- Hon Casey Costello
The Government's move to reduce the excise on Heated Tobacco Products (HTPs) is about getting more people to quit smoking, Associate Health Minister Casey Costello said today.
"The Labour Party and some people in RNZ are fixated on tobacco companies," Ms Costello says. "What Ayesha Verrall has said about the cost and benefit of this policy is completely untrue.
"We want people to stop smoking, and the contingent liability forecast by Treasury will only happen if a lot of people quit smoking and the Government's revenue from tobacco excise reduces significantly because of this.
"Obviously if that happens it's a good thing for smoking rates and peoples' health.
Last year, a change was made to halve the excise duty on heated tobacco products (HTPs) to see if that might encourage cigarette smokers to switch to a less harmful product. There was to be an evaluation of the change after a year, but because of vaping regulation changes, HTP devices were withdrawn from the market for some of the year. HTPs are now back on the market and the review has been extended to July 2027 as there will be more data available.
Last year's cabinet paper included preliminary modelling from the Ministry of Health showing 7,200 people quitting smoking in the first two years from the excise change.
It also included estimates of the potential costs from reduced revenue from tobacco excise from people no longer smoking, and from the excise reduction on HTPs. These were included in the Budget documents as contingent liabilities to recognise the potential impact on the Government's accounts.
"What Labour and RNZ are saying is incredibly misleading," Ms Costello says. "To be absolutely clear, this is no 'tax break' for the industry.
"I said at the time and continue to say that our drive is to stop smoking. We are trying to see if HTPs can play a similar role to vaping and provide an alternative product and way to quit for smokers.
"We've made great progress in reducing smoking rates and with particular groups like young people and most smokers are now long-term and older and we need to try different ways to help them.
"While a full evaluation of this policy is two years away, I have asked the Ministry of Health to ensure that the excise reduction in HTPs continues to be passed on to consumers."
The Ministry of Health has also established an expert advisory group to look at improving the regulatory regime around all nicotine and tobacco products. The group includes representatives from Health Coalition Aotearoa, ASH, Vape Free Kids, Cancer Society, Heart Foundation, Hāpai te Hauora, the Asthma and Respiratory Foundation, Auckland and Otago Universities and other experts and is due to report to the Minister before the end of the year.
