Whatever inflation figure is targeted by the bank, poorer groups tend to experience a higher inflation rate than richer groups. The prior National Government, in 2011, began annual tobacco excise increases of 10 per cent per year, in addition to an annual CPI increase. Those annual 10 per cent increases ended with the excise hike of January 2, 2020; this year, tobacco excise was only increased as an inflation adjustment. Last year’s cabinet paper on the tobacco excise increases noted that smoking households reported spending 7 per cent of their income on tobacco. Annual excise increases that match inflation will mean this does not continue to worsen, but neither will it improve.

Source: Stuff January 25, 2021 16:00 UTC