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March 18, 2013 | by  | in Opinion |
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Letters from a Young Contrarian

Dear Comrades,

Having been restricted to sneaking a puff here and a drag there during my two month stint visiting family in Perth over the New Year break, when I arrived back in Wellington i decided to buy a pack of my beloved Marlboro reds and indulge in some uninhibited inhalation.

When it came to paying, I was shocked to find that the excise tax on each packet of cigarettes had increased for the third time in as many years. I was further dismayed to learn that Associate Health Minister Tariana Turia’s levy increases were set to continue until at least 2016, when a pack of 20 smokes will cost over $20. At that price level, government revenue from smokers will have increased from today’s astronomical $1.3 billion to a truly diabolical $1.7 billion. that’s billion, with a ‘b’. $1,700 million dollars is enough to give every New Zealander $400 each. In short, it’s a shit-ton of money.

So how does Tariana ‘the Taxman’ Turia justify such a figure? By claiming that smoking costs the New Zealand health system $1.9 billion a year and therefore smokers should be forced to recompense their fellow taxpayer for that loss. I agree that governments should tax activities at a level equal to that of the cost to others (economists call this ‘externality pricing’), but that number is too damn high to be believable.

The figure is based on a report by the Ministry of Health, which failed to take into account the fact that smokers die earlier, thus saving the government millions in superannuation and old-aged care. The true public cost imposed by ciggies is more likely the $350 million estimated by Dr Des O’Dea in a 2007 Otago University study, commissioned not by Big Tobacco but by New Zealand’s largest anti-smoking lobby group, action on Smoking and Health (ASH). It is not true that smokers are a drain on the system; in fact it is the other way about.

You may say, well, so what? Who gives a fuck if smokers pay a billion dollars extra; that’s a good thing as the extra money can subsidise programmes like interest-free loans, tax the heathens to the hilt. But to say that is to ignore the simple truth that tobacco taxes transfer wealth from the poor to the middle and upper classes. Which group of people smoke but doesn’t go to uni? Poor people. Which group doesn’t smoke but does go to uni? Well-off people.

Add to this the fact that the addictive nature of cigarette smoking means that more than likely poor people will have to buy less food and clothes for their kids in order to make up for the increased cost of smoking, and it becomes clear that higher taxes are a beat-up on the most vulnerable people in society. Won’t somebody please think of the children?

Besides, I find it ultimately bizarre to impose a socialised healthcare system out of which one cannot opt, and then use the costs of that system as justification for regulating behaviour. If you don’t like the fact that the public health system spends so much money on smokers, why not force them to get private health insurance instead?

The misery tobacco has wrought on the human race is immeasurable, and there are good arguments to be made for increasing the sin tax on fags or even banning them outright. But recovering costs is not one of them. The audacity of politicians and non-smokers alike to claim that we impose a financial burden on them, when the truth is that without our money their taxes would need to increase to make up the shortfall, is loathsome and it needs to stop. They owe us that much at least.

Best,
Cam

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