Calpital Budgeting

What smoking costs

The cost of smoking-related health care to the New Zealand taxpayer is about $250 million. There are also costs from litter, accidents, and fires. The government spends $28 million a year on smoking cessation and prevention programmes. In addition, the government loses income and other tax revenue from the lower productivity of sick smokers, and because dead smokers don’t work and don’t pay taxes. Can we value the lives lost due to smoking? Every year about 5000 people die prematurely from smoking. That includes deaths from passive smoking – people, including infants, who are not smokers themselves, but who die because others around them smoke. If these people were to live to the natural term of their lives, the New Zealand population would be 2 percent bigger, that means 80,000 more people. ones who are ill is equivalent to reducing the value of human capital by 3.2 percent. Easton says it is almost as if on average you lose 45 minutes every day of your life from either your extra illnesses and early death caused by tobacco, or from worrying about someone you care for who is suffering, dying, or dead from tobacco. Some lose more, some less. Smokers lose the most. Many of them lose as much as 14 years of their life from dying early, and having miserable years from ill health before that. Easton also calculated the loss of effective GDP (or national material production measured at market prices) from smoking. That is the extra health costs, the loss of production, and all the other material products described above. He estimated that this represented a reduction in production of 1.7 percent (or about $1700 million a year in 2000.) Without smoking, the goods and services we would have available to us would be that much bigger.

These dead people are important to us all. They So the social cost of smoking is high? are other people’s and our own children, parents, aunts and uncles, grandparents, neighbours, Very high – it is especially high for...