Lower Kiwi tobacco duty free limit yields ‘results’ – and questions

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Martin Moodie
Martin Moodie is the Founder & Chairman of The Moodie Report.

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1) The facts.

New Zealand Customs Minister Nicky Wagner says Customs has destroyed over 2.5 tonnes of abandoned tobacco and collected NZ$1.35 million in additional duty and taxes since the drop in duty free allowances from 250 sticks to 50 last November.

2) The spin.

“People seem to be learning about the change,” Ms Wagner said in a government press release. “The amount of tobacco abandoned at airports by those not wanting to pay duty is dropping from the 100 kilograms Customs was initially collecting every week.

“The change was well signalled in advance and advertising to highlight the change continues. Customs’ passenger surveys show most people are aware of and accept the change in regulations.

“Customs recorded over 7,600 individual transactions for people choosing to pay duty, with the total collected in the six months adding to over NZ$1.35 million.

“Nonetheless, 2.5 tonnes of cigarettes and tobacco left at airports is an incredible amount, and I’m pleased Customs is actively supporting the aim of making New Zealand smoke-free by 2025,” Ms Wagner says.

Associate Health Minister Peseta Sam Lotu-Iiga added: “The amount, 2.5 tonnes, is staggering. Every time a traveller abandons their tobacco at Customs or decides not to bring it in at all, is a victory for our health system.”

Directly contradicting his earlier statement Lotu-Iiga added: “The fact that people appear to be aware of the changes to our duty free tobacco limits and accept them is confirmation that our Government’s policies are making a real difference.”

3) The implications and unanswered questions.

Whatever the rights and wrongs of the tobacco health argument, 2.5 tonnes of abandoned tobacco product and NZ$1.35 million of duty collection are worrying numbers. Of the product generating both statistics, how much was bought ‘duty free’ at an overseas airport? A high proportion one suspects.

Minister Wagner says the allowance reduction was “signalled in advance and advertising to highlight the change continues”. But where and who to? Who are these people abandoning tobacco? Where are they from? Where did they buy their products?

Given that New Zealanders are presumably well aware of the allowance changes (especially if Ms Wagner is right), it’s a fair bet that a significant percentage of those abandoning their tobacco products are international visitors, which raises some critical issues.

Firstly, if they bought their cigarettes duty free at an overseas airport, why were they not told that the items would be dutiable (or seized) in New Zealand? And secondly, by punishing international visitors who smoke, is New Zealand really, as Mr Lotu-Iiga went on to claim, “reducing the harm tobacco causes and the cost to our health system”? Or simply penalising tourists who choose to smoke?

The first question needs to be addressed urgently by any airport retailer selling (under false pretences, let’s not beat around the bush) to New Zealand-bound passengers. The second question begs another… why not have a two-tier structure – one for homebound Kiwis and one for international visitors?

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