Frontline Measures Better than More Tobacco Tax Hikes

14 JANUARY 2016
FOR IMMEDIATE RELEASE

The Taxpayers’ Union says that new measures to curb smoking shouldn’t include more rounds of tax hikes, and should instead focus at frontline measures to support people to quit. Taxpayers’ Union Executive Director, Jordan Williams, says:

“On January 1 tobacco excise went up another 10 percent despite the evidence that taxes are having, counterintuitively, the least impact on lower socioeconomic groups quitting. The means that families are instead going without."

"The Government would be much better giving up some tax revenue by legalising e-cigarettes which according to the UK Government, are 95 percent less harmful and are the most popular smoking cession tool in Britain.”

“Taxes on tobacco are already more than three times the health costs of smoking. For a cheap $20 20-pack of cigarettes, nearly $16 is tax. Any higher and we risk an Australian style-illicit tobacco trade."

“If the Government does put up excise tax, other taxes should be reduced to compensate New Zealanders. Without a tax cut somewhere else, the Government’s use of smokers as cash cows becomes obvious.”

A copy of the Taxpayers’ Union report which was published on 1 January, Passive Income - How the Government uses smokers as cash cows, is available here: http://www.taxpayers.org.nz/passive_income

Key facts:

• Around 1.4% of government revenue comes from tobacco customs and excise taxes.
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• New Zealand continues to ban e-cigarettes, despite Public Health England finding that the devices are the most popular smoking cessation tool, and 95% healthier than traditional cigarettes.
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• Analysis of the effect of previous rises in tobacco taxes shows that they are becoming less and less effective, especially among low socioeconomic communities.
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ENDS

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