Casey Costello: Associate Health Minister on the Government setting $216 million aside to fund tobacco product tax cuts

The Associate Health Minister says the $216 million set aside to fund tax cuts for tobacco products is unlikely to end up costing that much.

The Government has implemented a 50 percent cut to the excise tax on heated tobacco products - which are viewed as an alternative to vaping and traditional cigarettes.

Minister Casey Costello says the modelling had been based on Japan's use of heated tobacco products, which wouldn't match New Zealand.

"To put some perspective - we're talking about, in total, smokeless tobacco products in 2023 was about $6 million worth of excise. HTP is only a small component of that."

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
So the government has agreed to set aside two hundred
and sixteen million dollars because it may need that money
to pay for the tax cuts for heated tobacco products
otherwise known as htps. Now htps is a new thing
where the tobacco is heated to a vapor rather than burnt,
so no oil, there is tobacco, it's heated to a

(00:23):
vapor rather than burnt and then ingested. So earlier this month,
the government announced a fifty percent cut to the excise
tax on the heated tobacco products, which are seen as
an alternative to vaping and regular cigarettes. They're good for
cessation of tobacco use, they say. Cabinet agreed that they're
likely to go be there's likely to be a huge
uptake of these products, so much so that they had

(00:44):
to put aside two hundred and sixteen million dollars in
four gone tax income over the next four years. So
Casey Costello is the Associate Health Minister and Customers Minister
and joins in our hell. Casey, Hi, how are you good? Gee?
That two hundred and sixteen million dollars is pretty big
and you know it presumes a big uptake. Do you
believe that's going to happen.

Speaker 2 (01:06):
No, And it was based upon the Treasury did some modeling.
They use Japan's figures as a benchmark to apply it
to Pen doesn't have vaping, so that's why the modeling
wasn't particularly helpful. So I think to put some perspectives,
we're talking about in total smokeless tobacco products in twenty

(01:26):
twenty three was about six million dollars worth of egg size.
That's that HTP is only a small component of that,
So we're talking about a small number we're hoping of
the two hundred and eighty five thousand people that are
still smoking.

Speaker 1 (01:42):
Are you just presuming though the people on vapes aren't
going to go for htps because they're so happy with vapes.
But even so, this is actually a tobacco product, and
they might be saying to themselves, I'm missing the tobacco product,
you know, and this apparently is still good for me.
Do you think they're going to stay loyal to the
vapes and not go to the HB.

Speaker 2 (01:59):
I think boats will remain shaper, which is the other component,
But there's no excize on boats at all, so it
still remains a price differentials. Okay, So, and I think
I think that's what's really helpful is to get some
perspective around us. This is to try and deal with
those who are hard core addicted smokers who don't want
to take up vaping.

Speaker 1 (02:18):
Here's a question for you. Then here's a question. Then
if you do not believe it's true, why did cabinet
and all your good colleagues agree to putting aside two
hundred and sixteen million dollars.

Speaker 2 (02:32):
So this is over a four year period, and it's
a projection of what might be forgone. So it's not
money we have and we're not you know, we're not
spending or anything. This is just a projection of what
it's going to cost. Hopefully it will well, it won't
be anywhere near thats aga.

Speaker 1 (02:50):
I don't know if you've heard Mike hustling this morning,
and he looked at that cabinet paper, and that cabinet
paper reckons it's seven two hundred people will quit smoking
in start on these alternative products and still and then
he freaked out because that means it's going to cost
eight thousand dollars each to the taxpayer to pay for
each one of those two hundred people.

Speaker 2 (03:07):
Yeah, and it's yeah, it's I think it's it's kind
of false economy because you're talking about it fits money.
This is about providing an alternative. We're doing a twelve
month trial to see if it impacts. If there is
take up a meeting next month with all the quick
smoking providers to talk to them about how we're going

(03:28):
to measure this and how how they sing uptake will be.
It is less harmful. It is an opportunity to get
those that are hardcore smokers to stop smoking, and that's
what we're focused on.

Speaker 1 (03:39):
Right The fifty percent cut to the excise tax will
make htps, which are mainly marketed by tobacco companies, a
lot cheaper. Now you have to wonder, are you making
this change as a favor to tobacco companies to give
them a replacement product as we get rid of cigarettes,
or are you actually truly trying to do this to
get smoke is too.

Speaker 2 (04:00):
Quit and it's just such a distracting narrative. I have
absolutely no relationship with tobacco, never met with them. I
have no concern about what tobacco industry is doing. I
have absolutely targeted to help people quit smoking and that's
the goal and objective. I want people to not smoke

(04:23):
at all, and everything I'm doing is to try and
focus on that target. And this noise and distraction that's
been thrown around. I have absolutely beyond. I have been
scrutinized beyond anybody that I know of around any possible connection.
There has been no connection between me and the tobacco industry.

(04:43):
I have met all my obligations around conflicts of interest.
I am focused on getting people to quit smoking, and
that's my target.

Speaker 1 (04:51):
Now. A lot of talk about the vapes, people start going,
are they really as a good tobacco cessation product? As
they say that there's an awful a lot of respiratory stuff, popcorn,
lung all that sort of thing. Do you believe these
htps are in fact going to be an awful lot
less harmful to smokers?

Speaker 2 (05:10):
They are definitely a lot less harmful. That's what we know.
Because the carcinogenic of smoking is the burning of the tobacco.
It's that combustion that is the big issue. Now, that
doesn't mean there isn't other risks of cancers around oral
tobacco products. And that's the whole thing we're going to
look at as a separate discussion. We know with vaping,

(05:33):
two hundred and thirty thousand people quit smoking over the
last three years, so we know vaping has been a
really good tool get people to stop smoking. But it's
not safe and we know that we know that there
are health issues around it, but it's a lot safer
than smoking, and that's why we're looking at other products
that might help those who who haven't been successful for

(05:57):
disvesting products and that's what we've poken.

Speaker 1 (06:00):
Okasey Concilla, I thank you very much for your time today,
Casey of course as the Associate Health Minister and the
customers Minister. And that is the trick. If you give
up smoking and start vaping, the idea is then to
move on and give up the vaping too, if you
really want to live a long and healthy life.

Speaker 2 (06:16):
For more from Hither Duplessy Alan Drive, listen live to
news talks it'd be from four pm weekdays, or follow
the podcast on iHeartRadio.