How will adding 1.6 billion to our health bill get NZ back on track?

PAT PILCHER finds it hard to see the financial logic or a moral mettle in the government’s rush to dismantle the Smoke-Free legislation.

Alongside the media signalling the prolonged birth of a government out of the ungainly coalition between National, Act and NZ First, many policy compromises were also announced. One of the least popular changes announced by the coalition has been the repeal of smoke-free legislation put in place by the previous Government.

The move has been met with considerable dismay and little media coverage. Politics aside, the move makes me incredibly angry. Having watched a family member die an incredibly painful and prolonged death from emphysema, I find it beyond boggling that any government would throw out any laws preventing tobacco-related deaths and illnesses.

Under the Labour government, smoke-free legislation provided a comprehensive control strategy to reduce the number of smokers in NZ. The act aimed to reduce people’s exposure to second-hand smoke by making some areas smoke-free. The Labour government adopted a long-term view and put in place a sinking lid policy that saw the age of purchase for tobacco and vaping products raised to 18 years. Under the Smoke-Free laws, tobacco could not be sold to anyone born on or after January 1, 2009. This effectively created a lifetime ban on young people buying cigarettes. The minimum age for buying cigarettes was set to steadily increase, so someone buying cigarettes 50 years from now would need to prove they were at least 63 years old. While this might sound draconian to some, the net effect would have been a steady reduction in the number of smokers in New Zealand.

However, the National-led coalition has signalled that they plan to repeal the laws curbing tobacco sales. This will include scrapping the ban on tobacco sales to people born after 2008 and reducing the number of retail outlets allowed to sell cigarettes.

How this move fits with the National Party’s “Getting NZ back on track” election slogan is beyond me. Unless you’ve been living in a cave with no internet access for the past decade, you’re probably already aware of the massive challenges facing New Zealand’s public health sector. Funding is a growing issue as hospitals groan under the sheer weight of meeting health goals. The seriousness of this cannot be overstated, and even the Treasury has said that they believe current tax settings may not provide sustainable funding for the health system.

Set against this backdrop and the looming health-related carnage resulting from repealing smoke-free laws, the sheer idiocy of the coalition’s first real act becomes blatantly apparent when the numbers resulting from their decision are examined.

The cost of smoking-related illness and deaths to New Zealand’s health sector is massive. Ongoing tobacco tax increases from 2011 to 2031 were estimated to have resulted in substantial net health system cost savings, with these savings set to peak at around NZ$160 million per year in 2061. Current numbers sourced from within the Ministry of Health suggest that the cost to the health system of smoking might already be as high as $1 to $1.6 billion annually. Incredibly, about one in five deaths in New Zealand is directly attributable to smoking.

In short, the coalition’s decision will see the health system go from projected long-term annual savings of $160 million to spending billions, all because the coalition had an ideological brain fart instead of thinking about the bigger picture.

This seems incredibly cold, even for National, whose party spokesperson, Nicola Willis, seems more concerned about delivering on tax cuts than helping an already struggling health sector and saving lives. Willis was quoted by NewsHub as saying, “Coming back to those extra sources of revenue and other savings areas that will help us to fund the tax reduction, we have to remember that the changes to the smoke-free legislation had a significant impact on the Government books – with about $1 billion there.”

Incredibly, the act echoed these sentiments on NewsHub Nation when incoming Regulation Minister David Seymour said smoke-free laws could force tobacco onto the black market and that tobacco is an income source for the Government.

Clearly, hard questions need to be asked. How will the extra costs of smoking-related illnesses be funded? What impact will this have on waiting lists and other less obvious (but still vital) parts of New Zealand’s Health system?

Perhaps, and most critically of all, people need to ask the coalition why this senseless decision was made in the first place. Was it made purely on ideological grounds, or did the tobacco industry, facing a bleak future under Smoke-Free laws, benefit from potential campaign donations to the coalition parties? Incredibly, the Global Tobacco Industry Interference Index 2021 notes, “There is no legislation specifically prohibiting the tobacco industry from donating to political parties, candidates, or campaigns and lobbyists”. They also note that “there are no retired or current government officials identified as holding positions in the tobacco business; a current Member of Parliament (MP) used to work for the tobacco industry”.