GUEST BLOG: Jin An – Tobacco tax bender

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