GUEST BLOG: Jin An – Tobacco tax bender

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Last week, we saw another dairy get attacked by intruders; the latest in a string of attacks in Auckland. The Police say that most of the robberies are due to tobacco prices. While some were quick to jump on the “get tough on crime” band wagon and called for tougher penalties: a political manoeuvre that proved successful throughout the 80s and 90s stemming from Nixon.

But when New Zealand has one of the highest rate of incarceration in the developed world; when we know we have a raging meth epidemic; when we know there is increasing child poverty and homelessness; those calls for harsher penalties ring rather hollow and are not built on any evidence as to how we can actually prevent these attacks.

What is becoming clear is that this government’s incompetent management of tobacco tax is pushing tobacco into the black market alongside cannabis and meth. While other developed nations are choosing to take control of drug circulation in their communities, our government has managed to put another drug into murky depths of black market: into the hands of criminal organisations and gangs.

The Treasury report, as far back as 2012, noted that smokers pay far more than what they claim in health services. Yet our government continued to jack up the taxation like a twisted game of hungry-hungry hippo blinded by greed. Tobacco tax was increased 40% in 2013 and then 20% for each of the successive years: 2014, 2015, 2016. The duty-free quota was also decreased down to 2 packs (50 cigarettes).

At the same time the government dragged its feet on introducing e-liquid cigarettes; a less harmful method of ingesting nicotine. For most of Minister Coleman’s reign, we had an absurd system where kiwis could buy the equipment to use e-cigarettes, but could only import the liquid as local sales were banned. Coleman seems to care as much about kiwis hurt by this regime, as he does about the mental health workers and patients he labelled left-wing extremists.

The principal problem with tobacco taxation is that it bears heavily on low income households and individuals, quite a high proportion of whom are Māori or Pacific. This is acknowledged in the Treasury report. Treasury further acknowledges that there is low risk of illegal importation with NZ being an island. So what happens? People steal from each other within New Zealand: people rob the places where these now expensive products are sold.

What concerns me most is this puritanical approach to health regulation that seems so draconian and frankly incompetent to the point of absurdity. Health regulations should be a balancing exercise between a person’s liberty and social harm and cost. In the case of tobacco tax, the government has crushed personal liberty, without promptly introducing the less harmful option and continued to harvest far more tax than what is appropriate to address the health costs of smoking.

Furthermore, a push into the black market means that our kids can access cigarettes far easier, alongside meth and cannabis that are already in this realm. We all know the potential harm caused by these products to the growing brain. But I doubt the gangs check the IDs of our kids. It is desperately time to take control, of all of these substances, rather than just allowing the black-market to expand.


Jin An is the Labour Party candidate for Upper Harbour

10 COMMENTS

  1. Great post! There is definitely a class basis to the taxing of tobacco. Like GST and income tax, there is no legal way for working class people to avoid tobacco tax, (if they use the product).

    For mine, I’d get rid of the profit element. Kick out the companies that push cigarettes. Make tobacco available on prescription and treat it as a health issue.

  2. Back in 1984 I saw NZ get attacked by intruders. The were the Big Four Banks. And they’ve done more damage to NZ than an army of fat kids with pocket knives stealing packaged dried plant material which proves highly addictive once ignited then inhaled. More on this later… right now? I have to leap from my living space and go out there and SUCEED ! BOOM ! WHAP ! DIDDLE ! GO ME ! GO THE BANKS ! ! ! GIMME DEBT TO BUY A 200 MPH SUPER CAR WITH A WINDOW IN THE MIDDLE SHOWING OFF THE ENGINE ! WHOOP ! POW ! SUCEED! DOMINATE! WINWINWINWINWINWIN……. Again. WHOOP!

  3. The answer is simple. Stop it! stop selling ciggarettes, make smoking so undesirable that you have to go to a specific secure supplier.

    • You believe your point of view which is fair enough.
      You want to impose your point of view on everyone using the power of the law.
      That is fascism.

    • The only way to stop the robberies is to make cigarettes affordable.. It is not illegal to smoke here or anywhere else in the world.

      If alcohol was priced so high that only the rich could afford to drink what do you think might happen ?

  4. I’m no expert but if the smokes are stolen surely the tax does’t get paid so they are stealing from the govt and should get charged with tax evasion as well.

  5. This article is long on criticism and short on solutions.

    Making the product more accessible (cheaper) is not a solution.

    I’m still adjusting to life after a double lung transplant and in my view, for what its worth, tobacco should be simply made illegal and the multinational arsehole companies who still push their deadly product and for years lied to the public about its health risks, prevented from operating here. All current addicts can be registered and (as suggested above) continue to receive tobacco or substitute through prescription or similar scheme.

    By the why, wasn’t it the Labour Govt that introduced the current schedule of increasing taxation on tobacco? At least its nice to know the Labour party are capable of re-examining some of their past policy, one hopes that spirit of re-examination might yet extend to their continued embrace of neoliberalism.

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