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Customs and Excise (Tobacco Products) Amendment Bill

Hon Tariana Turia

Associate Minister of Health

Customs and Excise (Tobacco Products) Amendment Bill

Friday 25 May 2012

I move that the Customs and Excise (Tobacco Products) Amendment Bill be now read a first time. At the appropriate time the Bill will be referred to the Finance and Expenditure Committee.

I want to first of all mihi to those visionaries who began the journey of smokefree legislation almost two decades ago. The Smokefree Environments Act in 1990 was one of the major turning points in New Zealand’s tobacco control history.

In the space of twenty years these people – too many to name - have reshaped our attitude to tobacco – and this Bill is but another step on that journey.

I want to also acknowledge the dedicated enthusiasm of officials who continue to impress me with their tireless efforts to support the Government’s agenda to be Smokefree by 2025. Tena koutou.

Mr Speaker, this Bill is about saving lives and protecting our future generations.

In the Budget debate there is always an avalanche of numbers that fall upon the public. But in my mind, there is only one number – and that is the 5000 New Zealanders that die each year due to smoking or exposure to second hand smoke.

It is profoundly disturbing that over half of all long term smokers die of a smoking related illness – losing an average of fifteen years of life.

It is not right, and we can and we must do something about it.

Mr Speaker, this Bill reflects the view that Smoking is not Our Future.

Increasing tobacco excise taxes by ten percent a year in each of the next four years is a key part of our strategy to prevent young people from taking up smoking and to encourage existing smokers to quit.

We know from New Zealand and international experience that increasing the price of tobacco is the single best thing we can do to reduce tobacco consumption and consequently prevent tobacco related harm.

After the four annual increases in tobacco excise promulgated in this Bill it is expected that a typical packet of twenty cigarettes will cost over twenty dollars or $1 per cigarette. This is likely to be a huge psychological price point.

I have read all the headlines which tell me that this is a hard-hitting move, and it will hurt.

But I ask the question - what sort of future are we shaping, if we don’t try to do everything possible to extend life expectancy; to improve health outcomes and to strengthen our families?

And I would have to say – which is the greater hurt when we consider the impact of this addiction on far too many family members – loved ones that are gone far too soon?

At the moment one in every five people over the age of fifteen continue to put their health and their lives at significant risk by smoking.

For Māori the data is even more distressing – some 155, 000 current smokers are Māori –45% of the Māori population aged between 15 and 64.

I care deeply that almost half our population are living with compromised health; and with the expectation of reduced life span.

And I know that together, this Parliament can act to change that situation and I look forward to broad support across the House.

We know that people are more responsive to price than they are to any other marketing intervention. A tax increase will stimulate smokers to make a quit attempt and successfully become smokefree.

One of the things that I’m most pleased about as a result of the last term changes, is that we have seen a large reduction in the number of young people smoking.

The annual ASH Year 10 student survey, which included 26000 or nearly 50% of all students in this year, shows:

· the lowest rate ever recorded of Year Ten students who were daily smokers

· and the biggest year-on-year drop in daily smoking was from 16.3% in 2010 to 11.3% last year for Maori girls (who have the highest smoking rates).

And that is a great result - and a result that I believe this entire House can be proud of, in voting for the previous tobacco excise increases.

Mr Speaker, the Government’s goal of a Smokefree New Zealand / Aotearoa by 2025 has in no uncertain terms signalled that we are serious about eliminating the harms that are caused by smoking.

The tobacco industry and wholesalers and retailers of tobacco need to understand this message – selling tobacco is a sunset industry in New Zealand - it is Not Our Future.

I was intrigued to read the National Business Review yesterday with the headline ‘higher tobacco tax may encourage black market’.

On reading closer, it was revealed that the robust research basis for the article was none other than the viewpoints of Imperial Tobacco –that’s the company that produces brands like Drum, Horizon and Peter Stuyvesant. Hardly an objective observer.

It was a pity that NBR hadn’t opted for a more balanced opinion by including the advice of people such as Professor Janet Hoek, from Otago University. In the Science Media Centre, Professor Hoek responded to these allegations with the following statement, and I quote:

“I have never seen any evidence to support these claims and closer analyses of the industry’s claims have raised serious questions about their validity”.

On the contrary, there is a wealth of research available which gives even more reason for introducing this latest legislation to reduce the long-term burden on the health system and make people’s lives better.

Just two days ago, research by Aspire 2025, funded by the Health Research Council and published in the international peer-reviewed journal Tobacco Control, revealed that smokers strongly support tighter regulation of the tobacco industry and almost half support an outright ban within a decade. I think that’s amazing.

Mr Speaker, these further four 10 percent increases are important and meaningful steps that are a necessary part of the Government’s commitments to achieve the 2025 smoke-free goal.

This Bill is but one of a multi-pronged strategy. From the 23 July this year a complete ban on the display of tobacco products will apply in every day retail settings. Out of sight, hopefully out of mind.

Cabinet has agreed in principle to introduce a plain packaging regime, following public consultation later in the year.

We have increased the fines for selling tobacco to minors from $2000 to $5000. And I have many other initiatives in progress, including stopping smoking in cars.

I have stated that my approach is to do whatever it takes to support people to quit. The motivation is clear – I want all New Zealanders to enjoy the highest quality of health – and of course to benefit from more money back in their pockets rather than feeding an addiction that sees their income literally going up in smoke.

But I am also clear that smokers should not have to do the hard yards on their own. It is about promoting and sustaining supportive environments which encourage us all to be smokefree.

I am really proud that we have been able to establish a fund of twenty million dollars under the umbrella of Pathway to Smokefree 2025. This fund gives us an opportunity to initiate programmes which support positive and healthy lifestyles, free from tobacco harm.

We are calling this an innovation fund because we are seeking wider solutions to support our goals of becoming a Smokefree Aotearoa.

Mr Speaker, there is one particular feature of this legislation that I want to describe in a little more depth.

When the increases in excise on tobacco products occurred in 2010, timelimited legislative amendments were made to exclude tobacco price increases from the annual CPI-based adjustments to the main benefits.

This Bill proposes to continue to extend the time-limited provisions to ensure that until the end of 2017 the following bills will exclude tobacco product price increases from required CPI indexation:

· Children, Young Persons, and Their Families Act 1989

· Education Act 1989

· Income Tax Act 2007

· New Zealand Superannuation and Retirement Income Act 2001

· Social Security Act 1964 and

· War Pensions Act 1954.

The purpose of the amendments is to ensure that recipients of social assistance are not reimbursed for increases in tobacco excise. To do so would contradict the reason for the increases, that is, to discourage smoking.

Mr Speaker, this Bill takes us another step towards a Smoke-free nation by 2025.

It is about continuing the momentum created by the previous three tobacco excise tax increases.

Raising tobacco excise is our most effective lever to influence the price of tobacco products. I commend this Bill to the House.


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