Notes that New Zealand First Minister Casey Costello sent to health officials on reforming smoke free laws make it clear that a proposed freeze on excise tax for tobacco came from her office.

The notes, which have been obtained by RNZ, also include proposals for more tax breaks for the tobacco industry, including no excise tax on tobacco products that are heated rather than burned.

Costello has attempted to distance herself from the notes, however, saying they “were not my proposals or notes”. But her office won’t say who wrote them, only that it was “existing material” she sent.

The Associate Health Minister has been under fire in Parliament after telling RNZ she had not sought advice on freezing the excise on cigarettes for three years, despite a Health Ministry document saying she had.

“I’ve had no discussions on that at all. It’s not even something I specifically sought advice on,” Costello said to RNZ when it first broke the story. “I haven’t looked at a freeze on the excise at all.”

Her explanation about the conflict between her statements to RNZ and the content of the Health Ministry documents has been that she was merely requesting a range of advice on issues in her portfolio.

“I was asked a specific question about whether I had sought specific advice on the excise tax issue,” Costello said this week.

“I hadn’t sought specific advice, it was just one of the components in a broad range of things and in that specific area it was just asking about the implications if we looked at it.”

But the notes Costello sent to the Health Ministry in mid-December 2023, as she sought to develop her tobacco and vaping plan, suggest that freezing the excise on smoked tobacco originated with her.

Under a heading, ‘Smoking’, the document states: “Freeze the excise rates on smoked tobacco for three years starting 31 December 2023.”

On the same page of the document are proposals for additional tax breaks for cigarettes, this time for products that contain lower levels of nicotine.

“Zero rate less addictive smoked tobacco for excise if it contains 0.8mg/gram of nicotine,” it says in the material that Costello provided to health officials.

In a written statement this afternoon, Costello continued to insist she had not asked for the advice.

Instead, she said they were “not things I had written”.

“I have been honest in what I have said,” Costello said.

“They were not my proposals or notes — they were not things I had written and it is misleading and wrong to characterise them in that way. This was general information I had provided officials and I’m sure they can verify this.

“I want to build on what has worked to reduce smoking rates recently, including proving vaping as a tool, and any other practical steps to help those people who currently smoke and are addicted to nicotine, to quit.”

RNZ sought clarification on what Costello meant in saying these were not things she had written. When RNZ asked a spokesman for the minister who did write the notes he said it was “existing material”.

Asked whether Costello was the one who collated the existing material he said “I think so”, but that he was not sure.

‘As harmful as caffeine’ – claim about nicotine sent by Associate Minister of Health to officials

In the notes, the harm from nicotine is compared to the harm from coffee.

“Nicotine is as harmful as caffeine but its association with smoking has seen the poorest punished by huge taxes as they make up 64% of daily smokers. This is why getting smokers onto vaping matters because it’s the number one reason why smoking has collapsed.”

The notes also pushed the case for zero excise rates for heated tobacco products, where tobacco is heated to a vapour rather than burned.

“Remove the tobacco excise off less harmful smokeless tobacco products,” the document suggests.

That policy would make heated tobacco products, such as the Philip Morris product IQOS, less expensive, assuming the industry passed that tax break on to consumers.

The notes made the case that the tobacco industry itself is in real financial trouble.

“The tobacco industry in New Zealand is on its knees thanks to the decline in smoking from vaping. The message to everyone is the way to kill big tobacco is with vaping because this has not come from mandates but from the most effective thing of all, a better, safer and less expensive alternative.”

The new government has promised to scrap the Labour government’s attempts to create a smoke-free generation by banning the sale of tobacco to anyone born on or after January 1, 2009.

The notes attacked Labour’s record.

“Labour tinkered around the edges and made a mess of our smoke free laws. They were going to put small business owners up and down the country out of business,” it says.

“The policies were ideological nonsense that no other country had been stupid enough to implement. Labour was wanting to treat New Zealanders as guinea pigs in their radical policy experiment.”

Smokers were being harshly punished, particularly the poor.

“Our tobacco control measures have had broad and unintended consequences. It has ripped billions of dollars from the poorests and has made many to feel isolated from their communities,” the notes say. “We need to treat this for what it is, an addiction, not punish people for it, but help them out of it.”

The notes Costello provided to the ministry also pushed the case for dairies and other convenience stores to market vapes. “Recognise dairies, petrol stations and supermarkets are responsible sellers by allowing them to continue selling the three regulated vape flavours while enabling them to market vapes to smokers whenever cigarettes are requested for purchase.”

The document also argues there shouldn’t be a reduction in the number of retailers selling tobacco. “This too will just lead to the gangs selling cigarettes. We support small business for whom cigarettes are a major source of income.”

It is unclear who “we” is referring to as Costello has not said who the author of the document was.

The retailer reduction would be unfair to smokers, it says.

“Unfair on those without access to transport or those who are disabled. Yet more costs for smokers.”

PM Luxon responds

Prime Minister Christopher Luxon was asked about the notes on Thursday afternoon as the story broke on RNZ.

He said the Government increased excise tax on cigarettes in December.

He repeated his earlier stance that Costello was determined to reduce smoking rates.

“I’ve spoken to her about it, she’s passionate about it, she cares about it, I’ve got confidence that she wants to do that,” he said.

“She maybe asked for a broad range of advice and feedback [from officials]… all I can tell you is excise tax has gone up, it’s been implemented, it’s happening.”

Asked if Costello was the right person to be in charge of reducing rates of smoking, he said the Government’s smokefree position was being “very poorly misrepresented”.

The existing legislation had seen daily smoking rates fall from 16.7 a decade ago to 8.6 and then fall another two points.

Pressed again on Costello’s role, all Luxon would say was she was very determined to help the 6.8 per cent of Kiwis who were still daily smokers.

“We know it gets harder, but she’s asking for advice on education… She’s very determined to reduce smoking rates across New Zealand.”

He said he was not responsible for every request a minister made.

“I’m clear about the priorities I’m asking them to deliver. I’m clear about the delegation. I’ve been very clear about that, probably more clear than any previous prime minister.”

By Guyon Espiner of rnz.co.nz

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