British American Tobacco will be pleased.
Hot on the heels of the Government’s walk back from the previous Government’s smoke free policies is the disclosure that the Government is considering halting increases to excise duties on tobacco. Currently the tax on tobacco increases by the rate of inflation. The Government is investigating the implications of freezing increases for the next three years.
And the way this news has come out is really messy.
From Guyon Espiner at Radio New Zealand:
Cigarettes would be insulated from the full impact of inflation under a proposal from New Zealand First Associate Health Minister Casey Costello.
Currently, tobacco excise is increased each year in line with the Consumer Price Index (CPI).
RNZ has learned Costello is proposing a three year freeze on CPI-related excise increases for smoked tobacco.
But when RNZ put that to her in an interview Costello said she hadn’t looked at it.
“I’ve had no discussions on that at all. Like, that’s – it’s not even something I specifically sought advice on,” she said. “I haven’t looked at a freeze on the excise at all.”
But RNZ has seen a Ministry of Health document, sent to Costello, which says the minister is proposing to freeze the excise tax.
“The additional information you provided to us proposed also to freeze the excise on smoked tobacco for three years,” the document says.
While Costello told RNZ she had not asked for advice on the issue, the Ministry of Health document appears to contradict that.
The document sent to Costello asks: “whether you would like advice in January 2024 to include implications of a three year freeze on CPI-related excise increases for smoked tobacco.” The ‘yes’ option is circled in the document, which was signed by Costello on 20 December, 2023.
On the face of it Costello’s comment is a porkie pie. She said that she has no discussions on the issue and had not sought specific advice on it even though she clearly had.
On Radio New Zealand this morning she claimed that what she said was truthful because she had sought general advice not advice on this specifically. There may be a way to reconcile these statements but what she said was extraordinarily misleading.
As I said previously the change in the smoke free policy would result in more money earned through tobacco excise tax increases but greater levels of cancer and in the medium to long term increased pressure on the health system.
If increases in the tax were shelved the amount of tax gathered would conceivably go down but an increase in smoking rates and the amount smoked would no doubt affect this.
Costello claimed that her desire is to make things easier for smokers. If she really wanted to help them she would be working to increasing the minimum wage and benefit levels or her party would not have helped wind back the Fair Pay policy. Her claims of a desire to help ring hollow.
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