Guest Post: One in eight cigarettes now come from the black market

Louis Holbrooke writes:

New data from KPMG suggests organised crime will the biggest winner from new measures targeting cash-strapped smokers.

The share of tobacco consumption sourced from New Zealand’s black market has increased to 12.1%, up from 9.2% in 2017, according to KMPG’s latest regular inquiry into illicit tobacco consumption in New Zealand.

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While the total size of the black market has shrunk in kilogram terms, this is in line with wider reductions in the smoking rate as savvy smokers switch to vaping.

The worrying sign here is that among those Kiwis who continue to smoke, the black market is normalised as a source of affordable durries.

A taxed and regulated pack of Marlboros now costs $43, and the vast majority of that is tax. With smokers being disproportionately lower-income it’s little surprise that they’re jumping at the opportunity to buy homegrown tobacco leaf or cigarettes smuggled from China and Korea.

Artificially high legal tobacco prices create massive profit margins for illicit importers and growers of tobacco — profits that can be used to fund further criminal activities.

The obvious risk is that with an illicit market already thriving, new measures to make legal cigarettes less appealing and proposed crackdowns on vaping products will only fuel illegal activity. We need only look at Australia, where vapes are effectively prohibited and a study estimates a massive 23.5% of tobacco consumption comes from the illicit market.

Customs are concerned, telling the NZ Herald they’ve seen a “significant increase in the smuggling of tobacco products over recent years. . .The illicit tobacco market in NZ is already substantial and Customs expects demand for illicit tobacco to increase.”

Right now, smokers pay more than enough tax to cover associated health system costs. But if Labour follows through with plans to slash nicotine content and availability of legal cigarettes, or if National pursue a signalled vaping crackdown, the tobacco black market will boom, cratering tax revenues and normalising crime.

Louis Houlbrooke is the Taxpayers’ Union‘s spokesperson for lifestyle economics issues.

General Debate 27 July 2023

400 staff for the Maori Health Authority

That a staggering amount of staff.

I’m sceptical of the effectiveness of the Maori Health Authority, but willing to be persuaded. If they genuinely can improve health outcomes for Maori, that would be great.

But I just can’t imagine what 400 staff are going to do. That nearly three times as many as Pharmac.

The number of two year old Maori children that are not fully vaccinated has increased from 7% (in 2017) to 35%. This is a potential disaster. Is the Maori Health Authority going to turn this around?

National managed to lift the rate for Maori children from 73% to 93% without an MHA.

What will be the metrics on which we will judge if the MHA is doing a good job with 400 staff?

On Education with former Associate Minister Rodney Hide

Race relations getting better, not worse

One News reports:

The question in the latest poll asked: “Do you believe race relations are getting worse or better or staying about the same in New Zealand?”

Only 14% say it’s getting better, 35% believe it’s about the same, and 47% say race relations are getting worse. 

I’m surprised as many as 14% said it is getting better. The Government is pushing through radical policies without a mandate, and gaslights New Zealanders about them.

National, Greens and NZ First all agree on inflation adjusting tax brackets

NewstalkZB reports:

New Zealand First is promising to adjust income tax brackets to inflation, as well as offering tax incentives.

This means National, Greens and NZ First have all come out in favour of indexing tax brackets to inflation. We only need Labour, Maori Party and ACT to agree to have it unamious.

Doing so will be a simple to legislate. Basically all you need is a bill along the lines of:

  • The Chief Statistician will sign a certificate by 31 January every year stating what the inflation rate was for the last calendar year
  • The Commissioner of Inland Revenue will by 28 February every year apply that inflation rate to the existing thresholds and publish a statement saying what the new thresholds for each bracket will be, from 1 April.

If in 2010 you were earning $55,000 a year, then your tax would have been $9,520 or 17.3% effective rate.

If your income had stayed the same in real term, it would be $74,713 today and your tax would be $15,575 or 20.8% effective tax rate. So you have had a 3.5% increase in tax, purely due to inflation.

If the law required the brackets to move with inflation, then your tax bill today would be $12,925 only and you would be $2,650 a year better off.

Benefits get increased in line with inflation, and it is mad that tax brackets do not. You get penalised for earning income, and the higher inflation is, the worse off you are and the better off the Government is.

