I'm going to do this for 2004 simply because there's two useful government reports available for that year: The National Drug Strategy Report on The costs of Tobacco, alcohol and illicit drug abuse and The ABS's report on Tobacco Smoking.

The Facts:

• Estimated net health costs of Tobacco: $318.4 million (National Drug Strategy)
• Estimated net productivity costs of Tobacco: $8,009.1 million (National Drug Strategy)
• Revenue from Tobacco Excise 2004: $5,237 million (Federal Budget)
• Tobacco Excise per cigarette (Feb 2005): $0.22621 (Tobacco in Australia) [This is currently significantly higher]
• Number of smokers: ~3.5 million (ABS)
• Percentage of adults who smoke: 23% (ABS)
• Percentage of adults who are ex-smokers: 30% (ABS)
• Percentage of adults who are not smokers: 47% (ABS)
• Decrease in life expectancy due to smoking: 10 years (BBC)
• Life Expectancy: 81.2 years (Wikipedia)
• Cost of all aged pensions (2003-2004): $19 billion(APA)
• Number of aged pensioners (2003-2004): 1,866,000 (APA)
• Total number of people 65 and over (2006): 2,644,374 (2006 Census) [this will be slightly higher than the 2004 numbers which I use for most of this article, but the difference would be minor and should not affect the results significantly]

The Math

• Net Health Costs per smoker per year: $90 ($318.4/3.5)
• Net productivity losses per smoker per year: $2,288 ($8,009.1/3.5)
• Tax revenue per smoker per year: $1,496 ($5,237/3.5) [not counting GST or company tax on tobacco companies]
• Portion people on pension: .71 (1,866,000/2,644,374)
• Pension cost per pensioner per year: $10,182 ($19,000,000,000/1,866,000)
• Cost of ten years pension: $101,820 ($10,182*10)
• Average pension cost of extra ten years extra life: $72,292 ($101,820*.71)
• Approximate Life expectancy of smokers, ex-smokers, and non-smokers: 75, 80, and 85 years ([.23*75]+[.30*80]+[.47*85]=81.2) [This makes the assumption that smoking for a while and then quiting only decreases your life expectancy by half that of smoking for the rest of your life. Also I should have used age at death in the following analysis, but life expectancy was easier to find, and 81.2 results in nice round figures. Since age at death would have been lower this will result in a slight bias towards higher tax rates in the following analysis]
• Average life expectancy for a 20 year old who smokes for the rest of their life: 55 years (75-20)
• Total health costs over 55 years: $4,950 ($90*55)
• Total productivity losses over 55 years: $125,840 ($2,288*55)
• Total Tax revenue over 55 years: $82,280 ($1,496*55)

Estimates of net costs

There's three ways I can see to calculate the net of the costs, and the corresponding "correct" Tobacco Excise:

Simplistic

Simply take the net health costs per a smoker of $90 a year and use that. This has the advantage of being easy to work out, and I expect most people would consider it reasonable (until they found out that the resulting tax rate is a lot smaller than the current rate). "Correct" tax rate: $0.0136 per cigarette (1,496/90=0.22621/0.0136).

Aggressively anti-smoking

Pretend the entirety of the productivity losses are a burden on the tax-payer in the form of welfare (which is obviously wrong, many of the productivity losses are borne by the individual in question, but some portion will be borne by the tax-payer). Since we are including the welfare costs in this, we need to include welfare savings as well (namely the aged pension). Net life-time cost to taxpayer: $58,498 ($4,950+$125,840-$72,292); "correct" tax rate: $0.1608 per cigarette (82,280/58,498=0.22621/0.1608).

Aggressively pro-smoking

Pretend that none of the productivity losses are a burden on the tax-payer in the form of welfare (which is obviously wrong, many of the productivity costs are borne by the individual in question, but some portion will be borne by the tax-payer), but still include the aged pension. Net life-time cost to taxpayer: -$67,342 ($4,950-$72,292); "correct" tax rate: -$0.1851 per cigarette (82,280/-67,342=0.22621/-0.1851); yes that's a subsidy almost as large as the current tax rate.

Conclusion

Obviously both the aggressively anti- and pro-smoking calculations are wrong, but they do provide some outer-bounds for the tobacco tariff (or subsidy) that can be justified by the "expense to the tax-payer" excuse. I suspect that the anti-smoking result is closer to the truth, and would oppose a subsidy regardless, but more information would be needed to confirm this.

As his health begins to fail, protesting farmer Peter Spencer swore yesterday he would die before giving in to a Federal Government decision to make his farm a carbon sink.

Mr Spencer ... claims the government declared his property in Shannons Flat, north of Cooma, a carbon sink without offering any compensation. He says the move has left him unable to earn a living because he cannot clear land and redevelop the farm.

A spokesperson for Mr Rudd said ... "The Government sets policy in the national interest. This policy will not be changed by threats of violence or self-harm.

