The Government’s dirty little smoking addiction

The Government’s much-vaunted goal of achieving Smokefree New Zealand by 2025 is in tatters. Despite it being legislated as a formalised achievable target, it would now even stretch credulity to fashion it as an ‘‘aspirational goal’’.

Truth be told, Smokefree 2025 is utterly delusional, without drastic intervention. As delusional as the Government’s ‘‘Zero Road Deaths’’ target for its new Road Safety Strategy.

Last week, the Ministry of Health’s annual Health and Independence Report laid bare the faltering lack of progress in blitzing smoking. Back in 2011, when the Smokefree 2025 target was enshrined in law, the mid-term progress target was to ensure that fewer than 10 per cent of the New Zealand population was smoking by 2018, alongside halving Ma¯ ori and Pacific smoking rates.

None of the performance targets are within a bull’s roar of being attained, with 13.8 per cent of all Kiwis and 32.5 per cent of Ma¯ ori classified as smokers.

Smoking rates within Pacific people have barely budged in over a decade, still sitting above 21 per cent. In 2006, their prevalence rate was 24.8 per cent, while Ma¯ ori smoking rates were at 39 per cent. Has it really been worth all of the financial pain unleashed on smokers, not to mention the explosion in shop robberies?

Earlier this year Kathy Spencer, a former ministry deputy director-general, unshackled from the heavy hand of the public health bureaucracy, denounced the crippling cost of tobacco excise being slugged on smokers. She took issue with the contention that the taxes were designed to safeguard the health system from the fiscal burden of smoking-related illnesses, arguing on Stuff that ‘‘we don’t expect people who are overweight or have bad diets to pay extra towards their health costs’’.

But even if the tobacco excise take was directed at reimbursing the health system for costs incurred, the inconvenient truth remains that for at least a decade the taxpayer has actually being making a vast net profit from smokers.

In 2007, an Otago University study commissioned by tobacco control organisations calculated the cost of smoking-related illness to the public health system at $300 million-$350m.

The figure has been frequently cited by Treasury in its fiscal reports ever since. In fact, advice from Treasury to the government has frequently admitted that smoking saves the government money because smokers generally die earlier and fork out more in tobacco tax than their collective health problems cost.

Just look at what a financial gusher that excise has been for the state coffers. Since 2010, the government has increased the level of excise on a packet of cigarettes by nearly 100 per cent. In the past year alone, even though smoking rates are meant to be steadily dropping, the government hauled in $1.9 billion from tobacco excise and GST. With the 10 per cent annual excise hikes continuing until 2020, Treasury forecasts the annual excise gold rush, which now constitutes 83 per cent of the retail price of cigarettes, will billow to $2.2b by 2021.

Spencer has also referred to the perverse impact these horrifically grasping excise raids have had on poorer New Zealanders. ‘‘A pack a day smoker earning $45,000 a year would pay 15 per cent of their income, or close to $7000 per year in income tax and a further 15 per cent (nearly $7000) of their income in tobacco tax each year,’’ she wrote.

Lower-income Kiwis, who are disproportionately represented in our smoking rates, are actually paying more tobacco tax than income tax. It’s a ruthlessly regressive cash-grab.

Yet Dame Tariana Turia, a key Smokefree 2025 advocate, who purports to represent the best interests of poorer Kiwis, is unrepentant about the financial mauling, demanding even more punitive excise increases.

As cigarette prices started to rocket seven years ago, it sharpened my resolve to quit smoking when I turned 40. Yes, price can be a powerful motivator, but the government has milked that instrument out of all proportion, and without the desired outcomes. While driving through the American heartland last month, I noticed in many states a packet of 20 sells for under $5.

The national average is $5.89, compared to our retail price of $24. Yet our smoking rates are the same – 14 per cent. Ratcheting up the excise is no silver bullet. After calling it quits seven years ago, I sourced patches for a while from Quitline, but after they discovered I was non-Maori, the level of service dropped.

E-cigarettes and vaping were the great gamechanger for me, after being first introduced to them in Malaysia in 2011. If we’re serious about getting our smoking rates under 5 per cent, Quitline should be directed to subsidise vaping start-up packs, immediately.

But what about the government’s dirty little addiction? Even if it’s still serious about Smokefree 2025, how can it possibly kiss goodbye to that $2 billion annual killing in excise revenue?

The inconvenient truth remains that for at least a decade the taxpayer has actually being making a vast net profit from smokers.