Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill

The title of this bill is the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill. Actually, often what the Opposition does in these debates is we offer alternative titles to the bill—what it might more appropriately be named. But in this case I think this is an appropriate title. In fact, the title reveals what the actual intentions of the Government are in this bill, because specifically it is about excise, tobacco products, and Budget measures. It is a Budget measure. The Budget measure, of course, that this bill relates to is trying to find ways to fill the hole left in the Government’s revenue sources, both through its inadequate work on the economy and through its unaffordable income tax cuts that it made, which it told the nation were going to be fiscally neutral, but have actually left a huge hole in the Government’s revenue. As the debate has gone on tonight we have come to understand the real significance of this legislation, because it does two things—in Part 1 and Part 2.

The first part is a massive increase in revenue for the Government, to make up for some of that lost revenue, with no hypothecation into any smoking cessation measures or any treatment of diseases that are related to smoking. Part 2, of course, limits the Government’s liability for paying out benefits, not just the sickness benefit and invalids benefit but also pensions, also payments to people who are caregivers, and also to people who receive a veterans pension. So, actually, as much as we, on this side of the House, are really pleased to see the Government doing something—we know one of the results of this bill will be to have an impact on the number of people who are smoking and the amount that they smoke—the more and more that we analyse this piece of legislation, the more it is revealed that this has got more to do with trying to increase revenue for the Government, and limit its costs, than it has with anything to do with health.

Let us look at the facts. It was not introduced by the Minister of Health. It did not go to the Health Committee. In fact, if it had gone to the Health Committee, perhaps some more of the changes that would be useful in this bill would have been recommended, because it would have been viewed through the lens of a health initiative, rather than a financial initiative, and rather than a tax bill, which is simply about increasing revenue and limiting liabilities and costs for the Government. So, indeed the title of this bill and, in fact, the purpose of this bill, as well, are absolutely accurate—they are absolutely accurate—because the bill makes no mention of health measures, it makes no mention of trying to reduce the incidence of smoking, it makes no mention of trying to ensure that fewer people die of tobacco-related diseases every year, it makes no mention of improved funding for tobacco health initiatives—it makes no mention of any of that. All this bill does is increase revenue and reduce costs.

Also, if this was a health initiative and the Government was focused on ensuring that everybody, every smoker, was going to be properly impacted on by this legislation, then we would not see the deliberate targeting of people who receive a benefit in the way that we see in Part 2 of this legislation. The Government had an option. It had the option to remove the tobacco excise increase from the CPI calculation for everybody, but it did not do that. It could have, but it did not. It chose instead to deliberately pick on people who get some form of Government assistance, whether it be through Working for Families, whether it be through a veterans pension, whether it be through superannuation, or whether it be because that person is a caregiver. For a whole host of reasons, if that money came from the Government, then that is the person that the Government has chosen to pick on. It did not need to do that—it did not need to do that—and that is what this bill is all about.

I call the honourable member, Dr David Parker.

💬 Dr David Clark: David Parker? That’s new to me.

The CHAIRPERSON (H V Ross Robertson): David Clark.

Mr Chair, I hope you will excuse me. I am working under a pseudonym. I rise to speak to the—perhaps appropriately addressed—title debate. I want to go a step further than my colleague Iain Lees-Galloway, although I support the sentiment entirely in his address on this topic. He suggests that the bill, the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill, is perfectly named because it does not mention the health benefits. It is a tax bill so, therefore, we might well view it as an appropriately labelled bill.

I think I would want to go one step further to make a little more explicit what the purpose of this bill is. I would like to see it renamed. I guess we will ask the Government to consider this suggestion and, you know, present its argument as to whether it is a useful one or not. My suggestion is that we rename it the “Fill the Revenue Hole but Decrease Smoking as an Unintended Consequence Bill’, because I believe that that is what the bill actually does—that is what the bill actually achieves.

The reason why the bill is an unintended consequence is that the facts line up and say that increases in revenue actually do discourage smoking, and we know that smoking remains the single biggest cause of preventable morbidity and mortality in New Zealand. There is good reason to address this problem, especially when half of all long-term smokers die as a result of smoking-related illness. That is about 5,000 deaths each year that are attributable to smoking either directly or through an indirect route like second-hand smoke. But unlike National when it was in Opposition, Labour has supported Government moves to reduce smoking in New Zealand. Labour has been consistent in supporting moves to reduce smoking in New Zealand, and that is why we see, if we look back, that this title highlights, I guess, the irony in the National Government moving this bill. It says that the decreasing of smoking is an unintended consequence, and that it really is about the revenue-grabbing.

