Tabuteau Fletcher: Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeTabuteau Fletcher: 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:11426. Text is incorporated into the Bound Volume.]FLETCHER TABUTEAU (NZ First):I do not think that anyone in this House will dispute the evils of smoking and the effect that it has on the lives of people—[Interruption]—and on families around—[Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!FLETCHER TABUTEAU: It is an insidious problem that affects all of New Zealand society and in fact societies around the world. As I said it is hard on our families and I have personally been affected by it. That is what makes the contributions from the rest of the House seem so callous and empty and disingenuous. A tax—especially this tax at this rate—will debatably prevent people from taking up smoking at a tiny tiny tiny rate. [Interruption] The decrease in smoking will be tiny—absolutely tiny—[Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I ask the member to resume his seat. Can I ask the two members to respect the ruling that was made yesterday. It is OK to interject back and forth on the person who is speaking but to have a third- and fourth-party conversation across the House is something that is not appropriate. I think there was actually a pretty severe warning made by one of my colleagues about this yesterday. I just want to say to Mr Seymour that he is testing me.FLETCHER TABUTEAU: I actually just want to comment that I think it was the New Zealand Herald or the Newshub group that went out to New Zealanders last night and this morning and asked: “What do you think of this new tax?”. And actually more than two-thirds of New Zealanders said that it was a cynical tax grab by this Government that will have no effect on the rates of smoking by New Zealanders. I would like to spend the next few minutes of this contribution outlining why I completely agree with the majority of New Zealanders in this case.I want to empathise with the member from the Māori Party and I acknowledge the contribution from the Minister. In fact the Māori Party member could not speak much to this bill because I think in her heart of hearts she knew that it would not achieve what she hoped it would. So she actually spent the majority of her contribution saying what else we could do and what else we should be doing. And so I have huge empathy with her because I agree.But this excise tax on smokers will not work. The Minister talked about the 12 people lost to us each day and I agree that that is terribly wrong. But “What is this Government doing about it?” is the actual question. It is not spending a dollar more on cessation programmes. There is not a dollar more specifically assigned in this Budget to help people to stop. No the solution from this Government is a tax and not only that it has been acknowledged by everybody who has spoken before a tax that will affect mainly the poorest New Zealanders in our society.The only Budget strategy that this Government has is to tax the poor. It makes the Minister’s words and supposed passion and concern empty and farcical in my opinion. He puts the decrease in smoking rates down to price increases over the last few years. I call that stance misleading. I suggest that many would say it was naive. There were huge mass media campaigns cessation programmes and fully funded Quitline programmes for example. Not only are the Minister’s price increases not the most effective tool but also I put it to this House that actually the efficacy of these excise taxes have passed their use-by date and will achieve nothing. So I put it to the Government: you have increased taxes and that is all you will achieve—an increase in taxes. Those who are addicted to smoking will continue to smoke and will continue to feed their addiction at the cost of the essentials of life.Let us face reality: it is still a legal product. The Government is not willing to go that far and yet it is being more nanny State than Labour could ever dream of being. Food kills people. Sugar kills people. Obesity is the biggest killer in modern society. Let us take the logic that this Government is using in the House today and apply it to those items. That is not unreasonable. It makes perfect logical sense given the negative externalities of consumption of any and all of those goods to say: “Let’s disincentivise it let’s internalise the cost of it and put a tax on its consumption.” [Interruption] Sorry “Let’s tax it and it will stop people consuming it.” For example obesity—let us put a tax on it. Given basic theory obesity rates will decrease and we will have less obesity and fewer costs in our hospitals. That is the logic that this Government is using.We know that this measure will affect 15 percent of the New Zealand population but unfortunately the rate increase will affect 35 percent of the Māori population and 22 percent of the Pacific population and approximately 550000 New Zealanders in total. So although I think the Māori Party’s intentions are good I think this excise tax is misguided and will achieve the exact opposite that it hopes for because disproportionately poor people will pay.Here are some statistics: because of the difference in smoking prevalence people from the bottom third in household incomes spend nearly 20 times more on cigarettes as a proportion of their income than those from the top third. As many commentators noted yesterday this was one of the more contentious parts of the Budget contribution. They came out and blatantly said that this will take food from the tables of children because those who are addicted will not stop because of a tax hike; they will simply compromise what little money they have and what they can do for their families. We say that this legislation will make it harder for the poorest for Māori for Pasifika and for New Zealand children and that is unacceptable.Let us just rephrase what the Government has been saying. It is saying that a cigarette tax will get people to stop smoking and will increase public revenue. Minister Lotu-Iiga said that a tobacco tax is the most powerful tool to bring down the rates of smoking. I would actually I suggest agree with him mainly but not now. In the past we saw the statistics and we saw that yes price did have the impact that we hoped it would have. But what we are seeing now from economists around the world is that recent price hikes are not actually having the impact that we assume they will have on the consumption of cigarettes. They suggest that the majority of people who would give up smoking because of price have actually already done so. But still the Government persists in using ill-considered increases in the level of taxes generating even more revenue from the poor.So let us also put this into perspective because it will be revenue from the poor: of those who earn over $100000 it is suggested that only one in 10 are smokers and of those who earn under $35000 though the number rises incredibly to one in three. Continuing to raise taxes on poor smokers who are unwilling or unable to quit will be ineffective and unjust. This nanny State must be reminded that tobacco is still a legal product. This tax will have no effect. The desired effect that the Government is seeking to implement will not come about because of this tax rate. Thank you.