The Costs of Australian Drug Policy

Abstract

Despite seventy years of increasing restrictions, and in the case of heroin almost forty years of absolute prohibition, by all measures the consumption of illegal drugs in Australia has continued to grow. Despite — or perhaps because of — these policies, the costs of enforcement borne by the taxpayer and other costs borne by residents at large have continued to grow. The AIDS epidemic exposed injecting drug users (IDUs) and their partners to the risk of HIV infection, a further cost, but it has encouraged discussion of the effectiveness of the existing policy and the feasibility of alternatives. This study is an attempt to put dollar amounts on these costs, and to estimate how they would change under an alternative policy of drug use regulation. We argue that the recent Cleeland Report underestimates the true costs of the law enforcement against illicit drug use by a factor of at least two. We estimate a total annual cost of existing drug laws in 1987–88 to Australia of $950 million, as well as forced transfers of $656 million.