So pressure Labour, Act and the Maori Party to join National, Greens and NZ First in supporting this.

General Debate 26 July 2023

Labour Ministers from a year ago

A year ago, these were the Labour Ministers and what has happened since

  1. Jacinda Ardern – resigned
  2. Grant Robertson – still there but no longer Deputy PM
  3. Michael Wood – sacked
  4. David Parker – still there but resigned Revenue in a huff
  5. Poto Williams – retired
  6. Kris Faafoi – resigned to become a lobbyist
  7. David Clark – retired
  8. Kiri Allan – sacked
  9. Meka Whaitiri – defected
  10. Phil Twyford – retired
  11. Stuart Nash – sacked
  12. William Sio – retired
  13. Carmel Sepuloni – still there
  14. Peeni Henare – still there
  15. Damien O’Connor – still there
  16. Megan Woods – still there
  17. Willie Jackson – still there
  18. Jan Tinetti – still there
  19. Priyanca Radhakrishnan – still there
  20. Kelvin Davis – still there
  21. Ayesha Verrall – still there
  22. Andrew Little – still there
  23. Nanaia Mahuta – still there
  24. Kieran McAnulty – still there
  25. Chris Hipkins – still there

So in just 12 months, of their 25 Ministers we have had:

  • Three sacked (would have been sacked if not resigned)
  • Two resignations from Parliament
  • One defection
  • Four retirements
  • A new Deputy PM (and PM)
  • A senior Minister who quit Revenue because the PM over-ruled him

That is a huge amount of change in just 12 months.

He seems remorseful!

Stuff reports:

A teen Mongrel Mob member who broke into the home of a pregnant woman and indecently assaulted her in the bed she was sharing with her child has been sentenced to 12 months home detention.

Napier man Stevie Taunoa, 19, thanked Judge Gordon Matenga after receiving the sentence on Thursday morning then walked from the dock into the police cells and yelled “Cracked it”.

He seems genuinely remorseful doesn’t he. I am sure he will never reoffend, eh.

My Stuff column on the mass shooting

Good Luxon profile

General Debate 25 July 2023

A few headlines

  1. Audrey Young: it will be a miracle if Chris Hipkins can rescue his Government from this
  2. Barry Soper: Dame Jacinda Ardern left Chris Hipkins to clean up the mess she created. “The Ardern/Hipkins Government have failed on so many fronts, despite their unbridled power, the strongest majority since the first Labour Government of Mickey Joseph Savage 1935 …This Government has left a lawless, impoverished, struggling country, longing for relief.”
  3. Jenna Lynch: Kiri Allan’s sudden departure leaves Labour fighting for political survival, public confidence
  4. Fran O’Sullivan: The Government needs to be put out of its misery with an early election.
  5. Kerry Woodham: The Government is a rudderless ship.
  6. Felix Desmarais: Did Labour just lose the election?
  7. Jonathan Milne: Labour’s car crash of an election campaign

You have to agree with Fran that the humane thing to do would be to put the Government out of its misery.

The race for Auckland Central

Over the next three months I will profile all 72 electorate races, including a prediction being one of safe, likely, leans or too close to call. These will all be exclusively on my Patreon (sub needed).

In 2020 I went from North to South. In 2023 I am going to go alphabetically, so am starting with Auckland Central.

I’m including this initial one on Kiwiblog, so people can see what they will get if they subscribe.

The race for Auckland Central 2023

2020 Results

Majority: Gre 1,068 (64/72) or 3%
Nat Party Vote: 21% (51/72)
Lab Party Vote: 46% (49/72)
Gre Party Vote: 19% (4/72)
Nat Candidate Vote: 28% (46/65)
Lab Candidate Vote: 33% (68/72)
Green Candidate vote: 35%
Nat Candidate Vote/PV: 130%
Lab Candidate Vote/PV: 70%

2023 Candidates

Green MP Chloe Swarbrick won the seat in 2020, after the retirement of Nikki Kaye. Prior to Kaye winning it in 2008, it had been a safe Labour seat. Swarbrick is standing again.

