Tobacco tax hike is ‘not a smart call’

The government’s plan of reducing the numbers of people smoking is not finding favour with either retailers or smokers themselves.

Tax on tobacco went up 10 per cent on January 1 - the second of four annual increases, aimed at making New Zealand smoke free by 2025. The Taxpayers’ Union has released a report saying tax hikes will only serve to increase illegal sourcing of tobacco through theft or the black market.

The owner of Coronation Dairy in

New Plymouth, Raymond Ou, said he was 100 per cent certain robberies would increase with the price rise.

‘‘They know there’s not much cash because it’s mainly Eftpos, but one packet of smokes is easily $20,’’ he said.

‘‘There’s more risk for dairies and petrol stations.

‘‘By putting the price up they won’t stop people smoking. I don’t think that is a smart call.’’

Dairy owners would also be affected in the amount of insurance they had to pay, he said.

‘‘The insurance company have to recalculate it.’’

He said many customers had complained when he told them the new price, but some people would still buy them.

Ben Davies and Travis Brown, who had travelled to Taranaki from England, were shocked at the steep price rise in New Zealand cigarettes with the four-year increase.

‘‘We haven’t got anything like that in England,’’ Davies said.

He said while it might work to reduce smoking, it wasn’t a nice way to do it.

‘‘We’ve only been here a week so we haven’t felt the full effect of it but we probably will.’’

Tristan O’Leary said the tax increase ‘‘sucks’’.

‘‘There’ll be a lot more poverty in the long run,’’ he said.

Tyla, who did not want to give her last name, was concerned about the affect on families.

‘‘For families that have lots of kids or something and parents that are addicted to smoking, they’re going to spend all their money on smokes and not their children.’’

She said the tax increase was slowing down her buying of cigarettes, but was not convinced the government’s plan would work.

‘‘It depends on whether people want to quit or not.’’

The Taxpayers’ Union said in its report the average smoker was nearly $3000 a year worse off than in 2010.

‘‘Tobacco tax hikes cause enormous harm, devastating the incomes of the vast majority of smokers who haven’t quit,’’ executive director Jordan Williams said.

‘‘As detailed in this report, for someone on the average wage, smoking will see them pay 17.7 per cent of their income on excise tax, about the same the same worker pays in PAYE.’’

Quitline’s Andrew Slater said tax increases did ‘‘get people’s attention’’ and motivated smokers to ‘‘want to quit’’.

‘‘The number of 15 to 17-yearolds who are smoking has fallen from 12,000 in 2016, to 8000 in 2017.’’

British American Tobacco estimates smokers spend $2.5 billion on cigarettes and tobacco in New Zealand each year, with about 74 per cent of that going to the Government in tax.