Australian smokers to cough up over $45 for a pack of cigarettes by 2020

Tobacco excise Down Under will increase 12.5% every year...

Australia is set to become the most expensive place in the world to have a smoking habit.

Already one of the countries that puts the most excise duty on tobaco products, by September 2020 a pack of cigarettes will cost over $45AUSD - the equivalent of close to €30.

In its latest budget, the government has unveiled its plans to bump up the excise on tobacco by 12.5% every year from 2017 to 2020.

By the end of the plan, 69% of the price of each pack will be tax.

The Australian Treasury is calling the move a health measure, and noting that the World Health Organisation recommends a 70% tax on the price of a cigarette.

Budget documents show that increasing costs have reduced the number of smokers in the country. In 1993, nearly 25% of Australians smoked. By 2013, this had fallen under 15%.

It will also provide a boost to the public coffers, of course.

Treasurer Scott Morrison told Australia's parliament:

"The net impact of the tobacco measures will raise $4.7bn over the next four years".

Some $7.7m of that will go to the Australian Border Force to help police the illegal importation of tobacco products amid fears that the black market will take hold of the industry.

An undisclosed amount will also go to the ongoing defence of Australia's plain packaging laws.

A 2015 Deutsche Bank study showed that Melbourne was the most expensive city in the world for cigarettes, with an average pack going for $18.45 last year. Sydney followed, along with the New Zealand cities of Auckland and Wellington. A pack in London cost $13.35.

Ireland is currently the most expensive country in the EU for smokers.

A 50c increase in Budget 2016 saw the price of a pack of 20 retailing at an average of €10.50. VAT amounts to €8.37 of that.

There were calls then for a statutory agency to be established to deal with the black market, with smuggling activity from criminal gangs apparently costing €1 billion in lost cigarette duty revenue.

While the biggest increases on excise came in 2000 and 2003 when former Minister for Finance Charlie McCreevy pushed the price of a pack up 63c and 50 respectively, there was some respite during the recession.

Since 2011, the price of 20 cigarettes in Ireland has increased by €1.35.

The bulk of the increases have been applied in the last two years, however, with 40c added in 2015 and 50c added in 2016.

While not as dramatic as Australia, if we take that recent trend as a rough gauge and add 45c for the next four years, by 2020 the price of a pack of cigarettes in Ireland will cost €12.30.