Budget increases taxes on those in need

Press release: ACT New Zealand
May 26, 2016. 2:18pm

ACT regrets an enormous lost opportunity to cut tax for some of those most in need. Instead, the government has delivered those households a $1200 a year tax increase.

"Currently, the average smoker smokes 10.6 cigarettes per day, taxed at 67c each, making $7.09 per day or $2,588 per year," says ACT Leader David Seymour.

"Sadly, the rolling 10 per cent tax increases for the next four years announced today will increase the annual tax on an average smoker to $3,786 per year.[1] That is $1,198 per year in additional taxes per smoker under this budget.

"The Government could have delivered a tax cut and made a bold and innovative health policy change by legalising e-cigarettes, to be sold without excise tax. Putting $3,786 per year into smoking households by giving them an excise tax free alternative to smoking would do more than any other poverty or public health initiative the Government is currently considering.

"Since 2010, tobacco taxes have doubled and yet overall smoking rates have gone from 16.3 per cent to 15.0 per cent and Maori smoking rates have gone from 37.7 per cent to 35.5 per cent. When first introduced, rolling 10 per cent tax increases were a bold step. Now that they’ve failed, the Government’s big insight is to keep doing the same thing.

"From a public health perspective, it is crazy that the Government bans the safe option while the unsafe option is available in every petrol station, supermarket and dairy in the country.

"For the sake of public health and poverty, the Government should have taken this budget as an opportunity to legalise nicotine e-cigarettes."

ENDS

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