Turia Tariana: Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Turia Tariana: Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill — First Reading 
[Sitting date: 24 May 2012. Volume:680;Page:2555. 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 be now read a first time. 
 At the appropriate time the bill will be referred to the Finance and Expenditure Committee. I want to first of all mihi to all of those visionaries who began the journey of smoke-free legislation over two decades ago. The Smoke-free Environments Amendment Act in 1990 was one of the major turning points in New Zealand’s tobacco control history. In the space of more 20 years these people—too many to name—have reshaped our attitude to tobacco and this bill is but another step on that journey. I want to also acknowledge the dedicated enthusiasm of officials who continue to impress me with their tireless efforts to support the Government’s agenda to be smoke-free by 2025. Tena koutou. 
This bill is about saving lives and protecting our future generations. In the Budget debate there is always an avalanche of numbers that falls upon the public but in my mind there is only one number and that is the 5000 New Zealanders who die each year due to smoking and exposure to second-hand smoke. It is profoundly disturbing that over half of all long-term smokers die of a smoking-related illness losing an average of 15 years of life. It is not right and we can and we must do something about it. 
This bill reflects the view that smoking is not part of our future. Increasing tobacco excise taxes by 10 percent per year in each of the next 4 years is a key part of our strategy to prevent young people from taking up smoking and encourage existing smokers to quit. We know from New Zealand and international experience that increasing the price of tobacco is the single best thing that we can do to reduce tobacco consumption and consequently prevent tobacco-related harm. After the four annual increases in tobacco excise promulgated in this bill it is expected that a typical packet of 20 cigarettes will cost over $20 or $1 per cigarette. This is likely to be a huge psychological price point. I have read all the headlines that tell me that this is a hard-hitting move and it will hurt but I ask the question: what sort of future are we shaping if we do not try to do everything possible to extend life expectancy improve health outcomes and strengthen our families? I would have to ask as to which is the greater hurt when we consider the impact of this addiction on far too many family members—loved ones who have gone far too soon. 
At the moment one in every five people over the age of 15 continues to put their health and their lives at significant risk by smoking. For Maori the data is even more distressing. Some 155000 current smokers are Maori. That is 45 percent of the Maori population aged between 15 and 64. I care deeply that almost half our population is living with compromised health and the expectation of a reduced lifespan. I know that together this Parliament can act to change that situation and I look forward to broad support across the House. 
We know that people are more responsive to price than they are to any other marketing intervention. A tax increase will stimulate smokers to make a quit attempt and successfully become smoke-free. One of the things I am most pleased about as a result of the last term’s changes is that we have seen a large reduction in the number of young people who are taking up smoking. The annual Action on Smoking and Health year 10 student survey included 26000—or nearly 50 percent—of all students in this year and showed the lowest rate ever recorded of year 10 students who were daily smokers and the biggest year-on-year drop in daily smoking was from 16.3 percent in 2010 to 11.3 percent last year for Maori girls who have the highest smoking rates. That is a great result and a result that I believe this entire House can be proud of in having voted for the previous tobacco excise increases. 
The Government’s goal of a smoke-free Aotearoa New Zealand by 2025 has in no uncertain terms signalled that it is serious about eliminating the harms that are caused by smoking. The tobacco industry and wholesalers and retailers of tobacco need to understand this message: selling tobacco is a sunset industry in New Zealand. It is not our future.  
I was intrigued to read the  
National Business Review  
yesterday with the headline “Budget 2012: higher tobacco tax may encourage black market”. On reading more closely it was revealed that the robust research basis for the article was none other than the viewpoints of the Imperial Tobacco Group. That is the company that produces brands like Drum Horizon and Peter Stuyvesant; it is hardly an objective observer. It is a pity that the  
National Business Review  
had not opted for a more balanced opinion by including the advice of people such as Professor Janet Hoek from Otago University. In the Science Media Centre Professor Hoek responded to these allegations with the following statement: “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 …”. On the contrary there is a wealth of research available that gives even more reason for introducing this latest legislation to reduce the long-term burden on the health system and make people’s lives better.  
Just 2 days ago research by ASPIRE2025 funded by the Health Research Council and published in the international peer review journal  
Tobacco Control 
 revealed that smokers strongly support tighter regulation of the tobacco industry and almost half support an outright ban within a decade. I think that is amazing. These further four 10 percent increases are important and meaningful steps that are a necessary part of the Government’s commitments to achieve the 2025 smoke-free goal. 
 This bill is but one of a multi-pronged strategy. From 23 July this year a complete ban on the display of tobacco products will apply in everyday retail settings—out of sight hopefully out of mind. Cabinet has agreed in principle to introduce a plain-packaging regime following public consultation later in the year. We have increased the fines for selling tobacco to minors from $2000 to $5000 and I have many other initiatives in progress including that of stopping smoking in cars. I have stated that my approach is to do whatever it takes to support people to quit. The motivation is clear. I want all New Zealanders to enjoy the highest quality of health and of course to benefit from more money back in their pockets rather than feeding an addiction that sees their income literally go up in smoke. I am also clear that smokers should not have to do the hard yards on their own. It is about promoting and sustaining supportive environments that encourage us all to be smoke-free. 
I am really proud that we have been able to establish a fund of $20 million under the umbrella of Pathway to Smoke-Free 2025. This fund gives us an opportunity to initiate programmes that support positive and healthy lifestyles free from tobacco harm. We are calling this an innovation fund because we are seeking wider solutions to support our goals of becoming a smoke-free Aotearoa. 
There is one particular feature of this legislation that I want to describe in a little more depth. When the increases in excise on tobacco products occurred in 2010 time-limited legislative amendments were made to exclude tobacco price increases from the annual CPI-based adjustments to the main benefits. This bill proposes to continue to extend the time-limited provisions to ensure that until the end of 2017 the following bills will exclude tobacco product price increases from required CPI indexation: the Children Young Persons and Their Families Act 1989 the Education Act 1989 the Income Tax Act the New Zealand Superannuation and Retirement Income Act the Social Security Act 1964 and the War Pensions Act 1954. The purpose of this is to ensure that recipients of social assistance are not reimbursed for increases in tobacco excise. 
This bill takes us another step forward towards being a smoke-free nation by 2025. It is continuing the momentum created by the previous three tobacco excise tax increases. Raising tobacco excise is our most effective lever to influence the price of tobacco products and I commend this bill to the House.