Bills Digest No. 188  1999-2000Tobacco Advertising Prohibition Amendment Bill 2000


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details

Passage History

Tobacco Advertising Prohibition Amendment Bill 2000

Date Introduced: 31 May 2000

House: House of Representatives

Portfolio: Health and Aged Care

Commencement: On Royal Assent.

Purpose

To phase out the Health Minister's power under section 18 of the Tobacco Advertising Prohibition Act 1992 to grant an exemption from the general ban on tobacco advertising for sporting or cultural events of international significance.

Background

The objective of the Tobacco Advertising Prohibition Act 1992 (the Act) was to provide a national standard with respect to tobacco advertising.(1) This standard was apparently deemed necessary by the Commonwealth because the differences in State and Territory legislation and the lack of comprehensive legislation in some States and Territories on certain forms of advertising restrictions.(2)

The effect of the Act was to prohibit advertisements in the print media, films, videos, television or radio as well as outdoor advertising on billboards or public transport. (3)The sale or supply of any item containing a tobacco advertisement was also banned.

Under section 18 of the Act, however, the responsible Commonwealth Minister(4) may grant an exemption to the advertising ban for a sporting or cultural event if the Minister is satisfied the that the event is of international significance and that failure to grant the exemption would likely result in the event not being held in Australia.(5) There was a perception that Australia was already at a geographic disadvantage in securing such major international events, and that prohibiting advertising associated with tobacco sponsorship would act as a further disincentive. The Act also provides that the advertising allowed under an exemption granted must comply with any conditions imposed by the Minister. (With the 1997 Australian Grand Prix, for instance, the Minister required tobacco product advertisements to carry approved Commonwealth Health warnings of appropriate size.)

In June 1994, the issues surrounding the tobacco industry and the costs of tobacco-related illness was referred to the Senate Community Affairs Reference Committee for inquiry and report. One of the terms of reference for the inquiry was 'review of the current level of regulation of the...advertising [and] promotion...of tobacco products'. The Committee report (generally called the Herron report) was tabled in December 1995.(6)

The report recommended the following action in relation to section18:

  • That the Tobacco Advertising Prohibition Act 1992 be amended to remove the provision for the exemption of publication of tobacco advertisements in association with specified sporting and cultural events of international significance and that this be phased in by the year 2000, and
  • That the Commonwealth Government establish a national health promotion foundation or other appropriate national body to provide an alternative source of sponsorship funding to that provided by tobacco companies for major sporting and cultural events.

In September 1995, prior to the release of the Herron report, the then Minister for Human Services and Health established an independent 3-person panel to specifically review the operation of section 18. The terms of reference given to the panel was to review section 18 'with regard to its consistency with the principles and objectives of the legislation...and relevance to sporting events of international significance in Australia'. The panel was also tasked with consideration of the various options in its review, including:

  • phasing out of the exemption
  • modifying the criteria against which an exemption may be granted
  • modifying the extent of discretion available in granting an exemption
  • specifying conditions to be imposed if an exemption is granted, and/or
  • modifying the extent of discretion in the specification of conditions.

The report of the panel (generally known as the Rassaby report) was presented to the new Government in July 1996, although it was only publicly released in September 1997.(7) It concluded that:(8)

  • The Commonwealth Government should introduce legislation repealing Section 18 [with] such legislation to take effect from 2001. The new legislation should preclude the Government, during the phase out period, from approving new applications under section 18
  • If the Government decides to retain section 18, the section should be modified to make it harder to be exempted and carry tobacco advertising, and
  • The Government should enact legislation to create a National Health Promotion Fund containing monies hypothecated(9) from tobacco taxes. Among other things, that Fund should provide funding to lower profile sports affected by the non-availability of tobacco sponsorship monies.

