Tobacco tax

May 31st, 2013 at 1:00 pm by David Farrar

The Herald reports:

The increase in tobacco tax in January may have pushed the rate below 16 per cent, a survey suggests.

Released today to coincide with World Smokefree Day, the survey of more than 200 smokers found a 4.5 per cent reduction in smoking prevalence following the 11 per cent tax increase, said Dr Murray Laugesen.

“That equates to a 0.75 percentage point reduction in the [national adult] smoking prevalence which is currently 16.5 per cent. The tax rise could have brought it below 16 per cent.”

This doesn’t surprise me. Price will of course affect demand.

But a sample of 200 is very small. The margin of error is around 7%, so a 4.5% reduction is not statistically significant.

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11 Responses to “Tobacco tax”

  1. Manolo (13,394 comments) says:

    Nothing but a gutless sop from the piss-weak Labour Lite to appease the racist Maori Party.
    What a crock from the party of “lower taxes“.

    Disclaimer: I do not smoke.

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  2. Fisiani (954 comments) says:

    http://www.huia.co.nz/quit

    So far 35 people have signed up to become smoke-free forever

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  3. Redbaiter (7,642 comments) says:

    This is a gross misuse of government power.

    Either make smoking illegal or tax cigarettes the same as every other lawful product.

    Government should not be using the tax office to shape citizen’s habits.

    With smoking or any other lawful activity.

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  4. scrubone (3,048 comments) says:

    I seem to recall that the tax increase before that decreased smoking rates so much that it actually reduced revenue – which is why rates were static for so long.

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  5. Ed Snack (1,739 comments) says:

    I wonder if there’s any evidence for increased smuggling of cigarettes yet. It is predicted to happen as the price goes up, but does it actually occur to any significant degree ?

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  6. Longknives (4,467 comments) says:

    Tobacco= Evil, must be banned.
    Cannabis= Wonderful ‘Sacred Herb’ that we should encourage our children to smoke and deal (“Entrepreneurs”?)

    Go figure.

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  7. Nigel Kearney (864 comments) says:

    The more you tax something, the less people do it. If National is going to take credit for this, they also have to take the blame for reduced production of goods and services due to the punitive rates of taxation on those who produce them.

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  8. leftyliberal (642 comments) says:

    200 is not a very small sample size, and if we assume a prevalence of 16%, that equates to a margin of error of 5.1%. A 4.5% change would thus have a P-value of around 6% (P-value being the likelihood that the change in the sample arose by chance due to sample to sample variation if there was no change in the population). While this isn’t under the magic 5% it’s still not very likely, considering if our hypothesis before data collection was a reduction in the prevalence, the P-value would have halved.

    Anyone have a link to the actual survey rather than the useless Herald writeup?

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  9. emmess (1,373 comments) says:

    I don’t care about smoking tax going up as this is something the government wants to discourage but why did they put the petrol tax up in the budget?

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  10. bhudson (4,734 comments) says:

    @emmess,

    Most of the national funding for roading comes though petrol tax. If we want to improve roading – being from the standpoint of optimising economic potential through movement of goods and people, or road safety, or simply accommodating population growth and retaining choices for people – then our options are to tax, toll, or go back to goat tracks.

    Of course most of the funding for Public Transport comes through tax also – national or through rates – but the Greens think that is just fine and dandy. Lets hear them agree to reduce taxation funding for PT in step with petrol tax if they want to oppose this particular move.

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  11. wat dabney (3,672 comments) says:

    Price will of course affect demand.

    Except when it’s a statutory minimum wage, of course.

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