The 2020 Labour candidate Helen White, who was widely seen to be lacklustre, now is standing for the safe seat of Mt Albert. The new candidate is Oscar Sims a software developer and urban housing activist. Labour selected him over List MP Naisi Chen, when could be a mistake considering a third of the electorate is Asian.

National’s candidate is Mahesh Muralidhar, an entrepreneur and venture capitalist. He is running a high profile campaign, and has good links into the large ethnic community in the seat.

Also standing is Ted Johnston for New Conservatives and Damian Sycamore for TOP.

Demographics

Auckland Central is a seat for the young and childless. It has the lowest proportion of children in the country and the highest proportion of 25 to 35 year olds.

33% of the electorate are Asian and it has the highest proportion of Middle Eastern/Latin American/African residents in NZ at 5%.

Only 45% of the electorate were born in New Zealand – the lowest percentage in the country.  A third of those born outside NZ have lived here for less than two years, so are probably overseas students.

40% of residents have lived at their current address for less than a year – the most transient population in the country. 

A key issue may be turnout for those who are new to New Zealand. Historically their turnout is less than those here longer term.

2023 Outlook

Auckland Central is a red seat. It was held by the left for 90 years and votes left on the party vote. Labour and Greens got 65% of the party vote last election, the 20th highest in the country.

Incumbent MP Chloe Swarbrick has huge name recognition nationally. She often polls up to 5% as Preferred PM, and is in the media often, including as a columnist in the NZ Herald. 

Labour’s candidate is not well known, but likely to perform relatively better than Helen White. However Labour is far less popular than in 2020.

National’s Emma Mellow came third in 2020, but that was on the back of a disastrous performance for the party nationally. With another good candidate in Mahesh Muralidhar, they could end up in at least second place.

Overall I rate the seat as Likely Green hold. Swarbrick is popular with both Labour and Green voters, and enough Labour voters will choose her over Sims that she should hold on.

General Debate 24 July 2023

Justice Minister arrested, resigns

The Herald reports:

Justice Minister Kiri Allan has resigned as a Cabinet minister after being charged with reckless driving and resisting arrest in Wellington last night.

Allan was taken into police custody on Sunday night after a car crash in Wellington and “is assisting with inquiries”.

A statement from Prime Minister Chris Hipkins said that Allan was taken into custody and held in Wellington Central Police station after the crash on Evans Bay Parade in Wellington at 9pm last night.

She was charged with reckless driving and resisting arrest and was released custody at 1am Monday, Hipkins said.

What a sad end to a political career.

A car crash could happen to most people, but to have a Cabinet Minister resist arrest is almost unheard of, let alone the Minister of Justice. She’s obviously been under considerable pressure, but it is hard to fathom how she could have done this.

UPDATE: The information given out by Chris Hipkins was incorrect. Allan was only charged with careless driving and was not charged with resisting arrest.

This is good discipline

The Herald reports:

Two of Act’s current MPs are keeping a stiff upper lip following their recent demotion on the party’s list, which risks them missing out on another three years in Parliament.

Chris Baillie and Toni Severin were the biggest losers in Act’s list for this year’s general election, released on Sunday. Baillie, ranked fourth in 2020, fell to 17th while Severin dropped from ninth to 14th.

Baillie, speaking to the Herald last night, admitted he hadn’t been expecting to drop so far down the list but said he was largely unfazed by it, citing additions of high-profile candidates such as ex-Federated Farmers president Andrew Hoggard and former National MP Parmjeet Parmar.

“I sort of suspected that there were a few others in the wings who would be really good contenders, so yeah look, I’m not bothered,” he said.

“I’d love to spend three years actually having a bit of say in the legislation as opposed to these three years, but if [I don’t get in] then I certainly won’t begrudge anyone for that.”

Severin, Act’s Corrections and ACC spokesperson, accepted it was a slight blow to drop five places in the rankings but she was nevertheless confident on a return to Parliament.

“I don’t see it as a step back at all, this is just what happens when you have new talent coming,” she said.

“Like everything, we’ve all got egos [and] it took a bit of a hit but, in general, I’m pretty happy.

“I’m pretty certain this time around that I will be back in and [I’m] looking forward to working with my new teammates.”

