New Zealand First is refusing to adhere to the tobacco excise increase, saying the annual increase has "reached the limit of its effectiveness".
This year's increase saw a 10 per cent jump, pushing the price of a 25-pack of cigarettes towards $40.
In January 2018 it went up by 12 per cent and 10 per cent in 2017 and 2016, according to Stats NZ.
NZ First leader Winston Peters said he could not support the 11.5 per cent incoming increase for the 2020 year due to "unintended consequences".
"New Zealand First believes the 11.46 per cent increase in the tobacco excise is punitive for the many poor New Zealanders who can least afford another price hike," Mr Peters said.
"The excise increase disproportionately gouges the poor and New Zealand First cannot support the policy."
He said the excise tax was having less effect on decreasing smoking rates, customs were intercepting more cigarettes at the boarder and the high cost was a "threat to the safety of the country's dairy owners from violent burglary".
Budget documents this year had included revenue from a 10 per cent increase. Thirteen per cent of New Zealand adults smoke daily according to Ministry of Health statistics.