Northlanders add to smoke tax take

Northland's smokers are puffing away an estimated $73 million every year just in cigarette taxes.

The Northland District Health Board area's 20,000 smokers make up around 4.3 per cent of the nation's total - and an estimated $73.7m of the nation's $1.7 billion of annual tobacco taxes.

Figures from Quitline show the support service was contacted 2044 times by Northlanders in 2016 - around 1 in 10 smokers.

This January's figures - which is when taxes rise and many people make annual resolutions - showed a 17 per cent increase in the number of people contacting the service compared to January 2016.

This is around $3700 per year for the average smoker, or $7400 per couple - just in taxes. Around 75 per cent of the cost of cigarettes is tax, including GST.

A $20 pack a day smoker now pays more than $7000 a year in total.

While the Ministry of Health said price increases were the most effective discouragement for smokers to continue, a leading economist says annually raising tobacco taxes is "not justifiable".

Dr Eric Crampton, head of research at think tank The New Zealand Initiative, said there were a number of issues with the taxes. These included the Government's disputed estimate of the public health costs of smoking, the effectiveness of price increases as discouragement, and the effect of rising costs on poorer households.

"[The tax increases] are not justifiable. The harmful effects on poor households who continue to smoke are so large relative to the number of people who might stop smoking based on it," Dr Crampton said.

Treasury admitted in 2012 tobacco taxes may already cover the costs it imposes on the Government.

"Further increases in tobacco excise may not be justified," Treasury said in the report.
Since then the tobacco tax take has increased almost $500m.

The Government spent around $61.7m nationwide on programmes helping people stop smoking or not to start in the first place, less than 4 per cent of total tobacco tax revenue.

This money goes to stop smoking medicines and aids, including nicotine replacement patches, district health boards, organisations including Quitline, other community-based services, and campaigns, among other initiatives.

Ministry of Health spokesman Sam Kunowski said the control interventions have had a "significant impact on smoking rates and tobacco consumption over the last decade".

He said daily smoking rates have fallen from 18.3 per cent to 14.2 per cent in the last decade, and total consumption of tobacco has fallen 25 per cent between 2010 and 2015.
Mr Kunowski did not directly respond when asked if the Ministry of Health had any plans to increase the amount spent on its tobacco control programmes.

The Government has announced e-cigarettes containing nicotine will be made legal to sell, but not until late next year.