Australia: Tobacco and gambling excluded from research and development tax breaks

In its Mid-Year Economic Update (Myefo), the Australian Government announced several policy measures, including the exclusion of tobacco and gambling activities from research and development (R&D) tax incentives. This decision is part of a stated desire to reduce public health risks and limit the impact of addictions. The measure, which will take effect from 1 July 2025, reflects the recognition of commercial determinants of health with a clear desire to decouple public funding from activities known to have negative impacts on public health and society.[1].

A risk-based approach to public health

The budget report highlights the motivations behind this decision. Regarding tobacco, the government states that research and development activities in this area contribute to perpetuating the consumption of harmful products and increasing risks to public health. Secondary emissions from emerging products, such as e-cigarettes and heated tobacco, expose not only direct users, but also non-smokers and non-users of vaping products to toxic substances, reinforcing health concerns.

Similarly, the exclusion of gambling-related activities is based on their link to addictive behaviors, which lead to serious socio-economic consequences. "By eliminating these activities from tax incentive schemes, the government is ensuring that it does not fund research that could harm society," the report states.

Measures in line with a strengthened anti-smoking policy

The exclusion of tobacco-related activities from tax breaks is part of a broader trend in Australia to strengthen tobacco control policies. However, as a recent parliamentary debate on e-cigarette regulation illustrates, these efforts are attracting significant pressure from the tobacco industry. In June, an initially ambitious bill to strictly ban e-cigarettes was weakened by manufacturers’ interference with politicians, leading to a compromise with the Green and Conservative parties, drawing criticism from public health groups. This change in the bill effectively allowed vaping products to be sold over the counter in pharmacies, reducing the expected public health impact of the initial measure.[2].

Despite these setbacks, Australia remains committed to limiting the tobacco industry's influence on its policies. The exclusion of tobacco-related activities from tax incentives for research and development marks a further step in this fight, affirming the government's determination not to support initiatives that could harm public health.

A strong signal in favor of priority public health

This decision is part of a broader vision of Australian public health policy, which is intended to be proactive. By aligning its budget choices with its health objectives, the government is sending a clear signal that activities that are likely to harm public well-being will not receive financial support from the State. Ultimately, the aim is to reduce the prevalence of risky behaviours, whether tobacco use or gambling, or other commercial determinants of health, thereby helping to address the health and social challenges they create.

©Tobacco Free Generation

RK

[1] https://www.theguardian.com/business/2024/dec/18/labor-myefo-mid-year-economic-update-budget-deficit-what-you-need-to-know

[2] https://www.generationsanstabac.org/fr/actualites/australie-revient-sur-son-projet-de-loi-interdisant-les-vapes-sans-ordonnance/