New Zealand First is accusing the Government of gouging the poor with plans to increase tobacco excise.

Winston Peters has invoked the Coalition clause of agree to disagree over the 11 and a half percent hike for January.

Peters says tax rises have little effect on smoking, particularly among Maori and Pasifika.

He says cigarette smuggling has increased more than 350 percent since 2015.

He says our prices, which are among the highest in the world, have provided an opportunity for organised crime.

Peters says the increase is punitive for the Kiwis who can least afford it.

It's a way supported by former Chairman of the Tax Working Group Sir Michael Cullen. He told The Weekend Collective upping the price is not effective.

"The initial increase had a big effect in reducing smoker, but we seem to be getting down t the residual group of smokers who are becoming less sensitive to the price, even though they are on low income."

His working group recommended that this year's excise should be the last.