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

I move, That the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill be now read a second time. In the first reading I spoke about why this legislation is good for all New Zealanders. I talked about the costs of smoking and I presented some evidence to suggest why this is important to New Zealanders—why it is important to the health of New Zealanders—and why a tax is part of an overall package to bring down the costs of smoking, to save lives, and, overall, to improve the well-being of New Zealanders.

Some points have been mentioned from across the Chamber around applying these tax revenues to the public health spend. It is true that there will be $425 million raised over the next 4 years, but, as Minister Coleman said in his comments yesterday after the Budget speech, that will go towards more hip and knee replacements. That will go towards disability support services for those in need. It will also go towards the bowel cancer screening programmes that will be delivered in the next 4 years. Those are the types of health programmes that are good for New Zealanders, and I do not think New Zealanders out there would argue that this money would not be well spent on health services delivered to New Zealanders over the next 4 years.

Members opposite said that it was just a revenue grab, but, you know, increasing tobacco excise—we know, and it is internationally recognised, that it reduces harm and that it reduces the cost to society. Members opposite also referred to the impact on lower socio-economic groups, but only one member opposite actually understood and looked at the evidence. I thank Ms Wall for actually doing the research and understanding the impacts of this legislation, and I want to quote from the experts whom Mr Clark mentioned. In the study by Wilson, Thomson, Tobias, and Blakely, they raised two conclusions. The first is that “The estimated harm to life expectancy from tobacco taxation … is orders of magnitude smaller than the harm from smoking.”, and, secondly—and this is important for us as lawmakers in this debating chamber—“Policy makers should be reassured that tobacco taxation is likely to be achieving far more benefit than harm in the general population and in socioeconomically deprived populations.” That is the evidence that has been presented. Ms Wall understands that. I suggest she talk to her colleagues just to bring them up to speed with some of the latest evidence.

What was also mentioned—and the Māori Party referred to it—was that this measure, in and of itself, is beneficial to the health of New Zealanders, but, in and of itself, it requires support. So there is a comprehensive tobacco control programme in this country. It is world-renowned and it is delivered with serious health outcomes in mind. The effectiveness of these programmes has been measured and they do, through the various smoking cessation tools and programmes, face-to-face smoking cessation interventions, as well as Quitline and the stop-smoking medicines—there are a number of these programmes out in the community that are being used to reduce the incidence of smoking.

Some programmes are more effective than others and, I reiterate, our Government is committed to ensuring that the programmes that are working well should be funded and those that do not work so well should be cut. It is as simple as that. We want more effective programmes because we know that if you invest a dollar of taxpayers’ money, you want to see a return on that investment where it costs—Treasury estimates that the valuation of stopping a person smoking is about $38,000. The valuation of preventing someone from smoking is approximately $13,000.

Other members in this House have also referred to a black market supposedly being ramped up. Well, there is no evidence—no evidence whatsoever—of this market being in place. The officials have looked at the size of the illicit tobacco market in New Zealand. It is estimated to be about 2.8 percent, which is far lower than it is for some of our trading partners overseas. It is far lower than those whose health systems we compare ourselves with. So there is no evidence of that. But the authorities—the Customs Service and the police, as well as health officials—are keeping a watching brief on this particular area.

So I want to just summarise by saying that smoking is responsible for close to 10 percent of health loss from all causes, and it includes 4,500 to 5,000 premature deaths a year. That is why we are passing this bill. It is a useful bill. It is something that I think most parties around this Chamber are supporting. It is helping us on our way to our smoke-free goal by 2025, and again, in this second reading, I urge members opposite, members around this Chamber, to support this piece of legislation.

I want to take a few minutes at the start to respond to a couple of the speeches that have happened so far in this debate. Mr Lotu-Iiga, right now, has failed to give the assurance we sought that the money from this bill would be put back into public health.

💬 Hon Peseta Sam Lotu-Iiga: More surgeries.

