Associate health minister Casey Costello has made a fool of the Prime Minister, because the product she’s been fighting to get a tax cut for and he’s been backing her on is now illegal – and he doesn’t seem to know it.

Reporting by RNZ today shows that Casey Costello tried and failed to get regulations that would delay the ban on heated tobacco devices sales by two years. Cabinet agreed to defer the regulations by six months, and they came into force yesterday.

This makes the sale of Iqos devices that heat tobacco rather than burn it, illegal. Cabinet gave a hefty but temporary $216 million tax break to the tobacco industry for this type of tobacco, with the Prime Minister Christopher Luxon yesterday calling the tax break a ‘trial’.

Now that the device can’t be sold in New Zealand, the PM needs to explain how the trial will go ahead. Only people who already own the device can use the tobacco sticks that are inserted into the device.

“Why would Cabinet approve a $216 million cut on excise tax for tobacco that can only be used in a device that is illegal? No new people are going to be helped to quit smoking by this, and there can't be a trial now,” said Labour health spokesperson Ayesha Verrall.

“Did the Prime Minister know that by turning down the delay in the regulations coming into force, the sale of Iqos devices would be banned? The answer must be no because that makes the trial he referred to multiple times yesterday in the media impossible.

“If Casey Costello understood the implications of the regulations coming into force earlier but didn’t tell the Prime Minister then she has misled him and cabinet, if she didn’t understand then she lacks a basic grasp of her own portfolio.

“Even though the Iqos device is now banned, $216 million still sits on the Government’s books as a contingency for the excise tax break. That money could be spent on the myriad of demands on our health system, such as building Dunedin hospital and improving patient care.

“Putting aside $216 million in the Budget for a device that could still be as harmful to New Zealanders as cigarettes shows the Government’s got its priorities all wrong and is taking New Zealanders backwards,” said Ayesha Verrall.

Notes:
Excise is charged on the tobacco sticks that go inside the Iqos devices, so the reduction in excise duty may result in a reduction of the cost of those pellets for current users of Iqos, but no new people can buy the product.

Cabinet minute showing Costello asked for regulations to be deferred until March 2026, point 50 page 7: smokefree_2025_progressing_coalition_agrmnt_commitments_cab-24-min-0071.01_black_box_watermarked.pdf (health.govt.nz)

Cabinet minute showing the regulations were only deferred for six months, coming into force on 1 October 2024, point 9 page 2: smokefree_2025_-_cracking_down_on_youth_vaping_cab-24-min-0084_black_box_watermarked.pdf (health.govt.nz)

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