Pot reform equals dollars and sense, says Treasury

Internal Treasury documents released under the OIA suggest the government could save up to $400 million a year.

Internal Treasury documents released under the OIA suggest the government could save up to $400 million a year and reap an additional $150 million a year if cannabis laws were reformed.

The documents, prepared for an internal Treasury forum “designed to test policy thinking on a range of issues” were not “official Treasury opinion,” according to Finance Minister Bill English, who released them as a result of an information request from Nelson lawyer Sue Grey.

The request from Ms Grey, who has in the past successfully represented clients using cannabis to combat chronic pain, was largely focused on the cost to the government of importing pharmaceuticals that could be replaced by cannabis products but also asked for any information regarding the cost of current cannabis laws and the estimated tax and GST take if cannabis trading was legalised in New Zealand.

According to the internal documents, the cost of enforcing existing cannabis laws is either $300 million or $400 million a year, and taxing the sale of cannabis “could generate $150 million revenue a  year.”

They also state that “New Zealand’s drug classification system does not align closely with the relative levels of personal or social harm caused by drugs” (both legally available alcohol and tobacco are rated as more harmful than cannabis).

In addition, the documents note how:

  • current policies do not appear to be effective at reducing the rate of illicit drug use;

  • punitive approaches to drugs have adverse social consequences (thanks to job and travel opportunities being limited as a result of criminal convictions); and

  • prohibition disproportionately affects men, Maori and youth and has high fiscal costs.

The point is also made that “drug reform isn’t a particularly radical idea these days. It’s supported by The Economist and the Global Commission on Drug Policy, as well as reports by our Health Select Committee and the Law Commission.”

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