Lees-Galloway Iain: Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Lees-Galloway Iain: Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill — In Committee 
[Sitting date: 26 September 2012. Volume:684;Page:5718. Text is incorporated into the Bound Volume.] 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 Part 2 of the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill relates to excluding price increases from required CPI indexation of or related to social assistance. I was not on the select committee that considered this bill being a member of the Health Committee not the Finance and Expenditure Committee and I have to say it is a pity that the chair of the Health Committee used his call to take a closure motion rather than to offer a substantive contribution to the debate on Part 1. Maybe he will offer more substance on Part 2. 
What I understand the point of Part 2 to be is to ensure that the excise tax increases result in a significant real-term increase in the cost of tobacco for the people who receive income in any of the ways captured by Part 2 of this bill. The income that we are talking about here concerns people who receive income that is related to the Children Young Persons and Their Families Act or to the Education Act 1989 with that being student allowances; people who receive money through Working for Families; people who receive money through New Zealand superannuation and retirement income; people who receive social security money; and people who receive money through the War Pensions Act. 
So what this aims to do is to ensure that the increase in the cost of tobacco is not factored into any increases in those benefits or allowances and thus will not offset the increase of the tobacco so that in real terms the price of tobacco goes up. That is a perfectly fine concept except for the fact as Treasury points out that one of the unfortunate aspects of a tobacco tax increase is that it is regressive. It affects the people on the lowest incomes the most and indeed it will certainly affect the people who receive their income through any of these measures. 
However it will also affect people who receive their income through wages but who are also on low income. However people who receive their income through wages will be able to argue that the increase in tobacco excise results in an increase in the Consumers Price Index and they will be able to bargain for a wage rise as a result. It will certainly be factored into wage bargaining around the country. So what you get in effect— 
Dr David Clark 
: Two tiers. 
IAIN LEES-GALLOWAY 
: —is a two-tiered system. Exactly—thank you Dr Clark; you knew what I was going to say. It is a two-tier system whereby people who receive an allowance or a benefit or a pension that is funded through taxes are going to have their ability to offset this increase in the cost of living reduced or in fact negated whereas those people who earn wages are not. 
I guess it is similar it is analogous in a way to the way the Government is behaving around other people who receive a benefit. So for instance the Government has said that women who receive a benefit will be able to get free contraception. In fact in an interesting act of eugenics their daughters will also be able to get free contraception. But it is not all women on a low income or indeed all women. It is singling out people who receive a benefit. Likewise parents who receive a benefit will now be required to send their children to early childhood education. It is not everybody. It is not making early childhood education compulsory for everybody but it is singling out for special treatment people who receive a benefit and this is another instance of the Government doing that. It is singling out people who receive a benefit stigmatising the fact that they receive a benefit by treating them differently from everybody else. It is unfortunate that this bill continues that theme that we have seen from this Government. 
One thing that I find particularly interesting is the fact that this bill will pick on our veterans who receive a pension by way of the War Pensions Act. Interestingly the Minister of Veterans’ Affairs is in the chair at the moment and he might have some thoughts on this. This amendment to the War Pensions Act precedes much more significant amendments to the War Pensions Act that veterans have been calling for for some years now. In fact the Government has had a report in its hands for more than 2 years indicating how it could carry out the amendments to the War Pensions Act that are required in order to make it more equitable and fair on those veterans who served before 1974 when ACC was introduced. Those are the types of amendments that veterans want to see made to the War Pensions Act not this amendment which will curtail any increase that they might get to their pension to offset the increase in tobacco taxation—the increase in cost for their cigarettes. 
I understand what this part is about what it is trying to achieve. It is trying to ensure that these tax increases result in a real price increase. I appreciate that but once again rather than ensuring that is the case for everybody this Government is ensuring that it particularly picks on the people who receive a benefit—not just the people who receive an unemployment benefit or a sickness benefit or an invalids benefit but even the people who receive New Zealand superannuation and even the veterans who have served our nation overseas put themselves in harm’s way and received injuries or illnesses as a result of serving our nation over many decades and in many conflicts around the world. This Government is going to pick on them by telling them it is going to make sure that their pension cannot be increased as a result of the Consumers Price Index indexing that would be linked to this bill. It comes as no surprise—no surprise—that once again this Government picks on anybody who receives their income in that way. It is stigmatising them and singling them out in the way that this Government knows how. 
Although we understand the point behind this part we have to point out the inadequacy of the way the Government has done it and the fact that once again people who receive a benefit or Government assistance are being singled out by this National-led Government.