He has talked about meeting inflation pressures. He just said “More surgeries.”, as though that was public health—as though that was addressing those drivers of cost in the sector, which we all know about, that have such significant consequences. The member clearly does not really understand the issue, and that is frightening because this is the Minister responsible for introducing this bill. He does not seem to know what he is doing on this topic. He was not able to give the assurance, but he thinks he has, which is the frightening, frightening thing when we are in this House and he is the Minister responsible for this legislation.

We have heard from Mr Brownlee various conspiracy theories, including that the scientists and academics who speak out on this topic have a vested interest and that the scientists and academics who speak out on it somehow will not have a job because the Government has been so successful in this regard and, therefore, they are against the Government because of the Government’s success. I suspect he has probably got another theory about the man on the moon and a few other things, but, frankly, this claim just does not stack up. I do not think anyone in this House believes there is a great conspiracy amongst the lethal left-wing academics out there to try to criticise the Government because it is so successful. The claim is ludicrous. It was an entertaining speech from Mr Brownlee, but that is not really why we are here.

We are here to actually put through a measure that will make a real difference, and we will be supporting this measure because putting an excise tax in place does make a real difference—we know that—in terms of smoking cessation. But we also know that what the academics say is right, which is that the 2025 target is a pipedream without other measures. If that money is not put into smoking cessation programmes and if it is not put into Quitline and so on, the devices that help people quit, the 2025 target will simply not be achieved.

Another interesting thing that I have learnt in my research recently is that the behaviour of tobacco companies, when they are given a lead-in time like they are being given in this legislation, is to push the cost on to premium products rather than gateway products. I seek an assurance from the Minister that he will be looking to ensure that this tax is covering all tobacco products in an even way across the market. I look across the House and hope that the Minister is able to give that assurance in his next address. Otherwise, what we are doing is simply putting a whole lot of excise tax on to the luxury cigars that are bought by people for whom money is no object, and not on to the gateway products—those cheap cigarettes that first-time smokers use. So I would like an assurance from the Minister. He may be able to give this assurance that it will be applied evenly across all products.

Why we need such a lead-in time is not clear to me. If it is so that tobacco companies can reorganise their affairs so that they will be minimally affected by this, I will be disgusted, and I think every other member in this House would also be disgusted to learn that. I want the Minister to consider this again—perhaps have a look at what public health actually is and see whether he can give an assurance that this money will actually go into those things that would help us to achieve the 2025 target for quitting.

I did not hear Mr Seymour’s contribution. I was called away on urgent public business and was very disappointed to miss his response, because I was looking forward to the tortured explanation that he was going to give about why he does not support this measure at all but is going to vote for it in the debate, in support of the Government. I think, from colleagues who were in the House who have briefed me, the basic logic was that it was a failed measure that will not work but he will support it because it is a Budget measure. That equates to he will support it because it means he will get a quid pro quo. He will get some corporate welfare out of it. He will get to put in another charter school that is funded at five times the rate of our public schools. I think that is why that member is supporting the bill in this House. He speaks about nothing but corporate welfare, that man—the man from ACT. He has this stance that the Government should spend less money, but when it comes to his mates, the Government should spend more money. It is unfathomable that he can stand up and say that, and do it without breaking down into some kind of—I do not know—self-immolation or something. It is unfathomable that something strange does not happen in that kind of circumstance. It is a very, very tortured logic, but something, though, he seems to be perfecting.

But I will look forward. No doubt he will speak further in the debate and we will hear more about the tortured logic as to why he should support the bill, even though he opposes the whole idea—that is what we have got here in this House. Actually, this Government has very few principles. We can see that in what it is doing. It is treating this as a revenue grab. It is a good measure, and we will support it for that reason, but the Government is not putting the money back into the public health-care that this country needs. The Minister is not prepared to give a cast-iron guarantee that this money will not go into flag projects—let us have another flag referendum!

The Government is not able to give a cast-iron guarantee that it will not do another deal like the Skycity deal, which again was another form of corporate welfare, where it handed out money, hand over fist, because it did a bad deal behind closed doors, which the Auditor-General criticised. The Government cannot give a cast-iron guarantee it is not going to do another Saudi sheep deal, where it is giving money to Saudi businessmen and providing documentation and advice out of New Zealand Government agencies that will not even be released to the New Zealand public.

