OPINION
Who benefits the most from cigarettes? According to academics and ministers it isn’t retailers, despite 6000 selling them and criminals robbing outlets for them. Surely then, it must be “big tobacco,” who academics, ministers and the WHO sees as a mutant cross between the boogieman, and the KGB.
The dirty secret is this: The biggest winner from the sale of cigarettes is the Government. Last year, it raked in a whopping $2.145 billion in taxes, despite the finger-wagging, distracting media releases and Smokefree Aotearoa 2025. Government coffers grew $68 a second off smokers who are among the poorest in our country, adding up to $243,663 every hour and $5.76 million every day over 2021-22. All from the smokes. All for the Government.
As 64 per cent of daily smokers are among the poorest, it means 200,000 plus daily smokers contributed around $1.4 billion of the $2.145 billion collected in tobacco taxes last year. No one can doubt retiring Prime Minister Jacinda Ardern’s sincerity, but how on earth did huge taxes on desiccated plant leaves escape her attention as the Minister of Child Poverty Reduction? What about incoming Prime Minister Chris Hipkins? He must surely know the connection between huge taxes and ram raids. How did this tax goldmine go over the heads of social justice warriors and academics alike?
“Goldmine” sums up the two taxes on tobacco. There’s the tobacco excise but then GST is slapped on top of it. On New Year’s Day, the tobacco excise went up 7.3 per cent (plus GST) taking a kilogram of tobacco to $1930 and that’s just the two taxes. As we await Hipkins’ reply to our crime manifesto, personally given to him on October 19 last year, is it any wonder dairies and service stations get ram-raided when a kilogram of tobacco costs $700 more than a kilogram of silver?