Reti Shane: Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is subject to correctionReti Shane: Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 26 May 2016. Volume:714;Page:11433. Text is subject to correction.]Dr SHANE RETI (National—Whangarei): It is a pleasure to take the last call on this bill and I want to lead with the statement that tobacco tax increases are the most effective way to reduce tobacco consumption.I think if we briefly look back through history as to how we have come to this excise tax discussion today we can see that the tobacco control programmes initiated by Government first started in 1984. The 1986 Budget was the first to raise taxes and between 1990 and 1998 the tobacco tax was adjusted for inflation. In 2003 New Zealand signed the Framework Convention on Tobacco Control (FCTC) and the World Health Organization (WHO) convention which was ratified in 2004 by New Zealand and came into force in 2005. In April 2010 the Excise and Excise-Equivalent Duties Table (Tobacco Products) Amendment Act enacted a 10 percent increase in tobacco tax annually—2010 2011 2012—very much like what we are doing here.In November 2010 the Māori Affairs Committee reported back to the House on the inquiry into the tobacco industry in Aotearoa and the consequences of tobacco use by Māori. This was a very important piece of work. It was chaired by Tau Henare and current members in the House who were there at that time include Simon Bridges Kelvin Davis Metiria Turei and Iain Lees-Galloway.The select committee heard 96 oral submissions and their recommendations unanimously included firstly a smoke-free New Zealand by 2025 and secondly tax increases: “We commend the Government on the enactment of the excise and excise Act which has increased the tax on all tobacco products by 10 percent. We recommend that the Government legislate for further incremental tax increases over and above the rate of inflation.”In 2011 the Government then adopted the 2025 smoke-free recommendation and in 2012 we got back to saying: “Well what does the increase look like from here?”. I think the regulatory impact statement for the 2012 increase is really telling because it outlines the rationale for a tobacco tax and it is underpinned by three arguments. The first is social policy objectives the second is revenue generation and the third is correcting negative financial externalities—that is the cost of smoking to Government and society should be borne by those who cause the harm especially health care costs. But I just want to reflect for a moment: we are all focusing on health care costs; let us not forget the costs of fire and let us not forget loss of productivity—labour productivity—due to smoking as well.I think it has been commented on that this is a revenue-generating mechanism—yes it is. That is one of the consequences. I turn our attention to the guiding principles of article 6 of the WHO FCTC which clearly says: “Effective tobacco taxes are an important source of revenue.” The framework that we have ratified and that we are a part of clearly says yes—that that is part of an excise tax. The three objectives for raising tobacco taxes which were included in the 2012 regulatory impact statement still hold today: social policy objectives correcting negative financial externalities and revenue generation. With that I commend this bill to the House.