Oral Questions for 16 July 2025
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RNZ News
13 minutes ago
- RNZ News
A tobacco product tax cut slated for one year has been extended by two
NZ First's Casey Costello is the minister responsible for tobacco policy. Photo: VNP / Louis Collins The tax break for Heated Tobacco Products (HTPs) made by Phillip Morris has been extended for an extra two years. In July 2024, the government cut the tax on HTPs in half , in what it said would be a one-year trial subject to an evaluation. But NZ First Associate Health Minister Casey Costello told RNZ the evaluation would now be done in July 2027 and the reduced tax rate would apply to HTPs at least until then. Labour's health spokesperson Ayesha Verrall said the extension of the tax cut was striking, given the strain on the health system. "This government has the wrong priorities. It is giving tax breaks to tobacco companies now valued at over $300 million and the evaluation they promised, to check that it was helpful, is a total sham." Costello cut the HTP tax rate by 50 percent last year, with the aim that cheaper prices may encourage people to switch from cigarettes to HTPs. The cut was made despite health officials telling Costello there was no evidence HTPs worked to stop people smoking or were significantly safer than cigarettes . Costello told Cabinet she had her own "independent advice" which, when she released it later, turned out to be five articles that were either about different products, outdated, or offered only weak support for her view. Treasury said Philip Morris had a monopoly in the HTP market in New Zealand and would be the main beneficiary of the move. Costello's office told RNZ the tax cut trial would be extended because Philip Morris had to pull its IQOS device from sale last year , as it did not comply with requirements for vaping devices to have a removable battery. Last week, Costello ditched the requirement for removable batteries, saying Cabinet was advised this was the best way to resolve legal action from Mason Corporation, which owns the Shosha vape store chain. A spokesman for the Minister said with HTPs off the market for months last year, the original plan for an evaluation after one year did not make sense. "There wasn't an evaluation because of the withdrawal of HTPs from the market. Any report back would be meaningless as the cheaper HTPs were only available for two months," the spokesman said. "Cabinet agreed to extending the HTP review to July 2027 as there will be more market data available." The spokesman said the evaluation would then be able to show whether "a sustained price reduction encouraged uptake by smokers" and if it had helped reduce smoking. The assessment would also look at whether HTP use "encouraged smokers away from vapes" and the extent of "unintended uptake by young people". A March 2025 Ministry of Health (MOH) briefing to Costello, focused on how to evaluate the HTP tax cut, said Philip Morris had not initially passed on the excise reduction to consumers. "There was no price change passed through to customers for the first month, though this is an observation of value in and of itself," the MOH said. The briefing, obtained by RNZ under the Official Information Act, said Philip Morris had to pull its IQOS device just three months into the tax cut trial. "All HTP devices were removed from the market in New Zealand due to not meeting new safety regulations. This has meant there have been no HTP devices available for purchase for at least 5 months of the 12-month trial period." Costello has said that HTPs "have a similar risk profile to vapes", but officials from Treasury and Ministry of Health advised her they were much more harmful than vaping. In its March briefing, the MOH told Costello it would be difficult to assess whether people using HTPs had decreased their harm or not. "While we will be able to assess whether the percentage of current or recent smokers who use HTPs increases, we will not be able to track whether those same people were previously using, or likely to use vapes, for example, whether they moved from a safer alternate product to a more harmful one." Verrall said the onus should be on Philip Morris to prove its product was safe. "There is no reason why the government should be running a study for Philip Morris to help get its products used," she said. "This product is not a health product. It is a harmful product." Verrall said the latest update from the Treasury showed the HTP tax cut was forecast to cost up to $293 million if continued until 2029. "It's deeply worrying when our health system is underfunded that the government is giving away $300 million to the benefit of a single company with links to one of the coalition partners," Verrall said. The extension of the tax break for the Philip Morris products comes after RNZ published documents alleging a close relationship between NZ First and the tobacco giant . The documents, released in litigation against US vaping company JUUL, allege Philip Morris pitched draft legislation to NZ First as part of a lobbying campaign for its HTPs. The documents claim Philip Morris corporate affairs staff "reached out to NZ First to try and secure regulation to advantage IQOS". A lobbying firm advising JUUL claimed that NZ First leader Winston Peters had a relationship with Philip Morris and also that "any regulation he champions is likely to be very industry friendly and highly geared towards commercial interests in the sector". Peters did not address the allegations that NZ First received material from Philip Morris, but said RNZ's story was a "tissue of baseless accusations" and that engagement with the tobacco industry was legitimate. "Multiple government departments have themselves proactively reached out to, and met with, 'big tobacco' for direct feedback and advice on tobacco legislation," he said, in a post on X. Health Coalition Aotearoa and Vape-Free Kids want Prime Minister Christopher Luxon to strip NZ First of the tobacco and vaping portfolio but he says Costello is doing a great job. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.


