Smoking's a Government scam

RICHARD SWAINSON
Last updated 14:21 05/06/2012

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Richard Swainson

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OPINION: Treasury reports are not known for their amusement value.

It came as a pleasant surprise therefore to read accounts last week of that department's research into the monetary cost of smoking.

The eggheads and bean-counters have determined that nicotine addicts are no longer a financial drag on the rest of us.

It's a triumph of user-pays profound enough to get Roger Douglas himself out of retirement.

Apparently the amount of revenue generated by smokers is $1.3 billion per annum.

After do-gooder Tariana Turia has worked her budget magic that figure will climb to $1.7 billion. This compares favourably with $350 million, the upper end estimate that an Otago University study claimed in 2007 reflected smokers' direct drain on the national coffers.

Given that smokers die earlier than non-smokers, thus saving the state vast sums in superannuation and elderly care, the differential between what they pay for and what they get is even larger than this comparison suggests.

In Treasury-speak the conclusions are obvious: "When the broader fiscal impacts of smoking are considered ... smokers are probably already `paying their way' in narrowly fiscal terms."

It must take a peculiarly blinkered, anti-human mind to reduce the complexities of vice and addiction – not to mention the intangible pleasures of tobacco – to a dollars and cents equation. However, whatever side of the cigarette debate you are on the figures provide food for thought.

The Treasury report did not go far enough.

I'm no economist but it does seem transparent from a financial point of view that every political party from Turia and her kill-joy Maori Party to even the libertarian-inclined ACT ideologues are on the wrong track when it comes to smoking.

They seem to be labouring under the misapprehension that it's a bad thing. In fact, it's the best scam that the Government has going for it, a magnificent cash cow that just keeps on giving. In the words of our financial overlords tobacco tax is "very efficient" in raising revenue because nicotine addicts have to feed their habit no matter what the price.

John Key and Bill English put a lot of stock in running a sensible, fiscally sound administration but they have clearly missed a trick or two on the smoking issue.

Under the influence of their indigenous coalition partners they are in grave danger of making mistakes in both tactics and strategy. Putting the price of ciggies up to $20 a packet may result in a black market, a scenario in which the benefits of addiction are reduced to mere lung cancer and premature death.

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A long-term plan of criminalising tobacco would be even worse, killing the golden goose.

Given that the country is in huge debt, borrowing vast sums to sustain itself and with an ageing population facing an even worse scenario in the near future, I think we need to encourage more smoking, not less.

The upside is clear: on the one hand, a guaranteed income stream and on the other a lessening in pension bills and rest-home subsidies.There must be an optimum price for cigarettes, one that both ensures current smokers maximise their usage and encourages potential addicts to take up the habit.

I suspect that this cost is a lot lower than that enjoyed currently.

Basic Keynesian economics suggests that if you reduce the price of something you can realise greater profits. This is the logic that must be employed.

Ideally, cigarette smoking should be taught at primary schools. To date children from smoking households have enjoyed an unfair advantage, breathing second-hand fumes and potentially modelling themselves on addicted parents. The Government needs to change the junior curriculum to correct this imbalance, creating a level smoking field.

It is also vital that disease be allowed sufficient time to develop within the addict's body. It would be naive to assume, though, that in every case death will come before retirement age. Cuts in health care and punitive treatment of smokers in hospitals may also be necessary to achieve the maximum number of fatalities.

A responsible government would take Treasury advice about smoking seriously.

It is every New Zealander's birthright to kill herself or himself in as profitable a manner as possible.

- Waikato Times

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