The $300 million tobacco tax cut lie

Labour keep claiming that the Government gave the tobacco industry a $300 million tax cut. This was based on reducing the excise on heated tobacco by 50% to see if the price difference would move people form smoking tobacco to heating it. The difference is huge in health terms – it is the combusting of tar in cigarettes that kills you. Heated tobacco is like vaping – not healthy, but better than smoking.

So the $300 million lost revenue would only have occurred if there had been a huge drop in the number of people smoking – which would be a good thing.

Now I’ve seen an OIA which asks how much tax was paid on heated tobacco products, and the answer is $2.3 million in 2024/25. This means the 50% reduction in excise on those products was also $2.3 million.

That is 0.77% of $300 million. So if Labour keep repeating the $300 million lie, you should be aware the actual data is less than 1% of that.