NZ Herald
13 minutes ago
- NZ Herald
How do we fix NZ's "broken" energy sector?
NZ First leader Winston Peters on the Government's new Parent Boost Visa He stressed the need for the migrants to pay their own costs and not rely on the taxpayer. Video / Mark Mitchell


NZ Herald
13 minutes ago
- NZ Herald
Letters: It's time to remove GST from food products to relieve the cost of living
A son living in Sydney was shocked to see my $230 grocery docket was because of 15% GST. We could do a lot with $30. Sharon Marks, Te Aroha. What about raising wages? You can imagine the shock when I read Fran O'Sullivan in Saturday's Herald advocating that the Government could resolve the butter cost crisis by removing the GST from it. As I recall, not so long ago, fellow commentators from the business community, and ultimately voters, roundly condemned Labour's policy initiative of proposing a GST cut on food items. Instead of regurgitating failed policy initiatives, a more practical initiative from business commentators on aiding a resolution to the cost of living crisis would be to oppose the cutting of wages as we have seen with the trashing of pay equity and, as the Saturday Herald also reported, the dumping of pay parity for early childhood workers. Business leaders such as O'Sullivan would do better to campaign against New Zealand's further rapid decline into the low-wage economy that this coalition Government is hell bent on. Then, despite the GST, the price of butter would be way more affordable. Neil Anderson, Algies Bay. I have a dream . . . I have a dream in which I see Christopher Luxon leap to his feet in Parliament. He calls a halt to proceedings for an 'extraordinary' announcement. 'Let's stop talking about the price of butter,' he says, and thumps his desk. 'Instead, let's talk about the children who are starving to death in Gaza.' Next, he summons the Israeli ambassador to his office and demands instant action to allow food into Gaza. His passionate language earns New Zealand headlines around the world. Why not? New Zealand could once again be the mouse that roars. Shaking the world to its senses. We need to give this matter urgency, because children are dying every day. It's futile to debate who is right or wrong, Israel or Hamas. Just act on behalf of the innocent children caught in the middle. While we watch. John Harris, Herne Bay. Passport change is truly pathetic With everything going on in the world, we also have the continual pettiness of this Government with their obvious agenda to wipe much of our indigenous people's culture off the map. Their latest effort - to change the cover of a New Zealand passport - is truly pathetic. My New Zealand passport is due for renewal next year and I will be renewing it while I can still have one with Aotearoa above the 'New Zealand' part on the cover. I want to be part of a society that embraces different cultures, not one that wants to be beige and boring. The good news is, with the many faux pas this motley crew keep making, I doubt if we'll see them re-elected. Unfortunately, the many backflips mean that whoever gets in next will spend far too long wasting their time sorting the mess out. J. A. Wallis, Blockhouse Bay. I agree with Peters Thank you for the piece in the Herald (July 27) about 'Careless immigration'. I totally agree with Winston Peters and his comparison of New Zealand and the immigration crisis in Europe. This is a crisis, we need someone to stand up and tell the truth, as Winston does. Personally, I am terrified by what is happening in the United Kingdom. If nobody makes a stand, New Zealand will sink as the UK currently is doing. It is offensive to ignore your own people. The riots have started in the UK. How long before we follow suit? Fiona Helleur, Milford. And so do I As an immigrant myself to New Zealand, I agree with Winston Peters 100%. To all those bleeding hearts, do-gooders and social engineers, take a trip to Europe or America and see the mess, crime and lowering of standards. And if you are keen to know more, speak to the locals about their feelings. In some cities, you would not believe your eyes that you are actually in Europe. I hope Peters is not a 'lone voice in the wilderness'. Ashley Mall, Mt Albert.