Smokers in New Zealand will pay USD20 for a pack of cigarettes under the government’s budget plan released yesterday. Polluting industries will also get hit with higher taxes.
In its annual budget, the government forecasts that rising fiscal surpluses in coming years will allow it to begin paying down its public debt. Here are some of the highlights:
The government plans to hike tobacco taxes by 46 percent over the next four years as it continues an ambitious campaign to eliminate smoking from the South Pacific nation by 2025. Once the taxes are in place, a pack of 20 cigarettes will cost about 30 New Zealand dollars ($20), one of the highest prices in the world.
Indigenous Maori have relatively high smoking rates, and the tax plan was pushed by the Maori Party. Te Ururoa Flavell, the party’s co-leader, said it was the right thing to do, even if cost his constituents more money.
“What I do know is that there are so many of our young women, because research tells us that, who are dying because of cancer,” he said. “I’m happy in my heart. If I can save more than one life, I would have done my job.”
A subsidy for polluting businesses that was introduced to help them out after the 2008 global financial crisis will be eliminated by 2019. After that, those businesses will need to pay more for releasing polluting gases. New Zealand is aiming to reduce its greenhouse gas emissions by 30 percent from 2005 levels by 2030.
The government says the measure will help grow a cleaner economy. But opponents say the measure amounts to a tax hike on businesses, and consumers will end up paying more.
New Zealand is unusual among developed nations in that it’s operating with a small surplus rather than borrowing money to pay its bills. The government’s books returned to the black last year for the first time since the financial crisis.
The Treasury is forecasting the economy will continue to grow at an average annual rate of 2.8 percent over the next five years. That’s despite a big drop in prices for its key dairy exports, due in part to slowing growth in China. The dairy downturn has been offset by a boom in tourism as well as growth in construction and immigration.
“A positive economic outlook and stable finances means New Zealand has choices that few other developed countries have,” said Finance Minister Bill English. Nick Perry, Wellington, AP
No Comments