The Government will be bailing out someone else—MediaWorks; who knows what—next. That the Government does, and it will not give a guarantee that this money will not go to those kinds of deals. That is what the Government does, sadly. We want to see, of course, that money go into public health. We are concerned, of course, across the Budget, as we have seen this health care underfunding issue continue. There is $1.7 billion in underfunding, using Treasury’s figures and analysis from Infometrics—independent analysis that shows that with rising inflation and cost pressures you need to put more money into health each year.

The Government has underfunded over the last 6 years by $1.7 billion. It is no wonder that New Zealanders are missing out on the services that they require. We have seen in the latest round that there are 15 district health boards (DHBs) that will not receive enough money to meet the funding pressures. The real losers in this round are Canterbury District Health Board, which will be $33 million underfunded, Waitematā District Health Board at $27 million underfunded, and Counties Manukau District Health Board at $18 million underfunded. But there are 15 DHBs that, again, are not funded for cost pressures in the Budget. Of course, it is a bit more than the Government has put in, in previous Budgets.

The Government wants the DHBs to get closer to their targets this year, because election year is coming. There are no surprises there. The Government is putting a bit of lipstick on for election year. It wants the DHBs to have smaller deficits. It wants one or two even to reach surplus. The Government is dressing it up for election year. This is the year that the Government has decided to put a little bit more into health, but it will not be enough to meet all those cuts that have already been made—we know that; we know that.

💬 Mr DEPUTY SPEAKER: Back to this.

Back to the issue at hand, in terms of whether this measure is bringing in money for the general pot, to be spent on flag referendums, and so on, or Skycity deals, or whether it is being spent on public health, as it should be. Unfortunately the Minister has been able to give us absolutely no assurances whatsoever in that regard.

When tobacco companies get that lead-in time, as I mentioned earlier, they adjust the range of their products on the market. I do look forward to the Minister’s assurance that the excise tax will be spread across all products, not just across different providers in the market, but across individual products. Therefore, providers cannot rearrange their ranges to maximise their profits—keep the gateway products cheaper, so that they can apply the tax to the luxury products at the top of their market. We know that is their behaviour.

The Government has two former tobacco lobbyists, and they will certainly know the answers if the Minister does not have that answer at the top of his head. I wonder why the Government has not taken stronger measures on smoking cessation. Perhaps the answer does lie in the fact that the Government has two former tobacco lobbyists amongst its numbers. They will certainly be defending the interests of the industry, as they understand it. This Government has failed to deliver on health for New Zealanders. Middle New Zealand is missing out. The Government seems much more interested in the interests of a very wealthy few at the top. When it comes to this measure, it seems to be money coming in—

💬 Mr DEPUTY SPEAKER: Get back to the bill.

As I said, it is money coming in so that the Government can dangle tax cuts next year, money coming in that it cannot assure us is going to be spent on public health measures. We will support the bill because it is one of the most effective things that can be done to help smoking cessation. But the Government is not on track to meet its 2025 target. That is what the specialists say. The Government needs to put more in play if it is really serious about achieving that goal.

I want to pick up on one of the points made by David Clark in his recent contribution. It certainly is a pleasure to see Chris Bishop and Todd Barclay voting for the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill. I want to recall Budgets of years gone by. I remember sitting next to the radio, listening to finance Ministers from the past reading out the Budget. Very often there was a measure to increase an excise tax on tobacco or alcohol that would typically take effect pretty much immediately. The House would move immediately to debate a bill that would take immediate effect. For bills of that nature of course there was a reason for urgency.

I am wondering what the reason is for taking urgency for this bill. This bill actually does not take effect until the beginning of next year. It seems to me that there would have been an opportunity to hear submissions from the public, and submissions from the experts who could tell us whether or not this was an adequate measure. They could perhaps assess this measure against the progress that New Zealand is making towards the goal of smoke-free Aotearoa by 2025 that the Government says it has. I was reminded—this is the second reading—that in 2012, when the Government introduced its last round of excise tax increases on tobacco products, in fact we did have a select committee process. The Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill did go to a select committee and we heard some fascinating submissions.

