The poorest New Zealanders are being hurt by the Government’s refusal to stop increasing tax on tobacco, says ACT Leader
In the March 2019 quarter, inflation rose six times faster
for beneficiary households than the general population, mostly due to tobacco tax increases that took effect on 1
January, according to Stats NZ.
“Tobacco taxes are failing to reduce smoking levels. Despite virtually doubling the level of tax, smoking rates have
fallen by only a few percentage points.
“An EY report
commissioned by the Government shows fewer than half of smokers have responded to tax increases by buying fewer tobacco
One cigarette cost about $1.50 in the March 2019 quarter, up from 54 cents a decade ago.
“The average smoker pays about $3800 in tobacco tax each year
. That is money families could be spending on food and clothing. Tobacco taxes are taking food out of the mouths of some
of the poorest children.
Tobacco makes up about 4.1 per cent of all spending for beneficiaries, compared with 2.5 per cent for all households.
“The Government says it is concerned about the cost of living, yet it continues these punitive tax increases.
“At the same time, onerous new restrictions on vaping have been announced, meaning fewer people will quit. The
Government should be making it easier for people to switch to vaping.
“Smokers already contribute
far more in taxes than the costs to the rest of the community caused by their smoking. Further taxes simply punish
people and represent a $2.2 billion tax revenue grab.
“The Government needs to quickly reverse this failing, regressive tax.”