New Zealand First has spoken out in opposition to a planned hike in tobacco tax, invoking the "Agree to Disagree" provision in its Coalition agreement for the first time.
Winston Peters has described the automatic tobacco excise increases as punitive and lacking ineffective. Photo: RNZ / Patrice Allen
An automatic 11.46 percent increase is due to kick in on 1 January 2020, the last of four consecutive excise hikes agreed by the former National-led government.
In a statement, a NZ First spokesperson confirmed the increase would still go ahead despite its resistance, as the party did not have the support of Labour and the Greens to pass legislation revoking it.
As a result, NZ First had triggered the "Agree to Disagree" clause - as outlined in the Cabinet manual - which allows it to publicly express differing views on agreed upon topics.
Speaking to RNZ from Dubai, NZ First leader Winston Peters described the tax hike as "an attack on poor people" which was no longer working as designed.
"We've all got our views on whether people should be smoking or not, but when you look at the massive increases taking place year upon year... it's no excuse to say it was [the former National government's] policy and we've got to go ahead with it."
Studies showed the policy had "reached the limit of its effectiveness" with dwindling reductions in smoking rates, particularly among Māori and Pacific smokers, Mr Peters said.
Furthermore, the repeated tax hikes had led to a "whole battery of attacks on supermarkets and corner dairies" and a whopping 352 percent jump in the number of smuggled cigarettes being intercepted at the border over the past four years.
Mr Peters confirmed he had raised the difference in opinion with Labour about two weeks ago, but said his party's stance was no surprise.
"We said, 'look, we can't go along with this. Can we make it clear that we don't agree on this matter and leave it at that?'
"This is not out of left-field. To be fair, our coalition partner understands that. We've agreed to disagree. And it's no more and no less than that."
In a statement, Associate Health Minister Jenny Salesa played down the disagreement, saying Labour respected New Zealand First's "long-standing position".
"Tobacco excise increases have worked to get our smoking rates down, but it is important we focus on other ways of helping to support people to quit, such as new technologies.
"The government remains committed to the Smoke-free 2025 goal."