The Herald gets it

The Herald editorial:

It is not often crime can be truly said to be of the Government’s own making, but that can be said of robberies of shops stocking cigarettes.

Rising tax on to discourage smoking has reached a level at which cigarettes have become, according to the Association of Convenience Stores, “like stocking gold”.

Hardly a week passes in which a dairy is not attacked for little more than cash and cigarettes.

The heists are happening in daylight and frequently shop owners are being battered in the attempt to save their stock. Its wholesale cost is high with the excise included and the retail margin is low.

The robberies are suspected to be feeding a black market that is on-selling the cigarettes to less scrupulous shop owners at less than the wholesale, tax-inclusive price.

This is what is liable to happen when markets are seriously distorted no matter how worthy the purpose of the regulation or taxation.

The excise tax increases have indeed been for a worthy purpose. But the law of unintended consequences is happening big time, and has fueled a crime wave.

To say so is not to condone the criminal response but those who promote regulations and taxation as solutions to a social problem should always keep in mind the risk that they could create new problems, possibly worse than the problem they are trying to cure.

Smoking is a danger to health but so is armed robbery.

Yep and people choose to smoke. No one chooses to be robbed.

No doubt annual tax increases have played a part in reducing the number of smokers though the habit remains rife in Maori and Pacific communities.

The Maori Party has pressed hardest for the tax hikes by the present Government and it is unlikely to let up.

The tax is set to rise by 10 per cent a year for next three years, bringing the price of a pack to $30 by 2020.

It is time to ask whether this is really wise? If smoking has declined to the point that a hard core of smokers has continued despite the rising price, what reason is there to suppose further rises will deter them.

Each increase might merely divert more of their limited income from their family’s needs. We may have reached the point at which taxation is doing more harm than good.

Tax increases have been an effective tool in the past. But yes the smaller the pool of remaining smokers, and the less impact the tax increases have – and the greater the unintended consequences.

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