Turia Tariana: Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill; and Bills Therefrom — Third Readings 
Text is incorporated into the Bound Volume 
Turia Tariana: Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill; and Bills Therefrom — Third Readings 
[Sitting date: 16 October 2012. Volume:684;Page:5830. Text is incorporated into the Bound Volume.] 
Hon TARIANA TURIA (Associate Minister of Health) 
: 
 I move  
That the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill the Children Young Persons and Their Families (Indexation—Budget Measures) Amendment Bill the Education (Student Allowances Indexation—Budget Measures) Amendment Bill the Income Tax (Working for Families Indexation—Budget Measures) Amendment Bill the New Zealand Superannuation and Retirement Income (Indexation—Budget Measures) Amendment Bill the Social Security (Indexation—Budget Measures) Amendment Bill and the War Pensions (Indexation—Budget Measures) Amendment Bill be now read a third time 
. I am really pleased to be able to stand and talk about something that the whole of the House generally agrees on. First I would like to thank my ministerial colleagues particularly the Hon Chester Borrows for their assistance in the second reading and Committee stage of this legislation and I want to again mention the professional commitment and passion way beyond the call of duty of the health officials who championed tobacco reform. 
There was a statement made to the Finance and Expenditure Committee by the coalition End Smoking NZ trust which places this bill in a proper context. The trust saw this bill as a means to correct the market failure that has resulted in the death of some 200000 New Zealanders since 1950. According to the trust the high profits gained from the sale of the product which continues to kill 5000 New Zealanders every year suggests that prices should be capped and profits recovered as excise. It was a message that in various forms was replicated through the submissions of the 94 interested groups and individuals who so generously contributed to the debate. In fact the great majority of submissions—75 out of 94 received—recommended higher excise tax increases to reduce smoking even further. Repeatedly the committee was told that increasing tobacco tax is the single most effective measure to reduce tobacco consumption. In essence that is why this legislation is so important and I hope it will receive the right support right across the House. 
I am pleased that the speeches made by members throughout previous stages have been supportive of our goal to address the enormous harm that is caused by smoking which is by far New Zealand’s leading avoidable cause of serious illness and premature death. I accept the healthy scrutiny that all parties take up in relation to discussions around revenue gathering as part of the core parliamentary debate. I want to give my solid assurance to this House and to the public that I have never considered tobacco reform to be important because of the revenue that is gained from higher excise. We should not play politics with such a serious issue. In actual fact if our goal to make New Zealand smoke-free by 2025 is achieved tobacco excise revenues will be significantly reduced over the longer term. There is only one universal goal in my mind and that is to reduce tobacco consumption and in doing so we are literally saving lives. What greater goal can there be? 
Modelling referred to by the New Zealand Medical Association suggests that if smoking was eradicated from our country it would see an overall increase in the life expectancy of Maori and Pasifika by 5 years and 3 years for others. Increasing tobacco excise is a critical lever to raise the retail price of tobacco products. This provides a strong signal and financial incentive to dissuade people from smoking. It is effective it is immediate and we know it works. Increasing tobacco excise definitely impacts on our young people who might be contemplating taking up smoking because we know that they are very responsive to price. 
Secondly lifting the excise provides all smokers with another trigger to quit. Not only can they avoid the high risk of tragic health consequences from smoking but they can save themselves sizable sums of money. I heard the most wonderful story from one of our Whanau Ora collectives which described a w’anau in Taumarunui who came together to chart out a plan for their future. They had an overwhelming desire to own their own home but on their income projections that simply was not going to happen fast. So they looked around and they realised that they were all sitting on a significant source of revenue: their cigarette addiction. They literally took the power into their own hands by improving their health while at the same time increasing their savings and their potential for buying their own home. They quit smoking they joined their savings together and they are well on the way to homeownership. 
Thirdly the rising cost and increasing unaffordability of smoking provides those who have quit or are struggling to stay quit with reinforcement to stay strong. The basic framework of this bill as announced in this year’s Budget is to provide for four 10 percent increases in tobacco excise to come into effect on 1 January in each of the next 4 years. In practical terms it means that an average pack of 20 cigarettes will cost over $20 in 2016. The mechanics spelt out in the legislation provide for these new annual increases in tobacco excise and excise-equivalent duties to be made in combination with the existing processes available to keep pace with inflation. This is an important mechanism to maintain the value of the tobacco increases and the unaffordability of tobacco products in real terms. 
This bill will ensure that the financial incentive against smoking is not watered down through the cost indexation of social assistance payments. Exactly the same thing was done in April 2010 when the last excise increase went through under urgency so I have to admit to some surprise at the arguments that have been raised by Mr Lees-Galloway during the debate. It makes no sense to raise tobacco prices on the one hand in order to reduce tobacco consumption only to then factor the increase in tobacco prices back into the calculations used to keep social assistance payments in pace with inflation. Of course we are sensitive to the impact that tobacco excise increases will have on those who are unable or unwilling to quit but what the proposal in the bill does is strike a balance that does not unduly punish low-income smokers or their families while ensuring that there is a strong incentive for them to quit and thereby significantly boost their disposable income. The Government provides a range of services and subsidised treatments to help smokers quit and I am very mindful that there is always more that we could do. 
I have been very impressed by the bold steps that have been taken by the Queensland Government that make it illegal for people to smoke in cars where there are children. From 1 January 2010 anyone over in Queensland who smokes in a car with children has been liable to a $200 fine the rationale being that the level of tobacco smoke inside a vehicle is very high and that young children involuntarily exposed to tobacco smoke in confined environments have significantly increased health risks including bronchitis pneumonia asthma ear infections and sudden infant death syndrome. Queensland also has extensive smoking bans in outdoor areas including beaches sports facilities and children’s playgrounds. So there are plenty of ideas for us to consider in our quest to be smoke-free by 2025. 
Finally I want to note two recommendations that the committee has made in its report on this bill—namely to monitor closely the progress that will be made over the next few years towards the goal of a smoke-free New Zealand by 2025 and implement further excise tax increases after 2016 if its achievement is in doubt and to undertake work to access the compatibility of New Zealand’s duty-free tobacco concession with the goal of achieving a smoke-free New Zealand by 2025. 
I absolutely believe that we must search far and wide for all the avenues that we can use to reduce tobacco consumption and exposure to tobacco. I am proud that this Parliament is having the courage to increase the price of tobacco as one of the key levers of our comprehensive tobacco control programme. Although the increases in tobacco excise in 2010 2011 and 2012 have reduced consumption and prompted thousands of smokers to quit we cannot and we must not rest there. That is why this bill is needed to bring in a further series of annual 10 percent increases over the next 4 years and that is why I commend this bill to the House.