The Taxpayers’ Union brought racial disparities into considerations when he denounced the government’s New Year tax hike for smokers.
Hapai Te Hauora, an organisation which aims to increase opportunities to enjoy good health, got in on the act of questioning the latest tax increases, too.
It noted that tobacco prices were raised by just over 11 per cent on January 1, in the last of a series of annual tax-based price rises announced in the 2016 budget. A 25-pack of cigarettes will cost more than $40.
It’s enough to drive impoverished smokers to drink – or robbery.
Jordan Williams, Executive Director of the Taxpayers’ Union, said tobacco tax from Māori was bringing more money into the government’s coffers than is paid in treaty settlements.
He described the increased tobacco excise tax as “a raid on the wallets of Māori”.
According to the data he brandished, the annual cost of tobacco tax to Māori is approximately $120 million more than the combined annual budget of the entire Vote Māori Development portfolio and the average annual amount spent on Treaty Settlements. He said:
“This is the inevitable result of charging the world’s highest income-adjusted rate of tobacco excise, and a huge proportion of smokers being Māori.
“In short, the Government gives with one hand and takes far more with the other, undermining decades of effort to improve outcomes for Māori.
“Even the Government’s own advisors are pointing out the Smokefree 2025 target doesn’t require never-ending taxes on the poorest. If the Government made it easier for smokeless products like vapes and heated tobacco to be marketed, current smokers may be more likely to shift over, improving health outcomes and reducing the burden of tobacco excise on themselves and their families.”
The Taxpayers’ Union says the excise on tobacco products should be weighted according to health risks, if reduced health risks can be proven.
As alternative tobacco products become more popular, Jordan said, there was a growing body of evidence showing reduced health risks for heated-tobacco, snus, and e-cigarettes.
Using price signals to encourage smokers to adopt a product with reduced health risks could make an enormous improvement to long-run health outcomes – in addition to limiting the burden of excise.
Williams referenced key findings in Ka Tukuna Atu, Ka Tukuna Mai in his press statement.
Hapai Te Hauora said it had been in support of the policy of raising the price of cigarettes progressively so it became unaffordable for people to begin smoking in the first place. But
“ … it now seems we need to do something different,” says Mihi Blair, GM of the National Tobacco Control Advocacy Service at Hāpai Te Hauora.
“Instead of placing the onus on those suffering from tobacco addiction, the Government needs to use the money generated from these taxes to actually invest into a range of comprehensive and strategic public health, harm reduction and disease prevention measures to help reduce our rates of smoking for those who have not yet been able to quit.”
Blair said raising tobacco price was widely seen as the most single most effective tool for reducing tobacco use overall.
There had been a drop in smoking rates since the introduction of excise tax in 2011.
“However, the latest NZ Health Survey figures still show problematic social differences; For example, the percentage of current European/Other respondents who currently smoke has dropped sharply, while the percentage of Māori who smoke has decreased far less.”
The positive effects of the tax hikes seemed to be limited to the more privileged, Blair said.
“Put simply there are far, far fewer dairies that supply cigarettes in Remuera, Auckland’s wealthiest suburb, than in Manurewa, its least wealthy suburb, and that pattern is nationwide.”
She cited research in Australia which suggests that lower income smokers quit in greater numbers when tax increases first hit, but that they are much more likely to relapse over time.
“Pressing the tax hike button over and over favours the more privileged, because privilege means you have other resources to help you quit.” says Blair.
Higher income smokers had been shown to have lower nicotine dependence, greater self-efficacy, and higher success rates when they try to quit than lower-income smokers.
“To support low-income smokers in quitting, we need to stop punishing them and start redistributing the money from tobacco sales more effectively,” says Blair.
“As long as tobacco is still for sale in Aotearoa, the tax paid on it should be earmarked for the communities that are suffering the most from tobacco harm.”
It would be interesting to hear what former Maori Party co-leader Tariana Turia – the architect and champion of higher tobacco taxes – has to say about the growing burden on Maori and the poor who are addicted to cigarettes.
In May 2016 she was having none of the claims by a Massey University public health researcher, Associate Professor Marewa Glover, that continued tax hikes were racist.
Glover subsequently set up the Centre for Research Excellence: Indigenous Sovereignty and Smoking and – according to RNZ’s Gyon Espiner – in just one year had received $1.5 million from the US-based Foundation for a Smoke Free World.
This was the third-largest grant the foundation has distributed anywhere in the world so far.
Oh – and the foundation’s sole source of funding is the tobacco company Philip Morris.
But Turia was oblivious to this link with the tobacco industry when she rejected the claim the taxing policy was racist; she said she still believed the policy was the best way to save the lives of 5000 people a year who died because of cigarette smoking.
Mind you, she brought some dubious reasoning into her rebuttal.
“This is not about being racist, because it was me who brought it in. There is absolutely no way that race comes into the argument.”
Moreover, she seemed disinclined to be persuaded by hard data, insisting:
“So unless she [Glover] can prove it to me, not by doing academic studies but by getting out and talking to our communities, then I’m highly unlikely to support her argument.”
But more recently, Turia declared she was upset that tax increases were still relied on as the biggest tool for incentivising quitting, saddling smokers with an unfair burden.
“I would have hoped that whoever stepped into this space as Minster would continue to look for better ways. Putting tax up was one way,” she said.
Smokefree 2025 campaigner and Ash director Ben Youdan was on the same wavelength, maintaining it wasn’t fair to saddle the smoking populations, so many of which belonged to low socio-economic groups, with such high tax burdens,
”Smokers are paying more than their share of the cost to the economy now.
“It’s an ethical question for the Government.”
Oh, and Stats NZ was saying annual tobacco tax increases meant Māori and low-spending households experienced the greatest rise in inflation in the March 2018 quarter.
Māori households were hit hardest with inflation, up 1.3 per cent, compared with the 0.8 per cent average, “driven by higher prices for cigarettes and tobacco, and interest payments,” consumer prices manager Geraldine Duoba said.
Cigarettes and tobacco make up about 3 per cent of total living costs for the lowest-spending households, compared to 1 per cent for the highest.
Hmm. Here at Point of Order we wonder when the Treaty of Waitangi will be dragged into this with some malcontent taking a case to the Waitangi Tribunal.