Cigarette price increase 'tax on poor'

COSTLY: A pack of 20 could cost $30 by 2020.

Legislation to hike the price of cigarettes to about $30 a pack by 2020 has passed - despite being condemned by New Zealand First and Act.

Act's support agreement with National meant the party's leader, David Seymour, voted for the change because it was a Budget measure.

But he said the 15 per cent of adult New Zealanders who smoke each day - about 550,000 people - would be hit hard, and estimates of those who would quit were overstated.

Instead, many would sacrifice spending on food and other essentials, and their children would suffer, Mr Seymour said.

"This policy will take tobacco tax on the average smoker from $2800 per year up to $3800, and that is not an enlightened policy, it is a highly regressive tax and the costs imposed in terms of poverty and deprivation on the people most in need far outweigh any possible benefits."

The tax on tobacco will rise by 10 per cent on January 1 each year for the next four years.

That is expected to bring in an extra $425 million in tax over that period.

The smoking rate increases to 35 per cent for Maori, and 22 per cent for Pacific people.

New Zealand First MP Fletcher Tabuteau said the increases were a tax on the poor, and the revenue would plug the gaps in New Zealand's health system.

He said people would not quit smoking because of the price increase, and it would likely further the blackmarket sale of tobacco.

Maori Party co-leader Marama Fox, who jointly announced the tax hikes yesterday with Associate Health Minister Peseta Sam Lotu-Iiga, said she was proud to advance the work of the party's previous leader and former associate health minister Dame Tariana Turia.

Labour MP Louisa Wall said her father had died because of smoking, and said the increases were Dame Tariana's legacy. She also acknowledged Hone Harawira's past work to reduce smoking rates.

Green Party health spokesman Kevin Hague said it was "certainly a pleasure" to see National MPs Todd Barclay and Chris Bishop - both of whom worked for tobacco giant Philip Morris - voting for the tax increases.

He said the revenue from the tax should be entirely used to get New Zealand closer to the smoke-free by 2025 goal.

The Custom and Excise (Tobacco Products - Budget Measures) Amendment Bill passed its third and final reading 109 to 12 votes, with support from all parties except New Zealand First.