I want to refer to some of those submissions because they relate directly to the issues that are the topic of this bill also. In the debate that we have had so far today we have heard one or two speakers, in particular David Seymour from the ACT Party in his extraordinary contribution, suggesting that there was no evidence of effectiveness. Well, experts at that select committee brought forward incontrovertible evidence of the effectiveness of these kinds of measures.

Just as one example—there was the evidence of increased calls to Quitline that were associated with successive excise tax increases on tobacco. We know that calls to Quitline are associated with quit attempts, and the more quit attempts people make the more likely it is that they will stop smoking. It is very clear indeed that these excise tax increases will increase quit attempts and that will result in more people stopping smoking and, additionally, we know that excise tax increases that put up the price are a very effective way of stopping people from starting to smoke. Younger people will tend not to become smokers because of the higher price.

One of the other pieces of evidence that submitters to the Finance and Expenditure Committee raised in relation to that bill, which, as this one does, proposed successive 10 percent increases, was that a jolt in the first year would actually produce a much more effective bill. I have no doubt that that would be the case in this case also. If one takes, for example, that effect of discouraging younger people from starting smoking, then actually, a 40 percent increase in the excise tax, which is what the public health community and the research experts were telling the select committee we ought to do, would have a disproportionately beneficial effect. That evidence seems to me to be also appropriate to this bill. None of the Government speakers have commented on why the Government is not choosing to introduce a jolt—a much bigger disproportionate increase in year one, for example.

The other evidence that we heard in that select committee was from very many Māori and Pasifika organisations. They came to the select committee specifically because some people had been saying “Look, this bill is going to have a detrimental effect on the poorest New Zealanders—on Māori, on Pasifika, on low socio-economic status Pākehā—and therefore we should not do it.” Earlier in this debate, Louisa Wall actually detailed some of the research that makes the very clear point that the disproportionate gains to those very New Zealanders outweigh the disproportionate cost. That is what those groups were saying to the select committee.

I want to go on to comment on the other thing that those groups said, as a bit of a qualifier to their support for the bill. They said: “Yes, the disproportionate gains outweigh the disproportionate costs, and so we definitely support it, but we want to ensure that the revenue that the Government takes in from this increase in excise tax is then channelled towards ameliorating the negative effects on our community.” Ameliorating the cost, supporting increased quitting services, and supporting health promotion services around tobacco for our communities—unfortunately, that is not what Minister Lotu-Iiga has actually said that the revenue is going to be used for. He has talked about the bowel-screening programme; he has talked about increased elective surgery.

Well, actually, what that really means is that the revenue from this excise tax is going to be channelled into the consolidated account, and will substitute revenue from that account that would otherwise be used for ordinary health services. That is not what submitters supported in relation to the 2002 Act. That is not what we support. We believe that this bill should be used entirely for the purpose of getting us towards that goal of a smoke-free Aotearoa by 2025, and achieving that goal for all groups, not only middle-class Pākehā who are already on track for it but also Māori, Pasifika, and low socio-economic status people.

So the Green Party continues to support the bill, but encourages the Government to actually do the responsible thing, which is to use the revenue not for the consolidated account but for enhancing the smoke-free programmes. Thank you.

I just want to take a minute to reply to some of the Associate Minister of Health the Hon Peseta Sam Lotu-Iiga’s statements because they bear mentioning again. In justifying this tax, which I think everyone in the House agrees is a tax on the poor, he listed a litany of underfunding in our public health system. He told us where this money would be used to plug gaps. He told us that this Government has not allocated enough in this Budget to keep up with immigration flows, and that the Government has not allocated enough to keep up with inflation. So there is still this huge gap in the provision of health to New Zealanders. He got up and proudly told the House that the $425 million of extra revenue from New Zealand’s poorest will be used to plug the gaps in New Zealand’s health system. That is just completely unacceptable.