Severin didn’t believe any of the current MPs would feel resentful and said people of her and Chris’ vintage were no strangers to a bit of adversity.

“Chris and I are both probably of an older group that we’ve had probably tonnes of knock-backs in our lives, but you just pick yourself up and move forward and, you know, you can’t compete when you get high-calibre people coming forward to join the party.”

This shows remarkably good discipline and loyalty within ACT. As I said the list ranking was quite brutal on incumbents, but none of them have had a tantrum. In fact they are saying they understand the need to bring in fresh blood.

Compare that to the Greens where one MP was so distraught she was *only* ranked No 4, she was openly plotting to undermine the No 3 candidate. It was classic ego over party.

A woeful press conference

Luke Malpass writes:

But after that there were a series of questions which neither Hipkins nor Davis were able to satisfactorily answer.

In fact, by the end of the press conference it wasn’t very clear exactly what the facilities were for, what age young offenders they would cater for and there was no idea about the cost. …

Either way, by the end of the press conference the only thing that was clear was that there would be new secure buildings built in – most likely – Christchurch and Auckland. It was just about the worst press conference performance from Labour ministers in this term of office.

Almost as if this was a policy dreamed up on the back of a napkin, like Kiwibuild!

General Debate 23 July 2023

Homelessness worse in Wellington

The Herald reports:

The Wellington City Council has again announced it wants to end homelessness after already trying to do this by 2020 and failing.

It’s hard to imagine the council holds the secret to solving a problem that has become entrenched in our society but here we are, again.

On the face of it, the council’s latest housing action plan reads more like an ideological wish list than a meaningful blueprint.

This is about Councillors wanting to virtue signal.

Te Mahana was launched in 2014 with the goal of eliminating homelessness by 2020. It failed to achieve this ambitious goal with the problem actually getting worse over that time, not better.

This is no surprise.

The council has spent $3.3 million on homelessness through grants and contracts over the past decade.

But council documents show a review is under way into the “effectiveness of those financial contributions to understand the impact of the council’s investment in homelessness prevention and response”.

They spent $3.3 million and the problem is worse. Now they will spend more money on consultants to tell them the spending didn’t work, but no doubt the solution is to spend even more.

A preventable death

NewstalkZB reports:

An Auckland man who caused the death of his partner by dousing her in petrol and lighting their bedroom on fire has been ordered to serve at least 18 years in prison after it was noted he twice before used fire to threaten or control the victim.

Poi Tinei, 51, was already well known to police – having been the subject of 15 family harm callouts in recent years – when officers and firefighters found the body of Teao Ida Wiki, 53, facedown in a bathtub inside Tinei’s Manurewa home soon after the blaze was extinguished last September.

So why was he out and about?

Labour introduces a new offence with the same penalty as the existing offence!

Stuff reports:

The Government will introduce a ram raid bill, to create a new offence and to allow police to prosecute 12-year-old ram raiders.

Under the proposed law, ram raiders could be imprisoned for up to 10 years, Prime Minister Chris Hipkins said. The law change would also mean children who commit ram raids can be charged and tried at the Youth Court.

But the 10-year maximum sentence for ram raiding would not be any different from the existing penalty for burglary, which is also a maximum of 10 years. 

More window dressing.

General Debate 22 July 2023

Minister complains newspaper allows opposing views

Astonishing that a Minister of the Crown would take the time to complain to media that two of their columnists are former National Party Ministers. Must be feeling the pressure.

Inflation by term

The next inflation data will come out after the election, so it seems timely to now look at the inflation record since the monetary reforms in the late 1980s.

The graph above shows the total inflation increase from June to June (so June 2020 to June 2023 for the latest). The target is for annual inflation of 2% so below 6% is good. Between 6% and 9% over three years is acceptable and over 9% means you are constantly breaching the agreed upon maximum.

The cumulative inflation in the last three years is greater than the total inflation in nine years from 1990- to 1999 and from 208 to 2017. And that includes a GST increase in 2010 which had compensating tax cuts.

Basically we have never had sustained inflation like this, in the last 30 years. An 18% increase over three years is unprecedented, and of course most people have not had wages go up 18%.

And for those who like to blame it on Ukraine, I share this graph from The Facts: