Nicola Willis admits scrapping smokefree laws will help fund tax cuts in Newshub Nation interview

The incoming Government is promising to scrap the ban on the sale of cigarettes to future generations introduced by Labour. 

On Friday, it was revealed in the coalition agreements between National, ACT and NZ First the new Government would repeal the Smokefree Environments and Regulated Products Amendment Act 2022 "to remove the requirements for denicotinisation and the reduction in retail outlets" and "the generation ban".

National and NZ First's agreement also promises to scrap the laws before March next year.

"What you saw in the pre-election fiscal update was the Treasury assessed the effect of drastically reducing the number of shops that could sell tobacco products, denicotising those products and introducing a range of restrictions would significantly reduce revenue to the Crown," incoming Finance Minister Nicola Willis told Newshub Nation's Simon Shepherd on Saturday.

She said both ACT and New Zealand First were "insistent" on reversing the restrictions.

"We've agreed to that in these coalition agreements," Willis told Shepherd.

Her comments come after the coalition documents revealed the trio agreed to major election promises including National's tax cuts plan. The plan, however, will not contain a major revenue stream to fund the plan - a foreign buyers' tax - due to opposition from NZ First.

Shepherd pointed out the plan now had a more than $2 billion hole and questioned how that would be covered.

"The foreign buyers' tax was responsible for less than 20 percent of the programme and we're forging ahead with the other seven areas of reprioritisation [and] of additional revenue," Willis said.

"We are trimming the package beyond 2024... we've got some additional revenue coming in and some extra savings.

"National was very careful to put together a fiscal plan that had significant buffers of unallocated spending in it which we can rely on.

"Coming back to those extra sources of revenue and other savings areas that will help us to fund the tax reduction, we have to remember that the changes to the smoke-free legislation had a significant impact on the Government books - with about $1 billion there. There's also a commitment in these coalition agreements to do a lot more work on tax audits to make sure those who owe tax are paying fairly."

Appearing on Newshub Nation after Willis, incoming Regulation Minister David Seymour said he believed the smokefree laws would force tobacco onto the black market.

"What is now going to happen is all those dairy owners as part of their revenue - all of those people who are law-abiding and don't break any other rules - can continue to buy [cigarettes] and the Government can continue to tax it.

"I think that's a more realistic solution than what the previous Government was headed towards."

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