'Stinks like corruption': Labour on tax cut helping tobacco giant

Labour's health spokesperson says a tobacco company being the biggest winner from tax cuts for Heated Tobacco Products (HTPs) "stinks like corruption".

On Monday, RNZ In Depth revealed officials told Associate Health Minister Casey Costello that Philip Morris - the "sole supplier" of HTPs in New Zealand, would be the only commercial beneficiary of the tobacco tax cuts.

Despite a long list of problems Treasury identified with the proposal, Costello claimed she had got her own "independent" advice to the contrary and went ahead with a 50 percent excise tax cut for HTPs, at a cost of up to $216 million.

Costello has been criticised by public health experts, who last week said the excise tax cut amounted to an untested, radical experiment.

When the tax cut was revealed by RNZ in July, it was immediately criticised as "weighted in favour of the tobacco industry" by Janet Hoek, a professor of public health.

Speaking to Morning Report on Monday, Labour's health spokesperson Ayesha Verrall said the advice received from Treasury confirmed that the tax cut was a "highly unusual decision" made by Costello and Cabinet and claimed the move would result in no health benefits, and potential health harm.

"It is the closest decision I can think of where government has acted in the financial interest of a single company that only does harm."

Despite Costello denying she had gone to the tobacco industry for advice and there being no evidence of it, Verrall said there was "no reason for making these changes other than benefiting the tobacco industry".

"It does absolutely nothing for the health of New Zealanders. It is just a handout to the tobacco industry."

Costello's claims that HTPs were a less dangerous option compared to cigarettes were also challenged by Verrall.

"I don't believe there is (evidence) and I've seen that in documents from the World Health Organisation that unlike vaping, where there is evidence for it being less harmful than cigarettes, that is not strongly proven for heated tobacco products and there's numerous chemicals in heated tobacco products that cause cancer and respiratory disease."

She had not seen any of the "independent" advice Costello referred to and said it was on her to share that publicly.

"The onus is on the minister to share this independent advice otherwise I think it is reasonable that New Zealanders look at the fact that Philip Morris is going to benefit by up to ($216m) and conclude that this is vested interest influence on our government's decision making.

"The whole thing stinks like corruption."

Costello declined to be interviewed by RNZ In Depth and did not address specific questions put to her.

In a statement, she said: "I have no connections to the tobacco industry and it's completely wrong to suggest that the tobacco industry has anything to do with these policies, which are aimed at helping people quit smoking."

In her written statement to RNZ, Costello said she was committed to Smokefree 2025 and repeated her position that tax cuts for HTPs would support that.

"A key reason that smoking rates have reduced so rapidly in recent years is that smokers have switched to other, less harmful products, such as vaping," she said.

"I want to ensure that we continue with this practical approach and provide a range of alternative options, which is why we are trialling the reduction in excise duty on HTPs."