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Maori paying for treaty settlements

In 2018, just $20 million was paid out in Treaty settlements. A new report shows annual tax taken from Maori via their consumption of tobacco, alcohol and gambling was $1.1 billion. If you do the math, last year’s Treaty settlement total was less than 2% of that tax amount.

The report by the New Zealand Institute of Economic Research, commissioned by Dr Marewa Glover of the Centre of Research Excellence: Indigenous Sovereignty and Smoking, quantifies Māori spend on these three behaviours in 2018. The amount paid in excise taxes, levies and GST is shown for Maori, Pacific peoples, Asian and European/others.

Maori paid $723 million in tobacco taxes, $264 million in alcohol taxes and $161 million in gambling taxes.

“If you’re working to improve Māori economic and social wellbeing, these figures are a kick in the guts. The amount of revenue that Government is siphoning off Māori each year just in taxes on tobacco, alcohol and gambling is way more than the 8.5% return post-settlement tribal entities are earning on their $9 billion asset base.” Dr Glover said.
“Recent news reports celebrated that the broader Māori asset base had grown to more than $40 billion. Imagine how much faster the Maori economy could grow, and how many Māori families could be lifted out of poverty, if spending on these behaviours could be positively redirected. As an example, $1.1 billion could pay for almost 1700 KiwiBuild homes. In the hands of Iwi, $1.1 billion could be used to build many more homes than that.”

The report shows that Maori total expenditure on alcohol ($731 million) and gambling ($376 million) appears to be proportionate to their number in the population. Māori total spend on tobacco ($1 billion) however is disproportionately high and accounts for 25% of the nationwide tobacco expenditure.

“Smoking rates for European New Zealanders and Māori have slowly reduced over the last four decades in tandem, which people think is equal and fair, but this is not what equity is about. No Government over that time has done anything effective to reduce the disparity between Māori and non-Māori smoking. European New Zealanders now have very low rates at 13.2%, whereas the average Maori smoking prevalence is 33.5%.”

The disproportionately higher rates of smoking among Māori means Māori are disproportionately hurt by punitive taxes and fines aimed at curbing smoking.

“Māori leaders need to be reminded that the Government decides what to tax and how much to charge. It is not necessary for the Government to keep increasing the tax, for example on tobacco – it’s a choice they make. The choice they’re making is to stunt Māori advancement by keeping the poorest groups who have the highest rates of smoking locked in poverty.”

To conclude, Dr Glover said, “it’s time the excess tobacco tax, that is, the extra amount that Māori disproportionately pay, is distributed to Iwi to reduce smoking prevalence. This should be quite separate from Treaty settlements.”

She believed that given the chance, Iwi would develop mana enhancing solutions like the Māori designedVape2Save programme which focuses on increasing financial literacy and teaching people how to get out of debt.

“The stress of being in debt, of not being able to afford enough or good food, the rent, the electricity bill etc, is a key driver of relapse to smoking. This is why the cumulative programme of taxes on tobacco, alcohol, gambling to name just a few taxes disproportionately paid by the poor, are so crushing.”

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