|
Included in today's Budget 2012 announcements was a plan to increase tax on tobacco and allocate new funding to prevent the uptake of smoking to help current smokers quit.
Tobacco excise taxes will increase by 10 per cent a year on January 1st in each of the next four years as part of a wider government programme to prevent young people from taking up smoking and encourage existing smokers to quit.
This will be in addition to the annual inflation-indexed increases in tobacco excise, and follows a 40 per cent increase in excise since April 2010.
Budget 2012 also provides $20 million over the next four years for a new innovation fund, Pathway to Smoke-Free 2025, for programmes to discourage smoking uptake and help more New Zealanders give up.
More information and comment from Associate Health Minister Tariana Turia can be found in this Media Release.
A more detailed analysis of the tax increases can be found in the treasury's Regulatory Impact Statement on tobacco excise tax in the 2012 Budget.
The Science Media Centre contacted experts for further comment.
Feel free to use these quotes in your reporting. If you would like to contact a New Zealand expert, please contact the SMC (04 499 5476; smc@sciencemediacentre.co.nz).
These comments are abridged, full commentary is available on the SMC website.
Prof Janet Hoek, Department of Marketing, University of Otago, responded to our questions:
Is there a strong evidence base that increasing the cost of tobacco leads to decreased consumption?
"Yes, we know that increasing tax stimulates quit attempts. Internationally, excise tax increases are recognised as a very powerful smoking cessation tool.
"Consumers are more responsive to price than they are to any other marketing intervention. We know that most smokers (over 80% according to work Associate Nick Wilson from UoO has undertaken) regret the fact they started smoking and would like to be smokefree. A tax increase will stimulate many of these people to make a quit attempt and successfully become smokefree."
"We also know that there is strong public support for more progressive tobacco control measures - even smokers support excise tax increases if the additional tax revenue is used to support cessation programmes and treatments (see work by Nick Wilson here).
Is there is a possibility that increasing prices will lead to homegrown tobacco becoming more widely used and a black market emerging?
"I know tobacco companies have suggested black markets will emerge in response to other policies (such as plain packaging) but I have never seen any evidence to support these claims and closer analyses of the industry's claims have raised serious questions about their validity (see the ASH website for more information). I understand from colleagues that home grown tobacco is not particularly palatable (it obviously lacks the many chemical additives tobacco companies add to enhance palatability). However, this is probably a question for a health economist to comment on more fully.
"I would direct those interested to a comment by Simon Chapman (Professor of Public Health at the University of Sydney)and a New Zealand Institute of Economic Research review of an industry commissioned report on illicit tobacco trade."
Would you be able to comment on the ethical situation presented by imposing extra costs on addicted individuals?
"I think it's very important to use the extra revenue generated from tobacco taxes to help smokers quit and I support a hypothecated excise tax. We know most smokers want to quit and make multiple quit attempts to rid themselves of their addiction to nicotine.
"I believe governments should provide stimuli that prompt quitting as well as support to ensure it succeeds. We cannot be bound by the errors of the past and instead should focus on using effective public policy to ensure tobacco is clearly seen as a toxic and lethal product, the tobacco industry tightly regulated and smokers themselves given every assistance to quit.
"I believe the ethical problem would arise if, knowing as we do the harms caused by using tobacco, governments did nothing to curtail its use, restrain the tobacco industry, or support smokers to quit."
Dr George Thomson, Senior Research Fellow, Department of Public Health, University of Otago, Wellington, comments:
"Helpful for health benefit, but the 10% rise steps is an optimal level to increase government tobacco tax revenue (as seen by the predicted $528m extra revenue over 4 years). Optimal for tobacco industry, as 10% increases (7-8% tobacco price rise if the tax is passed directly on) will enable them to blunt the perceived price rise for most smokers (as opposed to a 20-30% tax rise). They can (i) temporarily cut their gross margins, (ii) by staging the retail price rise over several months, the rise perceived by the smoker could be smaller. The industry generally will aim to provide smokers with, or encourage smokers to, find ways to smooth the transition to higher prices, such as providing lower cost brands."
Is there a strong evidence base that increasing the cost of tobacco leads to decreased consumption?
"There is strong scientific evidence that in high-income countries such as New Zealand, tobacco price increases (especially if real incomes are static) will reduce smoking by low-income groups more than for high-income groups. Price increases reduce youth smoking initiation, and reduce smoking prevalence in youth more than for adults.
"Perhaps most important as evidence is the industry response - to ensure that there are low price brands."
Is there is a possibility that increasing prices will lead to homegrown tobacco becoming more widely used and a black market emerging?
"The main NZ problem at the moment appears to be the difficult legal situation in prosecuting Motueka area growers - better law would help. There is very little evidence that I have seen of palatable tobacco being cured outside Motueka in anything more than minute amounts, and I have seen no evidence of home grown sales outside of the Motueka supplies. The growth of any black market from home grown depends largely on the resources given to Customs. The larger risk is of stolen retail and wholesale tobacco - and the solutions there are (i) the insurance companies and (ii) requirements for safe storage and transit (as with other highly portable dangerous addictive drugs)."
Are there overseas examples of excise taxes effectively decreasing smoking rates?
"Recent Australian studies, one retrospective and one a prospective modelling study, found strong effects from price rises.
"The evidence from California, New York, Uruguay, Ukraine, and Canada indicates that inflation-adjusted price rises of over 30% (or 20% and over if there are strong co-interventions as in California and Uruguay) are associated with prevalence declines of between 11 and 27%, over a period of up to four years"
Is cost likely to have an impact on the uptake of smoking among young New Zealanders?
"Price increases reduce youth smoking initiation, and reduce smoking prevalence in youth more than for adults. Reviews have consistently reported that tobacco price increases decrease youth smoking initiation and prevalence. Chaloupka et al found 'sufficient' evidence that not only do price increases reduce youth smoking more than for adults, and reduce youth initiation, but there is a further greater impact on the transition to regular use.
Would you be able to comment on the ethical situation presented by imposing extra costs on addicted individuals?
"Our research has found that at the population level, the estimated harm to life expectancy from tobacco taxation (via financial hardship) is orders of magnitude smaller than the harm from smoking. Policy makers should be reassured that tobacco taxation is likely to be achieving far more benefit than harm in the general population and in socioeconomically deprived populations.
"The dedication of at least some tobacco tax revenue to effective tobacco control programs can reduce the ethical problems of raising revenue through taxes on tobacco. The ethical problems arise both from the addictive and commonly lethal nature of tobacco, and from the regressive nature of tobacco taxation."
Aside from tax increases, what do you believe would be the most effective initiative to decrease smoking rates?
"The major changes necessary are upstream - making the policy process more transparent - donations, lobbying etc. More immediate changes needed include:
- Minimum retail price and capped pre-tobacco tax price for the industry (eg, capped price at $2/20 pack; minimum retail price of $18 and increasing with further taxes)
- No duty free (as in Hong Kong, Singapore)- Australia is reducing their allowance
- Denormalisation of the industry, products and smoking
- 'Truth' type media campaigns
- Bigger and better warnings, and plain packs and products
- Separating alcohol from smoking (eg smokefree alfresco, tobacco-free alcohol sales-places)
- Where and how tobacco is supplied - eg, Reduced retail availability, conditions of licenses; no postal or courier delivery,
- Product controls - what is supplied: Reduced product palatability (eg, removal of all additives, nicotine enhancers, flavours); requiring fire safe products (no accelerants)
- Smokefree outdoor areas by national law - bars, parks, shopping streets, patrolled beaches
| 
