NZ First leader Winston Peters has hit out at the rising price of tobacco as taxes are increased under the latest budget, saying obesity should be looked at first.

"Hiking tobacco taxes in the budget is just a lot of fat people sitting in their ivory towers telling smokers what to do."

Mr Peters said the new taxes were making smokers feel "guilty", and unfairly targeting them.

"The Government is ignoring the huge health problems we have with obesity and is picking on low-income people again - people who are not allowed to have any freedom to enjoy something that is legal without being hit hard in the pocket and made to feel guilty.


"This has nothing to do with supporting smoking; it's about fairness and speaking up for people's personal freedom."

He said obesity was a more pressing health issue that needed to be addressed first.

"If the Government was really concerned about the most worrying aspects of public health they would have policies to deal with the tsunami of obesity.

"This shows the gross hypocrisy of the Government. They want to have the country smoke-free by 2025; why not fat-free by 2025?

"The Government is charging multinationals less than half one per cent taxation while thumping smokers with a tax which will bring in $425 million over four years.

"What's fair about that?"

Taxpayers Union executive director Jordan Williams backed Mr Peters calls that raising tobacco taxes was an unfair measure.

"Winston Peters is right. These price increases will see kids go hungry.

"The only thing more addictive than smoking cigarettes is this Government's addiction to the excise tax revenue."

He said the legalisation of e-cigarettes would help lower smoking rates.

"E-cigarettes are the number one tool used by smokers to kick the habit in Britain, but the Government has kept the sale of them illegal here."

Meanwhile British American Tobacco spokeswoman Janice Thien said the increased tax places an "unreasonable burden" on smokers, and warns it could create black market selling.

"There are numerous examples around the world where excessive excise increases have fuelled a black market in tobacco.

"This risk is heightened in New Zealand given the inexplicable exemption for domestically grown tobacco from excise or tobacco control regulations, which is fuelling a growing black market."