Tobacco tax to jump 10pc at midnight

There will be three cumulative 10 per cent increases on all tobacco products. Photo / Herald on Sunday

Tobacco tax goes up 10 per cent from midnight, raising the price of a pack of 20 cigarettes by about a dollar to around $11, and two more hikes are in the pipeline.

The Government brought the legislation to Parliament under extraordinary urgency today and it will go through all its stages, putting in place three excise duty increases of 10 per cent - one at midnight, the next on January 1 next year and the third on January 1 2012.

Loose tobacco used by pipe smokers and to make roll your own cigarettes is being socked with a 14 per cent increase immediately to bring it into line with cigarettes.

Associate Health Minister Tariana Turia, a strong anti-smoking campaigner, introduced the bill and said the debate on it was going to be about life and death.

"We know that putting up the price is a powerful tool to reduce smoking," she said.

"It forces people to cut back, but more importantly it provides a strong incentive for smokers to quit and helps dissuade young people from over starting to smoke."

The Quit Group said it was preparing to see the number of people contacting Quitline for help to quit smoking to double or even triple.

"The last time we saw a significant taxation increase for tobacco was back in May 2000. Overnight we saw our call volumes almost triple from 6000 to 16,000 calls per month," Quit Group chief executive Paula Snowden said.

"We fully expect to see an increase in quit attempts, which is great, and our advisors are there to help people using the tax increases as a prompt for thinking about those other, more sustainable reasons for overcoming their addiction."

While it took on average six serious attempts to break the habit for good, those who contacted Quitline were five times more likely to succeed, she said.

Mrs Turia said 21 per cent of New Zealanders over 15 were smokers and tobacco caused 5000 deaths a year.

"For too many years we've turned a blind eye to this...the price of cigarettes has plateaued and the reduction in the number of smokers has stalled," she said.

"Helping smokers quit is a priority of this government and one of our health targets."

Labour supported the move.

Action on Smoking and Health (ASH) said it expected some smokers would quit in response to the tax increase.

"However a bigger increase would have resulted in great numbers of smokers quitting," said ASH director Ben Youdan.

Last year the tobacco industry discounted prices heavily by around $1 per packet, so even with this increase we are treading water in terms of tobacco affordability, he said.

"We've seen that the tobacco industry has an ability to take smaller margins and absorb tax increases, and we hope they do not exploit this opportunity to encourage quitting.

"The upside of a staggered approach is that it will give smokers and the support systems around them the time to prepare for quit attempts on a large scale."

The Salvation Army said it applauded the move, but wished the Government had the courage to act as harshly against alcohol.

"We hope a government willing to recognise the harm tobacco causes will have the courage to more heavily tax alcohol, which has even wider community costs and detriments," Salvation Army spokesperson Major Campbell Roberts said.

The Drug Foundation said the decision on tobacco puts the prime minister's rejection of an excise increase for alcohol in stark contrast.

"International and local experience consistently shows the effectiveness of excise tax increases on changing smokers' behaviour - it helps current smokers cut down and deters potential new smokers from starting," foundation executive director Ross Bell said.

"The same can be said for alcohol excise tax increases. Research shows that raising the price of alcohol can reduce alcohol-related harm; it reduces drinking by heavy drinkers and deters moderate drinkers from becoming heavy drinkers."

The Royal New Zealand College of General Practitioners welcomed the excise tax, saying it would improve the health of many people

Despite progress in tobacco control, more than one in five New Zealanders still smoke tobacco regularly and smoking prevalence was much higher for Pacific peoples (28 per cent) and Maori (44 per cent), the college said.

- NZPA