Tobacco excise rise part of wider programme
Hon Tariana Turia
Associate Minister of Health
24 May 2012
Tobacco excise rise part of wider programme
Tobacco excise taxes will increase by 10 per cent a year on 1 January in each of the next four years as part of a wider government programme to prevent young people from taking up smoking and encourage existing smokers to quit, Associate Health Minister Tariana Turia says.
This will be in addition to the annual inflation-indexed increases in tobacco excise, and follows a 40 per cent increase in excise since April 2010.
Budget 2012 also provides $20 million over the next four years for a new innovation fund, Pathway to Smoke-Free 2025, for programmes to discourage smoking uptake and help more New Zealanders give up.
“These measures will help improve the health of New Zealanders, reduce the long-term burden on the health system, and contribute to the Government’s goal of making New Zealand smoke-free by 2025,” Mrs Turia says.
The excise increases will increase the price of an average pack of 20 cigarettes to more than $20 by 2016.
“These tobacco tax increases will have a major impact, particularly as they come on top of three earlier tax increases since April 2010,” Mrs Turia says.
“We know that for every 10 per cent increase in the price, tobacco consumption falls by about 5 per cent Many smokers will quit and many more will reduce their tobacco consumption.
“We also know that over 80 per cent of smokers wish they had never started smoking and that around 70 per cent have been actively trying to quit.”
Mrs Turia says the Government’s 2025 smoke-free target is ambitious.
“Existing policies have set us well on the way to achieving our goal, and will continue to be at the heart of our approach. However, on their own they will not get us to our target by 2025.”
The $20 million of funding over the next four years will help to create smoke-free environments by investing in the design, development and promotion of innovative efforts to reduce the harm and wider costs of smoking.
“Although tax increases are effective, the Government knows that tobacco tax alone will not achieve our objective,” Mrs Turia says. “We need to support those who are struggling to quit. Policies complementing the tax increases are therefore essential.
“The ill-health and premature loss of life caused by smoking – particularly among Māori – is an outrage and is entirely preventable. It hinders economic and human growth in our country and costs millions of dollars in healthcare.”
Budget 2012 delivers on the Government’s commitment to strengthen tobacco reform to invest in the health and wellbeing of future generations.
FACT FILE
• An estimated 5,000 New Zealanders die each year due
to smoking or exposure to second-hand smoke.
• Half of
all long-term smokers die of a smoking-related illness,
losing an average of 15 years of life.
• About 650,000
New Zealanders, or one in every five people over the age of
15, continue to put their health and lives at significant
risk by smoking. This figure includes approximately 155,000
current smokers who are Māori – about 45 per cent of the
Māori population aged between 15 and 64.
Recent progress:
• The recent ASH Year 10 survey showed
smoking prevalence among 14- and 15-year-olds to be the
lowest ever. In 2000, 15 per cent of year 10 students
smoked daily. By 2010 this had fallen to 5.5 per cent. In
2011, 4.1 per cent of year 10 students were daily smokers.
The decline since 2010 is the largest year-on-year decline
since 2003/04.
• Tobacco will be out of sight in retail
outlets from 23 July 2012.
• ABC target achievements:
For the 2011 calendar year, the Better Help for Smokers to
Quit Health Target saw 129,147 patients receiving brief
advice to quit smoking from their local GP, nurse or other
health professional. A further 114,298 patients received the
same advice and support to quit during their hospital visits
in 2011.
• Cabinet recently endorsed plain packaging
in principle. As a first step, consultation will take place
later this year to gather evidence from and seek the views
of all interested parties.
Impact of
previous excise tax increases:
• In 2010 April, a tobacco tax increase of
25.4 per cent was implemented on loose tobacco (to equalise
the tax with manufactured cigarettes by weight) and 10 per
cent on factory-made cigarettes. Excise on both rose a
further 10 per cent on January 2011 and January
2012.
• This has pushed the price of a pack of 20
cigarettes up by 40 per cent, giving smokers a strong
financial incentive to quit. Results are already starting to
show – after the first round of increases, roll-your-own
tobacco sales were down 14 per cent in 2011 and sales of
manufactured cigarettes fell 6 per cent.
• A media
report based on weekly data for supermarkets showed
cigarette sales decreased by 13.9 per cent and loose tobacco
sales decreased by 17.9 per cent after the April 2010 tax
increase, compared to the six months before.
• Based on
annual tobacco company statutory returns, tobacco
consumption (by volume) fell by 14 per cent from 2009 to
2011.
• Quitline figures indicate over 8,000
people contacted it for support to quit smoking in January
2012 alone – immediately following the last instalment of
the tobacco tax increases.
ENDS