Budget 2012: Cigarettes in the crosshairs

This year's Budget has laid down the law for smokers.

There is to be a 10 percent increase in excise on cigarettes each year for the next four years, starting January 1 each year.

By 2016, the price of cigarettes will exceed $20. 

The move will produce more than $528 million over four years.

The initiative is part of the Maori Party-led goal of becoming smoke-free as a nation by 2025. Two years ago cigarettes saw a 40 percent increase in excise, and annual inflation-linked increases have also affected the pack price.

It's generally accepted that for every 10 percent increase in tobacco prices, consumption falls by 5 percent.

Around $20 million will go to a new fund called Pathway to Smoke-Free 2025, which will set up programmes to discourage smoking and help users to quit.

Meanwhile, the health sector gets the biggest boost.

It will benefit to the tune of an extra $1.5 billion over the next four years, with total spending on health for 2012-13 at $14.12 billion.

This year's health increase includes $435 million for 'new initiatives' and to help meet rising costs in the health sector.

Of that there is $358 million in new money for health, $47 million of savings and under-spends and $30 million from drugs coming off patent.

District Health Boards will get $350 million over the next year and additional funding from the Ministry of Health for service contracts.

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