Let's have a look at Obama's policies on two key issues, and examine whether they'd be good or bad for the world.

Economics

Obama plans to raise taxes on rich people, as in anyone middle class or higher. Now I'm sure Obama hasn't come right out and said it, but he plans to implement a whole heap of policies that will cost the government more money. That money has to come from somewhere, and Obama isn't going to be looking to cut funding to any Government departments. What about cutting funds to the military I hear you say. Well, Obama wants to put together a "Civilian National Security Force" with the same sort of funding as the current military. So even if Obama cuts the funding to the military to nothing, he's still missing the money needed for public health care, increased welfare, tax breaks for the lower class, and the such. This money has to come from somewhere, and that somewhere is middle and upper class America.

Now I guess some of you are wondering why the rest of the world should care if Obama raises taxes. Raising taxes decreases the amount of excess money rich people have. Rich people's excess money is what drives our modern economy, either directly or indirectly. Directly in that rich people buy stuff, lots of stuff, and indirectly in the form of loans. You know that loan you just took out to buy a new car, well the only reason the bank had the money to loan you is rich people gave some of their excess money to the bank to look after. Most startups are entirely funded by rich peoples excess money.

You know your job? Well, the only reason you still have it is because rich people have excess money. If they didn't they'd be competing with you for the job instead of spending their money, either directly or indirectly, on your companies products. Meaning there would be less jobs to go round, and more people competing for them.

Rich people having excess money is the foundation of our modern economy. Rich people having less excess money means the economy suffers, and nearly everyone suffers with it. Now, as the recent "credit crisis" has aptly demonstrated, what's bad for America's economy is bad for the world's economy.

Ergo, raised taxes in America is bad for the rest of the world. QED

War and Terrorism

Well now we're on a big one. Obama wants to withdraw from Iraq immediately, and makes a big thing about how he thought the invasion of Iraq was a mistake from the beginning. What effect does an America President who withdraws before victory has been achieved and who won't get into any further wars have on the rest of the world?

Well, lets have a look at Israel to start with. Israel is surrounded by enemies who outnumber her ten to one, the only reason she still stands is because America supports her. Israel's enemies are far from nice, these are the sort of people who think Hitler was a nice guy, and that terrorists blowing up Israeli school children is good reason to have a street party.

So, we've got the second holocaust as one potential consequence. Which surely all would agree was a bad thing. Now for sure, I'm not saying that it's guaranteed, or that it might not still happen even if Obama loses. I'm just saying that a victory by Obama significantly increases the chances.

What about Oil? I've already heard all the "No blood for oil!!!!" I care to, so don't waste your breath. What I'm talking about here is not cheap fuel for Americans. It's a little known fact that America gets only about 15% of her oil from the Middle East, and for that matter Australia is in much the same situation. This 15% deficit would be made up by opening up several of America's own oil deposits to drilling. So, the American government presumably thought a war, which are expensive in both money and lives, as well as being extremely politically unpopular, was a better choice then allowing a couple of new oil wells. I know a lot of people aren't real confident in Bush's intelligence, but nobody is that stupid, and [the democrat dominated] congress supported the war in Iraq as well. It simply can't have been for American fuel prices.

No, what I'm talking about here is guaranteeing the flow of oil to Europe. I can hear you wondering why the Americans get off deciding that they should sacrifice the lives of a bunch of Arabs and America soldiers for Europe. But, consider this: what would Europe do if it had no fuel because some petty Arab dictator decided he was going to hold the rest of the world's economy to ransom by cutting of the flow of shipping through the Persian Gulf?

Well, let me describe how Europeans get the majority of their food. First it's grown overseas (America is a big source) then it's transported on cargo boats, great big, fuel-guzzling, cargo boats, to ports in Europe. Now the food has made it to Europe, but most Europeans don't live right beside the ports, so it still has to be transported to their home cities. Guess what, that requires more fuel in the form of fuel-guzzling (again with the fuel-guzzling) semi-trailers to transport the food to the supermarkets. How does Europe get it's food without ready, easy access to oil?

Well, it doesn't, and guess what, very few people will peacefully starve to death, even in peace-loving Europe. This is where I get more unsure, does the EU get together and invade the Middle East, or does the whole thing collapse into civil war and famine? Who knows, but what I do know is that it wouldn't be pretty. Now again, I'm not saying it's a sure thing, but an overall worsening is almost guaranteed.

There's one final possibility that is weighs particularly on my mind, though again it's not a sure thing. Australia only survived the Second World War as a distinct, free nation as the result of America saving our skins. There are more than a few countries up in Asia that are over-populated, and severely lacking in natural resources, but still have the resources, mainly people, necessary to raise large armies. It would be unreasonable to believe that not one of these countries would appreciate the chance to have wide spaces and considerable natural resources of Australia for their own.

Daniel Hannan: Privatise the Elephant