Guest Post: Was the tobacco tax change done with industry knowledge?
Guest post by Jordan Williams
Last year, my former boss (i.e. Taxpayers’ Union Chair), and friend, Casey Costello took a lot of criticism and unfair suggestions that she is in the pocket of the tobacco industry or otherwise has acted dishonourably with her decision to treat smokefree (heated) tobacco differently from traditional cigarettes from a tax perspective.
The criticism of Casey has troubled me, as I know her well. I have always found her integrity to be second-to-none, and unlike many modern-day politicians, she’s not in Parliament for egotistical reasons, rather her North Star (she believes firmly in equality of citizenship, and that a divided country is no path for prosperity for most Maori). In shepherding through Cabinet the reduction in excise tax for heat-not-burn tobacco, I would be absolutely astonished if Casey’s motivation was anything other than what she says (to paraphrase): heated tobacco products are a far safer alternative to smoking, and by reducing the excise tax on them, it serves to incentivise the shift off the traditional durries that, unfortunately, some people are choosing / addicted to.
I supported the move. Clearly vaping has been the most successful smoking cessation tool in my lifetime (and if we were to tax it, there is a material risk smokers would switch back). So it is reasonable to assume novel products such as heat-not-burn (and snuse – which has been very effective in Sweden to get locals to quit) may have their place in getting those hard-core addicts still smoking to give up.
Last year it occurred to me to ask NZ Customs about the timing of imports of the products the tax cuts applied to. I wanted to know whether, perhaps, industry ran down their stocks or behaved in a way that might suggest they knew the tax change was coming. This would support Labour/RNZ’s theory that there was the sort of industry manipulation of NZ First or Casey that they have used as an attack line.
The response to my OIA from Customs is below. What is interesting is that even after Cabinet took the decision (20 May) but before the decision was announced (18 July), the affected products continued to be imported. In fact, June 2024 was the second highest month in 2024 for importation of the products (therefore attracting twice the tax than if the importers have delayed shipments by a few weeks!).
If the tobacco company lobbyists really were ‘in the know’ or donkey deep involved – they must not have mentioned it to their bosses who lost hundreds of thousands due to the timing of their imports.
Given that Labour have access to Parliamentary Questions (and RNZ have the same access as I do to the OIA) why did they not ask this most blindingly obvious question? Then again, ‘exposing’ that a Minister is an independently minded person taking on the blob to get on with the job doesn’t really fit their preferred narrative…
In interests of disclosure (although it is very well known) the Taxpayers’ Union have had tobacco/nicotine companies as members. Our opponents like to suggest that it’s the majority of our funding (in fact, the sum of membership dues and donations from all industry supporters – alcohol, sugar, nicotine, and construction companies amount to no more than 3% of our annual income in each of the last five years). Details of who funds the Taxpayers’ Union is disclosed on our website. This blog post was not sent to/shared with the Minister, her office, or any industry player(s) prior to publication.