Leading public health and tobacco control researchers are warning that any move to reduce New Zealand’s tobacco excise tax could reverse decades of progress in reducing smoking rates and hand a significant advantage to the tobacco industry.
The concerns follow comments by Associate Health Minister Casey Costello, who has confirmed she has submitted a paper to Cabinet proposing a review of tobacco excise tax. The proposal has fuelled speculation the Government could consider lowering tobacco taxes as part of its response to illicit tobacco sales.
Health Coalition Aotearoa’s Smokefree Expert Advisory Group says increasing or maintaining tobacco prices remains one of the most effective ways to encourage smokers to quit and prevent young people from taking up smoking in the first place.
University of Auckland tobacco researcher Professor Chris Bullen says decades of research consistently show that the cost of cigarettes is one of the strongest motivations for smokers wanting to quit. High prices also discourage experimentation among rangatahi, helping keep youth smoking rates low.
Researchers reject suggestions that reducing excise tax would weaken the illicit tobacco market. Instead, they argue criminal suppliers can easily undercut any reduction in legal prices because illicit tobacco is inexpensive to produce and highly profitable.
Professor Janet Hoek, co-director of the ASPIRE Aotearoa Research Centre at the University of Otago, Wellington, says lowering tobacco taxes risks creating a price war that the Government cannot win while placing millions of dollars in excise revenue at risk.
Rather than reducing taxes, researchers are calling for stronger enforcement against illegal tobacco imports and sales. They say greater investment is needed for Customs, Police and Ministry of Health enforcement teams, alongside improved border surveillance and tougher penalties for illegal retailers.
The experts also support introducing a comprehensive licensing system for tobacco retailers, backed by strong compliance measures and significant penalties for those selling illicit products.
They argue that the most effective long-term strategy is to continue reducing the number of people who smoke by expanding evidence-based quit-smoking support, reducing the number of tobacco retailers and regulating the addictiveness of tobacco products. As smoking rates decline, demand for illegal tobacco is also expected to fall.
Researchers also caution against drawing direct comparisons with Australia, where illicit tobacco has become a significant problem.
Public health experts say Australia’s experience reflects a unique combination of organised criminal involvement, widespread illegal sales through tobacconists and delays in enforcement action, rather than simply high tobacco taxes.
Despite industry pressure, the Australian Government continued with annual five percent tobacco excise increases between 2023 and 2025, maintaining that higher tobacco prices remain a cornerstone of effective public health policy.
Researchers say New Zealand has an opportunity to avoid Australia’s challenges by acting early against organised illicit tobacco networks while maintaining policies proven to reduce smoking rates.
For Māori communities, where smoking continues to contribute disproportionately to preventable illness and premature death, public health advocates say preserving strong smokefree measures remains critical to improving long-term health outcomes and reducing inequities.
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