He spoke of reducing harm—he spoke of reducing harm. I have to agree that the intent of the bill is to reduce harm from smoking—I could not agree more; that is what we need to achieve—but, as I said in the first reading, this 10 percent tax rate will not achieve that.

Why will it not achieve that? It is exactly the rate that will put revenue up for the Government—$425 million—but it is exactly the rate that will see no substantive response from those addicted to smoking. So they will not react to it. How do I know that? We had people come to speak to the Finance and Expenditure Committee, which I had the pleasure of sitting on a few months ago. What the anti-smoking lobbyists told the committee was that a tax of 10 percent would not actually achieve anything. It would not make substantive or effective changes to get people to actually stop due to the supposed financial pressures. What they actually told the committee was “what you need right now is 40 percent to 50 percent increases and then 20 percent increases from there on out.” In fact, not only did they put forward these higher numbers, but they said to the committee and to this Government that a 10 percent rate will not achieve what is hoped for in this bill, and more than 10 percent was needed.

If the Government believed the health professionals that a tax would lead to a decrease in smoking, why did it not accept the numbers that the professionals and experts put forward? This tax will take $425 million out of the pockets of the poorest, those addicted, and those who are most struggling; it will take it out of the Māori community and the Pasifika community: the poor, disproportionately more than any other group. And it will not make a difference to smoking rates, which is the justification for this tax.

Also noted was that the tax affects the poor at a far higher rate—more than any other group. Consider now that we have a system where internalising the cost of smoking—and what I mean by that is putting the tax on smokes and making those who suffer from an addiction pay for their addiction—actually covers far in excess of the cost that the health system needs to service the health problems of smokers. We have more than recouped the negative externalities to society here. That is, it is suggested that smokers pay more than three times the cost of the burden they are to society.

I acknowledged at the start of this debate that in the past these tobacco excise taxes made a difference to consumption. But I put it to the House, yet again, that they will not achieve their stated objective and that the Government has gone too far today. This tax will not stop smoking and I put it to the Government that it is just arrogance, it is just apathy, and it is just indifference. The Government has been told that this bill will hurt the poor more than any other group in society—but that is fine, because the Minister says it will be used to plug gaps in the health system.

Reducing the occurrence of smoking is vital—there is no debate; New Zealand First agrees. Let us lower the occurrence of smoking, let us help people stop. But let us realise the reality of this: Treasury itself has said that tobacco taxes were very efficient for raising revenue because the addictive nature of nicotine meant that smokers were not highly sensitive to price increases. Did they hear that? The people who they presume are going to stop smoking because of price increases will not. Treasury has told them this before. They are addicted to this substance—they will not stop smoking, and they are not sensitive to these increases. I put it to the House that this is actually just a cynical move that will achieve nothing except the further, crushing pressure that those addicted to smoking already experience now. The poor will continue to smoke at the expense of other essentials. Families and children will miss out in order to feed an addiction.

Consider further that Massey University tax expert Dr Deborah Russell said reducing smoking “was an excellent public health goal”—I could not agree more. But it could have unintended consequences. She went on to say: “Higher prices could create a black market in tobacco. This could undermine any public health benefits”. What we have to realise, then—and this is quite recent—if we look at reports just from across the Ditch there, we see a huge upswing in Australian organised crime in response to the same strategies used by the Australian Government in supposedly suppressing the occurrence of smoking by individuals within their own society. They see it as the same problem as we do. But what we see from our neighbours is that, actually, this will achieve nothing, and, in fact, will exacerbate a problem outside smoking in and of itself—it will lead to a black market. We have seen examples from Australia around organised crime, and that is, without a doubt, what will happen in New Zealand—without a doubt—if cigarettes go up into this price range.

