Radio NZ reports on Treasury officially acknowledging the truth.
A report by the Treasury has admitted smoking actually saves the Government money in the long run.
The fiscal benefits of smoking have long been suspected but rarely acknowledged and a report by Treasury now puts this on the record.
In its report, Treasury says smokers often die earlier than non-smokers and save the state in superannuation costs.
Treasury says smokers pay $1.3 billion a year in excise which may already exceed the direct health costs they impose.
The report then goes on to consider broader economic questions. It says smokers' shorter life expectancy reduces superannuation and aged care costs, meaning they are already "paying their way in narrowly fiscal terms"
The report was prepared for last week's Budget decision to raise the tax on cigarettes to discourage smoking.
Research by the New Zealand Institute of Economic Research has suggested that people should be able to pay increased prices into a special fund and get the money back later if they can prove they have quit.
The economic consultancy says that would be more effective than giving the money to the Government in higher taxes.