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Ed Sheeran

Diminishing returns spell end of tobacco tax rise

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New Zealand First MP Shane Jones says it's time to recognise market forces haven't led to the expected reduction in Māori smoking rates and try a new approach.

Party leader Winston Peters has invoked the agree to disagree clause in the coalition agreement to say New Zealand First won't vote to a further 11.46 percent increase in the tobacco excise from 1 January 2020.

The last annual increase resulted in just a 0.7 percent decrease in smoking prevalence, or a 1.3 percent decrease among Māori smokers, indicating the policy has reached its limit.

Mr Jones says the annual hikes were a legacy of Mana MP Hone Harawira's Māori Affairs Select Committee inquiry into tobacco control, which were then picked up by then associate health minister Tariana Turia and finance minister Bill English.

"I think Bill saw it more as a revenue-generating device and in that regard, he's been incredibly successful. What Winston is actually saying is that this is the final of the price increases in relation to a duty and it is time now to take stock because in the key target areas cigarette smoking has not gone down," he says.

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