The other irony of this Government policy—and we saw it in some of the interviews last night and this morning—is that the implementation of this higher and higher tax rate feeds the move for individuals to grow their own tobacco; it makes sense for them. They cannot sell it, but they will grow it themselves. What is the irony in this situation? The irony in this situation is that, by increasing tax rates on smoking, the tax take will actually decrease, because you are incentivising people to grow their own and bypass the legitimate market. Where is the tax take going to come from to help the people who need our health system? It will not be from smokers, because they will be growing their own and bypassing that system entirely. The incidence of criminal activity will rise.

Let us help people to quit smoking, but this is not, and I repeat, this is absolutely not the way to do it. Thank you.

I often agree with much of what Mr Tabuteau says, but on this point I am going to have to disagree with him. But I will say that I do believe this is not enough. The University of Otago and a number of other studies have concluded that it needs to be at least 20 percent or a one-off shock of 40 percent. But that is no reason, in my view, not to vote for this bill, because anything that increases the price of tobacco is a step in the right direction, and let us address the other issues as we go forward.

Mr Tabuteau raised an interesting point, and it was that all we are doing is taking the money out of the pockets of poor people who smoke, and as a consequence of that they will miss out on the necessities of life. But can I quote, and it is about a 30-second quote, from an academic study that dispels Mr Tabuteau’s concerns around that: “Another issue related to increasing taxation is its financial impact on existing smokers, many of whom are welfare beneficiaries or on low incomes. It has been noted that increasing the price of tobacco (which due to addiction is experienced as a necessity commodity) may threaten smokers’ ability to ‘purchase the essentials of a healthy lifestyle’.” The study here is Giskes et al. 2007. “Indeed, tobacco companies have cited the link between poverty and ill health as a strategy to argue against significant price increases.” That study is Clifford et al. 2014. “However, this ignores the fact that tobacco is responsible for about half the mortality difference between the highest and the lowest income groups,”—reference Marmot 2010—“so the health gains from making tobacco unaffordable will be much greater than the health risks posed by the (temporary) additional financial strain this will entail.”

This is an important point, and it was raised in the select committee because a number of us did question the impact, or the burden, on the poorest in our society who do smoke. It was acknowledged as a risk, but the academics presented three or four papers that actually showed the benefit to society was greater than the risk posed by the financial impact on the poorest in our society, and it is the reason why I am supporting this.

Tax has two purposes: the first is to raise money, and the second is to influence behaviour. The main purpose of this is no doubt to influence behaviour. We want people in this country to stop smoking, and we need to send a very, very clear signal that smoking is no longer cool. I think this message is getting across the developed world, in fact. So when John Travolta lights up on television, that is no longer cool; that is exceptionally uncool. We need to send that signal around the image, as well.

But there are a number of academic studies that show that this is the right thing to do, i.e. increase excise tax. Professor Beaglehole and Professor Wilson had a very interesting paper that showed that the increases in excise tax are actually having a diminishing impact, because what we are left with at the moment is that those who were going to give up smoking, with the 2010 and 2012 increases, actually did. We are now left with the real hard-doers—those in society whose addiction is incredibly real, and is very powerful. This is why I would like to see this tax hypothecated, and by that I mean the money raised from this tax, the $425 million raised from this tax, go directly to the health budget. Certainly, what a number of the papers say is that with the money raised it is imperative that it actually goes towards smoking cessation programmes, to really help those who need help.

As mentioned in my first speech, this is a very powerful addiction. I have read that an addiction to nicotine is actually more powerful than an addiction to heroin. So let us not kid ourselves that, just because the price goes up, people will go cold turkey the next day. They will not. They need help, and we must provide them with that help.

Another large international study on the effectiveness of tax and price policies for tobacco control was undertaken by the International Agency for Research on Cancer to evaluate the strength of available evidence across 18 countries on the effects of tax and price policies to prevent and reduce tobacco use. The actual name of the study was Effectiveness of Tax and Price Policies for Tobacco Control. The conclusion was based on extensive evidence reviewed. The recommendation was that “To improve public health by reducing tobacco use, governments should adopt relatively simple tobacco excise tax structures that emphasize specific taxes and that include regular tax increases that outpace growth in general price levels and incomes.” But what it also, again, reiterated was that Governments should use tax revenues “to fund comprehensive tobacco control programs and other health promotion activities”, given that such programmes lead to further reductions in tobacco use.

