The tax break was introduced last year — against the advice of government officials.
The extension comes hot on the heels of last week’s allegations the New Zealand First party has been colluding with tobacco giant Philip Morris.
It also comes after NZ First list MP and Associate Health Minister Casey Costello led the repeal of the Smokefree Environments and Regulated Products (Smoked Tobacco) Amendment Act 2022.
It effectively scrapped laws aimed at slashing tobacco retailers, removing 95% of the nicotine from cigarettes and creating a smoke-free generation by banning sales to those born after 2009.
Health Coalition Aotearoa is calling for a public inquiry into tobacco industry influence and is also calling for the prime minister to reassign the tobacco and vaping portfolio away from NZ First.
A petition has also been launched by Vape-Free Kids NZ, calling on the prime minister to strip the tobacco and vaping portfolio from New Zealand First.
Coalition spokeswoman and University of Otago researcher Dr Jude Ball said the heated tobacco products tax break and the recent extension pointed to interventions by tobacco giant Philip Morris, which has a monopoly on heated tobacco products in New Zealand.
"It’s a poor use of taxpayer dollars at a time when our health system is already stretched," she said.
Labour Party list MP and health spokeswoman Ayesha Verrall has been telling media the tax break would be worth $300million to big tobacco.
In Parliament this week, NZ First leader Winston Peters denied there was a tax break for HTPs.
In 2023, the tax balance sheet for those alternatives was just $6m, and none of that money went to big tobacco, he said.
"What Verrall fails to mention, which she knows to be a fact, is that the figure of $216m — now, apparently, $300m in her quotes — includes the revenue lost from people who have quit smoking cigarettes.
"They no longer pay the excessive tax on cigarettes, and therefore the government doesn’t have that revenue on the balance sheet.
"Any person out there with an ounce of common sense can see that going from $6m to, now, $300m overnight is an outright lie that is being perpetuated continuously and repeated continuously by a certain few in the media."
He said New Zealand was now No 2 in the world for the lowest smoking rates.
"Our smoke-free policy — which is backed by Prof Bob Beaglehole from ASH — is working, and that’s a fact."
He said the government was doing everything it could to get the last few remaining "hardcore smokers" off cigarettes and on to alternatives, and those alternatives needed to be more affordable and more accessible.
However, Dr Ball said there was no evidence heated tobacco products helped people stop smoking, or that they were significantly less harmful than cigarettes.
"Yet the government, despite committing to a one-year trial, have extended the tax cut by two more years.
"This decision is favourable to the tobacco industry, but not beneficial to public health.
"This latest decision adds to a worrying trend of government policy decisions that align with tobacco company interests."
She said the government’s approach to evaluating if heated tobacco products helped people quit smoking was unclear.
"It is highly unusual for a government to run a trial like this which, by cutting a tax on HTPs, helps the sole seller of heated tobacco products to increase their product sales.
"Especially if there is no evidence that product helps people to quit cigarettes.
"Tobacco giant Phillip Morris are the sole beneficiaries of this tax cut."
