New Zealand using smokers as cash cows

The New Zealand government has been accused of using smokers as cash cows, according to a report by Ruth Hill for Radio New Zealand.

The executive director of the Taxpayers’ Union, Jordan Williams was quoted as saying that a start-of-the-year 10 percent cigarette tax hike – the fourth and final scheduled increase – meant the poor would suffer the most because they were least likely to quit.

“Treasury’s advice to the government is that these tax increases are working less and less, and surprisingly they are having the least impact on the lowest socio-economic groups,” he said.

“Just because a consumer base is poor, it does not mean that the government is any more justified in making consumer health choices for them.”

The $20 price of a pack of 20 cigarettes now includes nearly $16 in tax.

If the government were serious about curbing smoking, it would allow the sale of healthier alternatives, such as electronic cigarettes, Williams said.

“It seems the only reason the government here refuses to allow them to be sold is to protect the revenue stream from the taxes on traditional cigarettes,” he added.

The anti-smoking group ASH (Action on Smoking and Health) is arguing for more tax increases.

Its director Stephanie Erick said the tax increases of the past four years had been highly effective in cutting smoking rates and deterring young people from taking up the habit.

“We would like to see more surprise tax increases and higher tax increases,” she said. “To reach New Zealand’s smoke-free goal of 2025 we need taxes to continue and we need the standardised packaging to pass as well.”

Erick conceded that “in some ways” smokers saved taxpayers money because they tended to die younger and so did not get to claim many years of superannuation.

“Rather than just going into the government coffers, we think the money from tobacco taxes should go to those who need it most, with targeted programs to help people quit,” Erik said.