So it was with slight concern that I did hear the Associate Minister of Health the Hon Peseta Sam Lotu-Iiga stand up and say that the money raised from this would go towards hip operations and knee operations. There is no doubt that we need further spending in the health sector, and Ms King has highlighted this a number of times. But what I would have really liked Mr Lotu-Iiga to do, and to work with Dr Coleman, is to say: “Hey, we’re going to raise $425 million. Let’s put aside $100 million or $50 million, or let’s do some studies to really address this problem. We need to put aside a certain amount of money, and go out to the public and say that we understand the pain that a number of people are going to go through. As a consequence of that, I’m now putting aside $50 million that will increase the size of the Quitline programme or increase funding for a number of smoking cessation programmes by 100 percent, or 200 percent, or 300 percent.”

There are a number of researchers in this country who understand this and understand the magnitude of the problem, but who also understand what needs to be done to address this problem and help those who are suffering from a nicotine addiction. I think if the Associate Minister of Health the Hon Peseta Sam Lotu-Iiga worked very closely with the Minister of Health they could come up with a really innovative programme to drive the country towards the 2025 target of being smoke-free.

A 1997 study showed that as costs increase, smoking becomes less attainable and less attractive to a potential new generation. Louisa Wall actually talked about this. The number of young people who have smoked is horrendous. So not only do we need to target education programmes or help to those who are trying to quit smoking, I believe we also need to undertake a new, radical, and hard-hitting education programme to those in schools. We have got to start with the young people, and say: “Hey, you know what? This is what smoking can do to you.” Let us get not just at those who are buying the packets with the ugly pictures on the back; let us go to the really young ones and say to them: “You know what? You want to be a cool rugby player? You want to be a star netballer? You want to do well at school? You want to live a good, healthy life? This is what smoking does to you—it kills you.”

That sounds pretty melodramatic, I must admit, but the evidence is absolutely overwhelming: smoking kills. We need to get that message out there, not only to those who are engaging in the habit at this point in time, but also to young people so they are not even tempted to start. The interesting thing is, with all due respect to Louisa Wall, she said she tried a cigarette due to peer pressure. We have got to change that whole model round so peer pressure is now about how it is incredibly uncool to smoke—do not start. That is the message we need to send out there. We are supporting this bill. We do think the excise tax needs to be substantially higher, as indicated by a number of researchers in this country, but it is a start. Thank you very much.

Kia ora. I am actually really pleased to follow my colleague Stuart Nash in taking a call, because he and I are 100 percent on the same page in regard to this, the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill, and its implications, particularly for young New Zealanders.

I have a submission to the Budget Policy Statement that was presented by Warren Lindberg, who is the chief executive officer of the Public Health Association, with regard to the tobacco excise and what the tax take should be spent on. I just want to outline the initiatives he thought should be prioritised, given our focus on making New Zealand smoke-free by 2025. The initiatives are: targeted health promotion and cessation services for young people; targeted health promotion and cessation services for Māori, particularly young Māori women; targeted health promotion and cessation services for pregnant women and their families/whānau; funding post-birth cessation services support for up to 2 years following, so that mothers and those around them can sustain cessation, which would provide the maximum health gains for the parents and for all New Zealand babies; and research into effective cessation and effective tobacco policy for New Zealand, including targeted surveys of tobacco use among vulnerable communities and populations.

One of the references in that submission was to the Action on Smoking and Health (ASH) Year 10 Snapshot Study. The overall philosophy or principal position that this particular survey articulates in its results is this: quitting is hard and protecting children from the addiction of smoking in the first place is best. I think that makes sense to all of us but, as I outlined earlier, within the context of 66 percent of our young people trying smoking and, of those, 50 percent of them then smoking for 40 years and dying premature deaths—and we have talked about some of the consequences—I absolutely agree with Stuart Nash that we should be doing everything we can to stop our kids smoking in the first place.

