Research conducted at the University of Otago shows the continuation of yearly 10 percent tax increases on tobacco will have multiple benefits for society.
The research, directed by Professor Tony Blakely, looks at the outcome of the government’s yearly 10 percent tax increase on tobacco from 2011–31. The research concludes that if the scheme continues, it will lead to “health gains, net health-system cost savings” and two to three percent reductions in “health inequalities between Māori and non-Māori”.
In 2011, smoking prevalence was 35 percent for Māori and 14 percent for non-Māori.
One of the main ways the research team quantified the effect of taxation is through quality-adjusted life-years (QALY). This measures the disease burden on life, which includes both duration and quality of life. The model included 16 tobacco-related diseases.
The researchers estimated that a total of 260,000 QALYs would be gained if the annual tax increases continued, with net health-system cost savings of around NZ$3.87 billion due to prevention of tobacco-related diseases.
“This health gain of 260,000 QALYs is 17 percent of all health gain that we estimated would occur if all smokers in 2011 quit that year, and we followed or simulated the population into the future,” said Blakely.
New Zealand is one of a number of countries pledging to be tobacco free in the near future, with 2025 being the current government’s goal.
Blakely said he doesn’t think that a tax increase at 10 percent per year would get New Zealand to the 2025 goal. Instead, “we’re encouraging policy makers to look at a whole package of things”.
“One thing we are trying to get through to policy makers is, go ahead and use tax, that is really important. But if you are interested in getting health gains soon, then we need to have policies that target middle-aged and older smokers and get them to quit.”
Blakely said it has taken “several years to get this model working”. Now it is working successfully, “we can run through other tobacco interventions, we can run through sweet and sugary beverages and discover the significance of policy impacts on each”.
However, even with solid evidence of the positive impact such policy implementations could have, Blakely admits it is possible no changes will be made.
“The policy maker might just shrug their shoulders and say, I just need to know what reduces prevalence, I don’t really need to know the qualities gained and the costs saved.”