The Government's response to the Herron Report was released in September 1997.(10) In relation to the above recommendations, the Government said:(11)

Because States and Territories may rely heavily on the financial benefits of hosting high profile sporting and cultural events, the Commonwealth Minister...will retain the power to exempt such events from the ban on tobacco advertising. The Federal Government will, however, more rigorously assess future proposals from sporting organisations which apply for [such] exemptions.

A health promotion foundation could be established through increases in tobacco excise [as suggested by the Committee] to replace a certain proportion of tobacco company sponsorship. The Commonwealth Government does not, however, currently adopt a policy hypothecation in the manner of some States. All revenue from tobacco excise is channelled in consolidated revenue.

Further, given that similar ventures to that proposed by the Senate Committee have been implemented in a number of States, it must be determined whether a similar Commonwealth Government body would unnecessarily duplicate functions.

In September 1998 the Minister for Health and Human Services announced that it would phase out the section 18 exemption so that no exemption would be possible for events after 1 January 2002, except for those events that held already been granted an exemption at that date in which case exemptions might be continued until 1 October 2006.(12)

The Tobacco Advertising Prohibition Amendment Bill 2000 gives effect to the Minister's announcement of September 1998. In introducing the Bill, the Minister commented that:(13)

This bill represents several years of negotiation with international motor sport, particularly the FIA-the Federation Internationale d'Automobile-and the international Grand Prix Corporation. Australia, because of its relative geographic isolation, was always subject to being held hostage or to ransom by losing such events, a condition that was not placed on European countries. We have been able to negotiate an arrangement whereby with these time frames international motor sport has given undertakings that Australia will not be placed at any disadvantage in future negotiations, because it gives them time to arrange alternate sponsors.

However, it is not clear why the Bill has taken 21 months to be introduced from the original 1998 announcement. Negotiation with the FIA regarding the implications of the advertising phase-out appear to have been satisfactory concluded by the time of the 1998 announcement.(14)

The phase out of the exemption by 2006 is consistent with a directive on tobacco advertising passed by the European Union in July 1998. Presumably the phase out dates in the Bill have been chosen to ensure parity of regulation between Australian and European international automotive events.

The events that have been granted section 18 exemptions over the last twelve months are:

  • 1999 Australian Indy 300
  • 1999 Rally Australia
  • 1999 Australian Motorcycle Grand Prix
  • 2000 Australian Ladies Masters Golf Championship, and
  • 2000 Formula One Grand Prix.

No applications have been refused over this time.

Main Provisions

Schedule 1

Item 1 replaces the existing subsection 18(2) which provides the Minister with the power to grant an exemption on the general ban on tobacco advertising in Australia.

New paragraph 18(2)(c) still requires the Minister to be satisfied the that the event is of international significance and that failure to grant the exemption might result in the event not being held in Australia.

However, the effect of new paragraphs 18(2)(a) and (b) is that no exemption can be granted for events after 1 January 2002, except where a similar event held before 1 January 2002 has already been granted an exemption at that date and no application for exemption has refused between the time of the earlier similar event and the application for the post 2002 event.

Concluding Comments

Had the Government in 1997 acted on the Herron or Rassaby Report recommendations to repeal section 18, tobacco advertising at major events would have presumably ceased around 5 years earlier than may be the case now under the current Bill (the years 2000 and 2001 respectively compared to 2006 for the current Bill). This decision to delay the repeal, (on grounds of the possible loss of financial benefits to the States) needs to be assessed in the context of the possible consequences of that delay on people's smoking habits, and the long-term personal and public health costs this may have involved for the Commonwealth and States.

According to recent estimates, the direct and indirect annual social costs of tobacco use amount to $12.7 billion nationally, with NSW paying $4.2 billion and Victoria $3.2 billion.(15) The most recent National drug use survey indicates that although the rate of regular smoking among all Australians has declined slightly in the ten years up to 1998, nearly a quarter of all teenagers in 1998 still smoked, with one in six being regular smokers.

