A strong economic case for drug reform in New Zealand

By Newsroom

Reforming New Zealand’s “punitive” drug laws - including the decriminalisation of all drugs and introduction of a legal market for cannabis - would benefit the country by at least $450 million a year, according to a cost-benefit analysis commissioned by the Drug Foundation.

The report, produced by economist Shamubeel Eaqub from consultancy Sense Partners, says there would be a net social benefit of at least $225 million from investing an extra $150m in addiction treatment, drug education, and harm reduction interventions.

It estimates there would be a net social benefit of $34m to $83m from replacing the Misuse of Drugs Act, passed in 1975, with a new law based on a health-based approach to the issue.

Creating a legal, regulated market for the purchase of cannabis would bring $185m to $240m in new tax revenue while also saving the justice sector $6m to $13m, the report says.

The release of the report comes as the Government carries out inquiries into New Zealand’s mental health and addiction services, while also preparing for a referendum on legalising the personal use of cannabis by the next election - a commitment in the Greens’ confidence and supply agreement with Labour.