Tobacco, alcohol and gambling tax costing Māori over $1b a year

Researchers say the disproportionate amount of tax collected from Māori tobacco consumption should be in the hands of iwi to support programmes Vape2Save. Photo / File

Tax taken from tobacco, alcohol and gambling consumption cost Māori over $1b in 2018, a report has found.

While consumption of alcohol and gambling was in line with the general population, Māori paid a disproportionate amount in tobacco tax, which researchers want to see in the hands of iwi.

The New Zealand Institute of Economic Research report, commissioned by Dr Marewa Glover of the Centre of Research Excellence: Indigenous Sovereignty and Smoking, looked at the amount paid in excise taxes, levies and GST for Māori, Pacific peoples, Asian and European/others in 2018.

It found Māori paid $723 million in tobacco taxes, $264 million in alcohol taxes and $161 million in gambling taxes.

While total Māori expenditure on alcohol ($731m) and gambling ($376m) was proportionate to their number in the population, the Māori spend on tobacco at $1b was "disproportionately high", accounting for 25 per cent of nationwide tobacco expenditure.

The Māori adult (15 years and over) population of 517,000 was less than one
fifth of the European/other population of 2.8m, but Māori tobacco consumption
made up just under half (45 per cent) of European/other tobacco expenditure.

"Smoking rates for European New Zealanders and Māori have slowly reduced over the last four decades in tandem, which people think is equal and fair, but this is not what equity is about.

"No Government over that time has done anything effective to reduce the disparity between Māori and non-Māori smoking."

European New Zealander smoking rates were at 13.2 per cent, whereas for Māori it was 33.5 per cent."

Glover said the findings were a "kick in the guts" for those working to improve Māori wellbeing.

"If you're working to improve Māori economic and social wellbeing, these figures are a kick in the guts.

"The amount of revenue that Government is siphoning off Māori each year just in taxes on tobacco, alcohol and gambling is way more than the 8.5 per cent return post-settlement tribal entities are earning on their $9 billion asset base."

Glover referred to recent reports showing the Māori asset base had grown to more than $40 billion.

"Imagine how much faster the Māori economy could grow, and how many Māori families could be lifted out of poverty, if spending on these behaviours could be positively redirected."

Glover said the $1.1b in taxes could pay for almost 1700 KiwiBuild homes.

"In the hands of iwi, $1.1b could be used to build many more homes than that."

The disproportionately higher rates of smoking among Māori meant Māori were disproportionately hurt by punitive taxes and fines aimed at curbing smoking, Glover said.

"It is not necessary for the Government to keep increasing the tax, for example on tobacco – it's a choice they make.

"The choice they're making is to stunt Māori advancement by keeping the poorest groups who have the highest rates of smoking locked in poverty."

Glover said the excess tobacco tax - the extra amount Māori disproportionately pay - should be distributed to iwi to reduce smoking prevalence.

Glover said this could allow iwi to develop "mana-enhancing solutions" like the Māori-designed Vape2Save programme, which focused on increasing financial literacy and teaching people how to get out of debt.

"The stress of being in debt, of not being able to afford enough or good food, the rent, the electricity bill etc, is a key driver of relapse to smoking.

"This is why the cumulative programme of taxes on tobacco, alcohol, gambling to name just a few taxes disproportionately paid by the poor, are so crushing."