By Dan Satherley
Scientists and health experts have backed the Government's move to radically increase excise tax on tobacco over the next four years.
In yesterday's Budget, Finance Minister Bill English announced yearly 10 percent tax increases on tobacco, which will eventually push the price of a pack of 20 over $20.
Prof Janet Hoek of the Department of Marketing at University of Otago said there is strong evidence linking price increases to decreased consumption.
"Consumers are more responsive to price than they are to any other marketing intervention," she told the Science Media Centre.
"We know that most smokers regret the fact they started smoking and would like to be smokefree. A tax increase will stimulate many of these people to make a quit attempt and successfully become smokefree."
Yesterday Imperial Tobacco claimed the country's tobacco black market would grow as a result of the increases.
“The government could shoot itself in the foot with this policy decision by creating a lucrative black market for tobacco," said corporate affairs manager Cathy Edwards.
"This could eventually cause the Government to lose revenue if the illicit market gets a foothold here, as it has in Australia."
Prof Hoek rejected Imperial Tobacco's claims.
"I know tobacco companies have suggested black markets will emerge in response to other policies but I have never seen any evidence to support these claims," she says.
"I understand from colleagues that homegrown tobacco is not particularly palatable."
Dr George Thomson of the University of Otago's Department of Public Health says price increases are an effective way of reducing smoking in low-income groups and youth.
He also says studies show decreases in life expectancy caused by financial hardship due to tobacco taxation is "orders of magnitude smaller than the harm from smoking".
"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."
Dr Thomson says the next steps should be ensuring there is a minimum price per pack of smokes (so youth can't be lured in with loss-leading cheap brands), reduced retail availability and the removal of flavours, enhancers and additives, making smoking less palatable.
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