How do we know that? We know that because when in Opposition, Bill English, who is now obviously concerned about the revenue hole that this Government is facing, said that it was a tax increase when Labour moved measures. When Labour moved extraordinary urgency to increase the excise on tobacco in the early 2000s, Bill English said “It is a tax on the poorest people in New Zealand. It is an increase that is far too large.” So he labelled it a tax increase. That is what he thought it was, nothing more, nothing less—nothing more, nothing less. So that is why we know that it is an unintended consequence that it is actually addressing smoking, and why the title “Fill the Revenue Hole but Decrease Smoking as an Unintended Consequence Bill” is a far more fitting title than the one that the Government has proposed.

So I move that we consider that title. I do not formally move it. I move it in the sense of having a debate about it and inviting the Government to consider that as a more fitting title, a more honest title, and as a title that would reflect the content of the bill, which is presumably what a title is designed to achieve, so that we could have a bill that reflects the Government’s real intention, which is about filling this revenue hole, which it has no other plans or means to do so.

I will take a call on behalf of New Zealand First in relation to Part 2 of this bill, the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill. This does come as—

The CHAIRPERSON (H V Ross Robertson): Sorry, the member cannot refer to Part 2. That debate has gone. We are now debating clauses 1, 2, and 3.

Yeah. OK, Mr Chairman. OK. Sorry, Mr Chairman.

The CHAIRPERSON (H V Ross Robertson): It is wide-ranging—title and commencement clauses.

It does concern us what has been dropped on us here in terms of this bill in relation to beneficiaries, superannuitants, and those in the country. This is a pretty miserable, late-minute thing that the Government is doing here, in terms of just sliding something through that is, again, an attack on beneficiaries and those who are in need of support from the State.

The reason I was a bit slow getting to my feet was that I was just doing some calculations on this in terms of the CPI, and was looking at the effects of the CPI on superannuitants and on beneficiaries. When you are looking at a single-income beneficiary on about $400 a week, or a couple on a bit over $600 a week, and if you are looking at the difference in the CPI effect because of taking tobacco out of the CPI or keeping it in, it is such a small amount of money from the point of view of the Government’s revenue, but it can actually have an impact on the beneficiaries. Although to us it might not appear a lot of money, every few dollars every week adds up. I think it is really very much a situation of penny-pinching again, on the part of the Government, that a few dollars out of every beneficiary’s pockets could be affected through the adjustment in the CPI by not including tobacco in the CPI.

It really is back to the “Fagin Budget” that I have mentioned in Parliament on a few previous occasions. The Government has already taken money off the paper boys and the paper girls—taken $14 million off them. Having taken $14 million off the children of this country, now it is going to adjust the CPI so that the CPI also reflects that tobacco is not included in the CPI. It is really getting down to real miserable penny-pinching - type budgetary constraints. In that regard, it is creating a situation in New Zealand where you have a CPI for some and you have a CPI for others, and where the CPI applies to those with money on a higher level of CPI, and those who are on welfare support have a different CPI adjustment.

In particular, in regard to the senior citizens in this country and those on superannuation—many of whom are not smokers; many of whom have not smoked—why should they be penalised and have some sort of alteration to the CPI adjustment and an increase, simply because this Government wants to be miserable and claw back some money because of the 10 percent annual increase each year for the next 4 years on cigarettes? You know, it really is starting to bite close to the bone in terms of our senior citizens, in particular, and those with disabilities and those on welfare who through no fault of their own and in times of difficulty, due to ill health or disability, or because they are aged, are requiring support from the State.

New Zealand First will not be supporting this part of the bill. We do support the overall thrust of the bill in terms of the health aspects and reducing cigarette smoking and tobacco consumption, but when it gets down to starting to penny-pinch to attack those who are the most vulnerable in New Zealand society—

💬 Denis O’Rourke: And the elderly.

—and, in particular, the elderly, who would be affected by a reduced adjustment on their superannuation increases from the CPI being cut back in terms of beneficiaries—then I am sorry but this is another case of the Tory Government being very miserable to people who deserve better. So New Zealand First will not be supporting this part of the bill.

