counterfeit) and roll your own cigarettes. The data simply does not support this claim. Although there has been an increase in illicit cigarettes since the early 1990s recent research soon to be published in the journal Trends in Organized Crime suggests that the levels are less than half of what the tobacco industry claims. Furthermore, there is little evidence that the increases in illicit cigarettes are a result of higher taxes, but rather the result of broader problems that the country faces with organized crime.
But why is tobacco control important to South Africa? Given the other public health priorities in South Africa, especially in terms of HIV/AIDS, why should we care so much for tobacco control? Also, why do we care so much about tobacco control, and not about alcohol which is an underlying cause of many social problems in our country? These are valid concerns, but just because we have other problems it should not mean ignoring what are perceived to be lesser problems. However, tobacco is not a small problem. According to estimates of the Medical Research Council 8.5% of all deaths in South Africa are as a result of tobacco smoking, this ranks as the third highest cause of death in the country. Yet, the intervention to reduce smoking is significantly simpler and cheaper than many other public health problems and the results have been very effective. The amount of money and human resources spent on reducing the smoking in South Africa pails into insignificance when compared to what is spent in other areas of public health. Yet, approximately 2.7 million fewer South Africans smoke now that would have in the absence of tobacco control policy. Given what we know about smoking related disease this surely counts as one of the most effective and important public health interventions in our country’s history, one that has for the most part been unheralded and unsung.
Evan Blecher is an Economist in the International Tobacco Control Research Program at the American Cancer Society. He is a graduate of the University of Cape Town and is an internationally published author and expert on tobacco control policy in developing countries.