Associate Health Minister Casey Costello says she has no intention of reducing tobacco excise tax, after comments to Newstalk ZB raised concern among public health researchers that a review could pave the way for a cut. RNZ

Costello told Newstalk ZB she was "considering a review of the excise, and that's what we took forward to cabinet, that it's time that we started to consider a review on how our excise structure is for all of these products." RNZ Asked separately by RNZ, she said she had no intention of reducing excise and had not discussed doing so, framing her goal instead as policies that "stop people smoking and stop the supply of illicit cigarettes and tobacco." RNZ

The comments landed alongside an RNZ investigation that found illicit cigarettes being sold over the counter in Auckland well below the legal price floor set by excise. One East Auckland store was selling packets for as little as $13 — less than half the excise component alone. RNZ Importing cigarettes without paying duty, and selling illicit product, are both offences under New Zealand law, carrying fines of up to $20,000, imprisonment, or both. RNZ

Health Coalition Aotearoa called any tinkering with the excise structure "foolhardy." Its spokesperson on smoking, Otago University public health professor Janet Hoek, said excise remains a key lever for prompting existing smokers to quit and deterring uptake among young people. RNZ Hoek argued the more durable fix for the illicit market is accession to the World Health Organisation's Protocol to Eliminate Illicit Trade in Tobacco Products, which would require licensing of every point in the supply chain rather than adjusting the tax settings that fund enforcement. RNZ

On enforcement, the government's Action Group on illicit tobacco has completed its first combined operation, arresting five people and seizing 1.3 million cigarettes — representing more than $2 million in evaded excise. RNZ Costello has also flagged caution about following Australia's approach to tobacco excise, telling Newstalk ZB host Ryan Bridge that New Zealand should avoid repeating what she characterised as Australian mistakes on tax settings. iHeart

The scrutiny of Costello's remarks sits against a documented record of her advancing excise concessions for a related product category. Cabinet material published by the Ministry of Health in July 2024 shows Costello brought forward a proposal to reduce excise duty on heated tobacco products. Ministry of Health An updated Cabinet paper on the same reduction, dated 13 May 2024, carries the reference H2024041136. Ministry of Health Officials subsequently commissioned an evaluation of that heated tobacco excise reduction, dated 7 March 2025 under reference H2025061596, conducted under section 18(d) of the relevant Act. Ministry of Health

New Zealand's excise regime currently taxes smoked tobacco products but not nicotine vaping substances, consistent with coalition agreement commitments limiting the excise settings to smoked products. Ministry of Health That asymmetry — full excise on cigarettes, a reduced rate on heated tobacco, none on vaping — has been part of the backdrop against which Hoek and others read any signal of a broader excise "review."

Costello's record includes a finding last September that she breached ministerial information-handling rules by supplying health officials with a tobacco industry-friendly document to inform policy work. Facebook/RNZ That history gives the current exchange its edge: public health figures are parsing the minister's public language for signs of intent, while she maintains the review under discussion is about excise structure and illicit trade, not a rate cut for cigarettes.

Cabinet has not, on the public record, agreed to any change in the smoked tobacco excise rate. What Costello has confirmed is that a review of the excise structure "for all of these products" was taken to Cabinet, without specifying which products beyond the existing heated tobacco carve-out that review might touch, or what timeframe it operates on. That gap between what was said on talkback radio and what has been confirmed to press is likely to keep drawing questions, particularly given the parallel evidence — from RNZ's own retail checks and from the Action Group's seizure figures — that the illicit market is already undercutting the current excise structure by a wide margin.