One of the biggest challenges we have with that, and this is where it gets really interesting, is that when children grow up in a family where one parent smokes, they are actually 25 percent—the research is really interesting. It says if you are a young person and you grow up in a family where both of your parents smoke, if one of them gives up smoking there is a 25 percent reduction in the likelihood of you smoking. If both parents give up, there is a 39 percent reduction in the likelihood of you smoking. Basically, if you grow up in a family where people smoke or if you see it, then, actually, the statistics are against your ability to be resilient enough to not smoke. That is where it is kind of a chicken-and-egg problem. We want to focus on the kids, but, actually, to focus on the kids and prevent them smoking in the first place, we have to help their parents and we have to stop the parents from smoking in the first place. What we know is that on average it takes seven attempts for someone who smokes to give up. It is an incredibly hard thing to do because of the addiction.

I know this because I grew up in a household in which my father smoked two packets of cigarettes every day—Winfield Reds. He chain-smoked, and that has had a devastating consequence on my family. He died when he was 63. He had a heart attack. He had cardiovascular disease, which is one of the outcomes of smoking for over 30 years. I think it was lucky he did not quite make—oh, he was 63 and started in his 20s, so he was the 40-year smoker.

The other thing I find really interesting is who supplies young people. Actually, the people who supply young people are their parents—40 percent of young people who smoke are supplied by their parents and their immediate family. Another 40 percent are supplied by their peer group and those who are engaged in a peer group with older people, who can go into the dairies and buy those cigarettes themselves. But, actually, 18 percent of them get away with buying cigarettes themselves, so we actually have a problem with the enforcement of the legislation that says that if you are under 18, we cannot sell to you, and if someone does, they will now be fined $5,000. Actually, that fine is good, because there should now be more of an incentive for anyone who sells cigarettes to be super vigilant in making sure young people do not have access to tobacco.

I did a little bit of maths—this is for Minister Lotu-Iiga, because we know he will be almost successful in reaching the under 5 percent target for Māori women—based on the statistics that I have managed to find in this 2014 ASH Year 10 Snapshot Survey. What it says is that for 14- and 15-year-old Māori girls, who are three times more likely to smoke daily, the statistics between 2013 and 2014 saw a 30 percent reduction in the daily smoking rate and a 7.6 percent reduction in the regular smoking rate. If I apply the 4 years of this piece of legislation, then at the end of 2020, I think, when we will realise the fruition of this legislation, the daily smoking rate for Māori girls aged between 14 and 15 will go from 8.8 percent to 5.05 percent, so we will nearly get there. The regular rate for that age cohort will go from 16.76 percent to 12.22 percent.

I think therein lie some of the suggestions from the researchers—that 10 percent is a good step, but it is too passive. It should be 20 percent, if we want to accelerate the reduction. But I think that after this legislation has been fully realised there will be an ability for the House to then renegotiate whether it should continue, and at what rate, because we will then be seriously getting down to the hard-to-reach communities where, actually, the ability for our health system to engage with those people—and I want to pick up on what my colleague Fletcher Tabuteau said. He is right: the people who are most affected are the most impoverished. They are the ones who come from communities where the access to public health services is not as it should be. So how do we get to those families? How do we help those people? How do we ensure that they can be smoke-free? I think that will be the challenge as we look at how effective this piece of legislation is, in the future. It is only one part of the solution.

I think that if we were genuinely wanting New Zealand to be smoke-free, we would care about the people who are most affected by cigarettes and actually ensure that they have all the services they need, all the tools they need, and all the support they need over whatever period of time it takes them to finally realise that smoke-free aspiration—to be supported. For my father, in the end, it was going to a hypnotist. It worked for him. It took him a long time and it took him many attempts, but, eventually, he found a tool that worked and he was able to be smoke-free. Unfortunately, it did not erase the 25 years of his smoking beforehand, and that is what I regret the most. But through pieces of legislation like this, we will start to actually impact on the mortality rates and how long it is anticipated some of us will live for. I commend this bill to the House, and I again just want to say congratulations to the Minister, but there is so much more to be done. Thank you.