Cigarette price increases

What would happen if a packet of cigarettes cost $100, if $5 went up in smoke in about five minutes every time a single cigarette was smoked?

Would the number of smokers fall to under 5%, New Zealand's smoke-free goal in 2025? Would the black market for cigarettes boom? Would tobacco be traded as cannabis is now? Would its scarcity add to the allure?

The time to ask such questions is approaching. Finance Minister Bill English's Budget last week outlined another four years of 10% increases in tobacco tax, pushing a packet of cigarettes to about $30, about $1.50 a smoke. Given the rate is highest among the poor, the impost is huge. How, possibly, can a beneficiary or anyone on minimal wages fund their habit? The overall smoking rate is about 15%. The rate for Maori is 35%, Pasifika's 22%. It is estimated 25% to 40% of social housing tenants smoke and the rate is high among the mentally ill.

The established wisdom is that price increases encourage smokers to stop and discourage the young from beginning. The official Budget announcement claimed the excise price rises of the past caused tobacco use to fall by a quarter and thousands to quit. Logic suggests savings of thousands of dollars a year provide a convincing incentive.

At the same time, smokers have become modern-day pariahs, banished to street doorways, frigid outdoor smoking areas and private spaces. Smoking is seen as dirty, unhealthy and unfortunate.

For some ingrained smokers, giving up is just too difficult. They will pay whatever it takes to feed their addiction, just as the high - sometimes astronomical - cost of illegal drugs fails to stop users doing whatever is necessary to find their fix. In such circumstances, the price on families is heavy and hurtful. If continued tax increases could be guaranteed to make most remaining smokers stop, the benefits could be worth the pain. But there must come a point at which the burden causes too much collateral harm.

The illegality and cost of cannabis does not stop its widespread use, and a burgeoning cigarette black market seems inevitable. That then turns many smokers into criminals.

Although cigarettes pump poisons down people's throats, they are legal, and there is only so much that should be done to stop smokers harming themselves. They pay more than their share via taxes, even allowing for the earlier onset of disease. Tobacco taxes and GST on cigarettes could easily total more than $1billion a year. And when smokers die younger, as many will, the savings to the state are obvious.

Restraint in piling on more price rises should not be accompanied by a retreat from the war on smoking. Even if the Government succeeds in its 2025 goal and starves its tobacco tax golden goose, other fronts need advancing, notably plain packaging. Given the reactions of tobacco companies to its introduction in Australia, it seems likely that eliminating branding lessens the appeal of cigarettes. Quitting programmes also need to be stepped up where possible.

The Government's caution over e-cigarettes is sensible, at least for the time being. Debate is vigorous about whether vaping helps smokers quit or makes smoking attractive to the young. Some argue e-cigarettes provide a "gateway'' to smoking.

While the first questioning of the continuing increased taxes from an anti-smoking campaigner has emerged, the mainstream lobbies remain in the camp behind large excise increases, convinced about their continued efficacy. The Heart Foundation, for example, recommended a 40% tax hike followed by further 20% increments. The Maori Party jointly announced the latest Budget measure and ASH New Zealand backed it.

Smokers are a minority lacking influence; little wonder they are an easy target for more taxes.


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