Tax and tobacco - stop screwing poor people says New Zealand’s deputy PM
Thursday, September 17, 2020 at 15:26 It's not often you hear anti-smoking campaigners support a freeze on tobacco duty but that's what happened in New Zealand in May.
After the Government announced that it was not going to increase tobacco taxation in its 2020 Budget, the director of Action for Smokefree 2025 (ASH) explained that while previous increases had helped many New Zealanders quit smoking, a further increase "would just be inappropriate".
"... what we have left is people from low socio-economic groups who are smokers and increasing the taxation is just punitive and wouldn't be serving what we want which is to help people to quit."
She added:
"What we need to help people quit is targeting specific groups, community-led initiatives, smokefree plan, we need the vaping legislation, we need a lot but it doesn't include more taxation."
If that wasn’t surprising enough Winston Peters, deputy prime minister and leader of the New Zealand First party (which is currently the junior partner in a coalition government led by Labour), made headlines yesterday when he said his party would reduce the tax on tobacco so the average pack of cigarettes is no more than $20 (approx £10.36).
Peters’ comments were made during the delayed general election campaign. Within hours New Zealand prime minister Jacinda Ardern had dismissed the idea, telling reporters that ‘she would not consider such a policy if she is re-elected’.
Nor will she entertain the idea in negotiations with New Zealand First should she need to cobble together another coalition government following the election.
Nevertheless it’s good to know that it’s not only groups like Forest that oppose punitive taxation on tobacco which disproportionately hurts those who can least afford it.
I’ve no doubt that the high cost is a major reason for some people quitting, though whether taxation should be used to force people to give up something they enjoy is another matter entirely.
Meanwhile those on low incomes who don’t quit are either driven further into poverty or towards the black market. Either way the policy is failing, not only in New Zealand but in many other countries as well.
Take Ireland. Each year the UK and Ireland compete to have the highest rates of tax on tobacco in Europe. However, according to a report in February:
Finance Minister Paschal Donohoe warned department colleagues they would be “kidding themselves” if they thought increasing tax on cigarettes would bring in more money.
Mr Donohoe had planned to give a reprieve to smokers in the last budget, saying in a handwritten note that he was “reluctant to implement” any further taxes on cigarettes.
However, the price of a packet of 10 cigarettes was eventually raised by 50 cents, with similar rises in the price of other tobacco products.
On October 13, four days before the New Zealand election, Donohoe will present his next Budget and he is currently being urged to raise the tax on a pack of 20 cigarettes by a further 80c.
What would be really progressive is if he looked to New Zealand for guidance and took into account the views of Action on Smokefree 2025 and New Zealand First.
When even anti-smoking campaigners are calling for an end to further increases in the tax on tobacco it’s time to take note.
Reader Comments (3)
A good first step. Next should be further reduction of draconian taxes and amending extreme smoking bans to accommodate smokers in designated indoor and outdoor venues.
It would be a good first step if it were to happen but I don't think it will. Governments are addicted to tobacco taxes and since when did ASH care about the poor that they have been screwing for decades? If ASH has a problem with the rate of tax now it is simply because they do not want to see their parasitic funding from Tobacco companies via over taxed consumers slipping away because of forcing us to the black market.
It is encouraging that the lifestyle controller prohibitionists of ASH, at least in New Zealand (in many other areas a model nation) finally realise the bleeding obvious fact that astronomical punitive tobacco taxes, which they stridently advocate, fuel the black market and are a vector for law enforcement corruption.
Would that the Australian prohibitionist bullies had such an epiphany, now that tobacco import duty exceeds $1000 per kilo or over 900% by value, an utter disgrace, but unsurprising now similar CV19 health pandemic pandemonium hysteria prevails. Thanks for all your efforts Simon, avoiding any unwanted swelling! 🦶 from Mark in Canberra, Australia.