It is commonly recognised that a risk factor in the development of adolescent smoking behaviour is exposure to tobacco advertising.(16) There is also evidence that the earlier one begins smoking the more likely it is to continue into adulthood.(17) One recent long-term British study argued that boys who cited motor-racing as their favourite television sport were much more likely to become regular smokers than those who did not watch (tobacco sponsored) motor racing.(18) There is also evidence that the banning of tobacco promotion can reduce consumption.(19)

In view of this, there is a possibility that the continued exemption for tobacco sponsorship for the 5 years in question might contribute to the onset or continuance of smoking among adolescents during that time, and also that an earlier ban may have contributed to reducing consumption among those who already smoke. Even if these effects were to be limited, there is still the possibility of longer-term financial impact for the States and Commonwealth.

Endnotes

  1. Submission by the Department of Human Services and Health to the Senate Community Affairs Reference Committee inquiry into the Tobacco industry and the costs of tobacco-related illness.
  2. ibid.
  3. The 1992 Act was amended by the Tobacco Advertising Prohibition Amendment Act 1995 in part because concerns that parts of the Act breached an implied constitutional 'freedom of communication in respect of government and political matters'. See the Hon Andrew Theophanous, House of Representatives Debates, 1 March 1995, p 1310. However the 1995 amendments did not materially affect the operation of those aspects of the 1992 Act covered by this Bills Digest.
  4. Currently the Minister for Health and Aged Care.
  5. Guidelines published in 1993 under the Act specify various matters that the Minister is to take into account in determining whether the event is of 'international significance' and whether Australia is 'likely to lose the event' if the exemption is not granted.
  6. A copy is at http://www.aph.gov.au/senate/committee/clac_ctte/tobacco/tobacco.pdf
  7. 'Government response to Herron report' Media Release The Hon Michael Wooldridge 3 September 1997.
  8. 'Tobacco, Sport and Health: A question of priorities' Report to the Minister for Health and Family Services, July 1996 at p. 69.
  9. 'Hypothecated' means funds from a particular source that are earmarked for a certain expenditure purpose.
  10. It appears that the Governments response to the Rassaby report was to give applications for section 18 exemptions 'greater scrutiny'. See Government Response to the report of the Senate Community Affairs Reference Committee on the Tobacco industry and the costs of tobacco-related illness, September 1997, p. 18.
  11. ibid, p. 17.
  12. 'All tobacco sponsorship to go by 2006' Media Release The Hon Michael Wooldridge 22 September 1998.
  13. The Hon Michael Wooldridge House of Representative Debates, 31 May 2000, p. 15696.
  14. The media release quoted Mr Wooldridge as saying that the FAI 'have assured me that automotive events will not be jeopardised by the phasing out of tobacco sponsorship'.
  15. Collins, D.J. & Lapsley HM The Social Costs of Drug Abuse in 1998 and 1992 Commonwealth Department of Human Services and Health, 1996); Collins, DJ and Lapsley HM, The Social Costs of Tobacco in Victoria and the Social Benefits of Quit Victoria QUIT Victoria, 1999.
  16. Pollay R and Siddarth S, et al 'The last straw? Cigarette advertising and realised market shares among Youth and Adults 1979-1993' AMA Journal of Marketing, April 1996.
  17. Evans, N., Farkas, A., et. Al., 'Influence of Tobacco Marketing and Exposure to Smokers on Adolescent Susceptibility to Smoking' Journal of the National Cancer Institute, vol. 87, no 20, pp. 1538-1545.
  18. Charlton, A, While D., Kelly S., 'Boys Smoking and Cigarette-brand-sponsored Motor Racing' The Lancet, 1997, 350, 1474.
  19. Bjartveit, K & Lund K, 1998. 'The Norwegian Ban on Advertising Products: Has it worked?' Norwegian Cancer Society and Norwegian Health Association: Oslo.

Contact Officer and Copyright Details

Angus Martyn and Maurice Rickard
19 June 2000
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 2000

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 2000.

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