Clause 1 agreed to.

on behalf of the Associate Minister of Health: I move, That the Committee divide the bill into the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill, the Children, Young Persons, and Their Families (Indexation—Budget Measures) Amendment Bill, the Education (Student Allowances Indexation—Budget Measures) Amendment Bill, the Income Tax (Working for Families Indexation—Budget Measures) Amendment Bill, the New Zealand Superannuation and Retirement Income (Indexation—Budget Measures) Amendment Bill, the Social Security (Indexation—Budget Measures) Amendment Bill, and the War Pensions (Indexation—Budget Measures) Amendment Bill, pursuant to Supplementary Order Paper 129.

It is a pleasure to speak to Supplementary Order Paper 129, moved on behalf of the Hon Tariana Turia. What this Supplementary Order Paper does is that it divides the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill into a number of bills. This will separate out all those separate pieces of legislation that need to be amended in order to discriminate against different people who receive income from the Government.

The Labour Party will be voting in favour of this Supplementary Order Paper to separate the legislation, but I would like to indicate at this point that it will be our intention, when it comes time to vote on those separate pieces of legislation, to vote against the individual bills that will relate to that specific measure that the Government is taking. We will vote in favour of the new Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill, but we will vote against the Children, Young Persons, and Their Families (Indexation—Budget Measures) Amendment Bill, the Education (Student Allowances Indexation—Budget Measures) Amendment Bill, the Income Tax (Working for Families Indexation—Budget Measures) Amendment Bill, the New Zealand Superannuation and Retirement Income (Indexation—Budget Measures) Amendment Bill, the Social Security (Indexation—Budget Measures) Amendment Bill, and the War Pensions (Indexation—Budget Measures) Amendment Bill, because we believe that the Government has taken completely the wrong approach in discriminating against a certain set of New Zealanders who will not have the ability to be reimbursed, I suppose, for this increase, whilst allowing others to be able to do so.

We understand what the Government is trying to achieve in increasing the cost of tobacco in real terms and ensuring that there are fewer opportunities to offset that. However, if the Government’s true intention was for that impact to be spread fairly across all smokers, then it would have taken an approach whereby the CPI calculation for all smokers would not include the tobacco tax increase. Rather, it has taken the approach that only those who receive some form of income from the Government will be affected. That is why the Labour Party is certainly happy to see the separation of these bills, because we want to be able to vote for the parts of this bill that we think make sense.

We agree that increasing tobacco taxation is one way of reducing the harm caused by tobacco. We suspect that the Government’s real motivation behind doing that is to make up for its lost revenue, but we do appreciate the perhaps unintended consequence for the Government of doing so—that it will reduce tobacco-related harm. So we want to be able to vote for that aspect of the bill, but we actually appreciate that this amendment will allow us to vote against those measures that we think are rather insidious and create just one more division between people who receive income from the Government and other New Zealanders. That is certainly what this Government’s approach has been over the last few weeks: to drive that wedge between some New Zealanders and others as hard as it can. It wants to see people fighting amongst themselves. It wants to see people pointing the finger of blame at the victims of poverty rather than trying to do something about it. This bill, in its own small way, has been found out tonight as being part of that Government programme to continue to discriminate against anybody—anybody. It is a broad brush in this bill; even the poor veterans are getting hit with this bill. So we certainly support—

💬 Denis O’Rourke: Superannuitants.

And the superannuitants—you are absolutely right. The superannuitants, the families who receive Working for Families—a whole range of people are going to be unnecessarily discriminated against with this legislation. So it is good that this bill will be separated out into its component parts by this Supplementary Order Paper in the name of the Hon Tariana Turia. That will give the right-minded parties in this Chamber the opportunity to vote for those aspects of the legislation that will do good, and against those aspects of the legislation that will do harm.

It is a noble idea to ensure that the excise tax increase results in an increase in real terms in the cost of tobacco, but it is not noble at all—it is as far from noble as is humanly possible to be—to determine that one group of New Zealanders will be hit by that methodology and others will escape from it.

The Labour Opposition is very happy to support this Supplementary Order Paper in the name of the Hon Tariana Turia. We think it will be useful—it will be quite useful—because it actually will allow Parliament to reveal what some of these measures really are, what their true intended purpose is, and will give Opposition parties the opportunity to cast their votes accordingly. As I have said, I want to signal that tomorrow during the third reading debate on these bills, as they will be by then, the Labour Opposition will certainly be voting against those measures that discriminate against people who receive a benefit or an allowance from the Government.

Motion agreed to.

Bill to be reported without amendment presently.