New Zealand has halved its excise tax on heated tobacco products—a move which many experts say boosts the country’s emergence as a world leader in tobacco harm reduction.
Heated tobacco products (HTP)—devices that heat tobacco sticks enough to produce nicotine-containing vapor, but without the combustion that produces deadly smoke—are substantially safer than cigarettes.
As well as making HTP more affordable, the 50 percent tax cut sends a potentially powerful public message. Associate Health Minister Casey Costello, who ordered the change in July, has said she did so to incentivize people who smoke to switch.
New Zealand knows plenty about switching already. In recent years, the country has embraced nicotine vapes as harm reduction tools, and the government recommends them for this purpose. As vaping has gained popularity, the decline in New Zealand’s smoking rate has accelerated—down to 6.8 percent by 2023.
Costello, who is also customs minister, is looking to speed things up further, however, in pursuit of the national target of being “smoke-free”—a rate below 5 percent—by 2025.
“Vaping does not work for everyone and some attempting to quit have tried several times,” she told RNZ. “HTPs have a similar risk profile to vapes and they are currently legally available, so we are testing what impact halving excise on those products makes.”
She and her government colleagues will be aware that in Japan, mass adoption of HTP by people who smoke—aided by widespread availability, with no restrictions on advertising them as safer than cigarettes—has seen a decline in past-decade cigarette sales that’s unequaled anywhere else in the world.
The minister is reportedly also considering allowing the sale of snus and nicotine pouches—currently banned in New Zealand—to add to the smoking cessation effort. These oral products have similarly demonstrated real-world harm reduction efficacy.
“Risk-proportionate taxation to make lower-risk alternatives to cigarettes more affordable for people who smoke is sensible.”
Such a multi-pronged approach would place New Zealand in a unique position, as the world continues to grapple with 8 million annual smoking-related deaths. Everyone seeking to quit smoking has their own needs, and what helps one person might not suit another.
Dr. Marewa Glover, a behavioral scientist and tobacco harm reduction advocate in New Zealand, applauded the recent tax move. “The adoption of risk-proportionate taxation intended to make lower-risk alternatives to cigarettes more affordable for people who smoke is sensible,” she told Filter.
“People who do not want to try vaping or who haven’t been able to quit via vaping need access to affordable and acceptable lower-risk substitutes for cigarettes,” Glover continued. “Heated tobacco products have been proven to be one of these substitutes.”
Relevant past research has found that increasing taxes on safer nicotine alternatives leads to more cigarette sales.
However, Glover added that New Zealand’s ban on advertising tobacco products has meant few participants in her research are aware of HTP and their harm reduction potential, so reducing tax on HTP might not be as effective as it could be.
Costello’s tax cut has also not been without its critics, many of whom frame the decision as playing into the interests of the Big Tobacco manufacturers of HTP.
“Certainly that is something that tobacco companies would have been keen to see happen,” Dr. Janet Hoek, a professor of public health at the University of Otago, told RNZ. “This is not advice that is coming from the Ministry [of Health]. It certainly seems to be advice that is suiting tobacco industry interests.”
Ben Youdan, the director of ASH New Zealand, doesn’t see that as the main takeaway, however. “There is absolutely a case to regulate and tax products according to harm,” he told Filter. “Any regulatory regime that allows vaping, or heated tobacco, oral nicotine or even pharmacological nicotine must accept that there are commercial interests.”
“The crusade against Big Tobacco is clouding judgment about the reduction in harm from all safer nicotine products.”
And the key goal of public health policy and advocacy, according to Nancy Loucas, director of the Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA), should not be to destroy Big Tobacco or demonize nicotine, but to “reduce harm and save lives.”
“The crusade against Big Tobacco is clouding judgment about the reduction in harm from all [safer nicotine] products,” she told Filter, echoing the observations of other experts.
Halving the tax on HTP makes them “more accessible to those who would benefit from them,” Loucas said. Increased affordability is likely to matter most for low-income populations with the highest smoking rates.
“But if that tax cut is used by PMI [Philip Morris International, the manufacturer of the leading HTP brand] to increase unit price of devices and heat sticks, that is bad business,” Loucas warned.
New Zealand’s success in reducing smoking rates, she continued, is down to recent governments’ respect for the evidence, combined with a willingness to engage on policy with various stakeholders—including, importantly, people who use nicotine.
In 2021, the previous government held a six-week open consultation where New Zealanders were encouraged to voice their ideas on the Smokefree Aotearoa 2025 Action Plan. Citizens and organizations shared thoughts on “supporting more New Zealanders to stay smoke-free, quit smoking tobacco or help them move to less harmful alternatives.”
The previous government also passed controversial legislation to incrementally ban cigarette sales, by raising the purchase age each year—a plan the current government controversially scrapped in November 2023. Advocates now hope that a range of accessible harm reduction products will help end smoking in New Zealand without the risks of cigarette prohibition.
Youdan said if current trends continue, it’s possible that the country could meet its 2025 “smoke-free” target.
New Zealand’s closest neighbor, Australia, has meanwhile effectively prohibited vapes by making them prescription-only and very expensive, though some pharmacy access will be permitted from October.
Public health outcomes in the two countries have since trended in opposite directions. And it’s no surprise to anyone familiar with the drug war that Australia has experienced numerous problems related to a booming illicit market for vapes (and for tobacco, which is very heavily taxed there).
In contrast, “New Zealand seems to understand that harm reduction benefits everyone, and that prohibition is not the solution when it comes to what is best for the health of the public,” Loucas said.
Youdan agreed that “New Zealand has done much better in regulating vaping as a consumer product,” but added that “we are certainly not perfect.”
“We only finally legislated on vaping in 2021,” he noted. “Whilst this legislation was intentional about harm reduction, it was also trying to catch up with a vape industry that grew almost unregulated until then.”
Youdan said if current trends continue, it’s possible that the country could meet its 2025 “smoke-free” target.
“I think NZ has shown leadership on tobacco harm reduction,” he told Filter, though “not always intentionally.”
Photograph by HS You via Flickr/Creative Commons 2.0
Both The Influence Foundation, which operates Filter, and the Centre of Research Excellence: Indigenous Sovereignty & Smoking, founded by Dr. Glover, have received grants from Global Action to End Smoking (formerly the Foundation for a Smoke-Free World). The Influence Foundation has also received unrestricted grants from PMI. Filter‘s Editorial Independence Policy applies.