New Zealand’s tobacco tax improving health of Maoris; Cuts Kiwis’ healthcare costs
New Zealand government's tobacco tax is doing a great social service by bridging the health inequality between ethnic Maori and rest of the population. The 10 percent annual hike in excise on tobacco was initiated in 2012. Now the results are out, showing some positive gains.
A study conducted by the Otago University’s researchers found that the tax induced greater quality-adjusted life-years in Maori, almost by three fold. Tony Blakely, the main author of the study said the modeling suggests that ongoing tobacco tax is increasing both health and financial gains. Early results show an obvious reduction in medical disparities between a Maori and non-Maori by almost three per cent. He said quality and quantity of life gains were much higher in Maoris than non-Maoris, because incidence of smoking is higher and price sensitivity more pronounced among Maoris. Quality-adjusted life-years or QALYs is a metric of disease burden that takes into account both duration as well as quality of life gained for the country's 2011 population.
Reduced Health Costs
For New Zealand as a whole, the savings from healthcare costs from the Tobaco tax would be nearly $4 billion (AUD 3.63 billion) if the excise rate stays at this rate until 2032. This is because the crunch in supply will reduce 16 tobacco-related diseases. The change will be more visible due to the fall in greater number of indigenous smokers and higher sensitivity about tobacco price.
The research paper was published in the international journal PLOS Medicine. In that, Blakely cautioned that health gains and cost savings may not peak for several decades. “This is because smoking is more common among younger age groups and tobacco tax effect will be greater among young people, given their limited disposable income. These young people would not reap the maximum benefits from reduced rates of tobacco-related diseases for many decades to come, due to the long delay between smoking and the incidence of tobacco-related disease showing up in individuals," he said.
"This health gain of 260,000 QALYs is 17% 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," Blakely said. The expert suggested that rapid cost savings and health benefits will flow if there is additional focus on curbing smoking among middle-age and older people. Already John Key government of New Zealand has banned display of tobacco in shops and outlets like bars and had set a goal of a smoke-free nation by 2025.
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