Legalising weed would raise at least $28 billion
The costings did not include savings which would be made through reduced costs of policing, prosecuting, and jailing cannabis related offences.
The Parliamentary Budget Office (PBO) has produced costings for Federal Greens Senator David Shoebridge, revealing that legalising cannabis would raise $28 billion across 10 years.
The model considered in the costings, would see the establishment of the national body Cannabis Australia National Agency (CANA) to oversee the regulation of cannabis, act as a wholesaler to all suppliers, and issue licences to cultivators and sellers. The cost of this would be met entirely by licensing fees.
In the costings model, the pre tax price of cannabis would be $13.40 per gram if legalised in 2024. In addition to a 15% to 25% excise tax, the Goods and Services Tax would apply.
The costings assumed that there would be a 15% increase of regular cannabis smokers in the first year following legalisation, followed by increases in line with population growth.
They further assumed that 52% of regular users would purchase cannabis from a legal source in the first year after legalisation (the same rate as occurred in Canada), and over 95% of people would buy cannabis from a legal source over the subsequent five years.
According to the PBO, “there is a high level of uncertainty in this costing as there is limited information available in Australia to estimate the production in cannabis cultivation and the consumption of recreational cannabis, in particular its market price.
“There is also uncertainty around how production, consumption and price would change over the period to 2032-33.”
In a statement, Shoebridge said, “the modelling from the Parliamentary Budget Office shows that when we legalise cannabis we take billions away from organised crime, police and the criminal justice system and we can then spend it on schools, housing, hospitals and social support.”
The costings did not include savings, described by Shoebridge as “significant”, which would be made through reduced costs of policing, prosecuting, and jailing those convicted of cannabis related offences.
Shoebridge noted that a revenue increase in line with the PBO’s costings “is enough to build affordable homes for 280 000 people or raise JobSeeker by $80 a fortnight”.
The PBO’s costings follow legal advice received by the Greens that the Federal Government could legalise weed nationally, rather than requiring legalisation from each state government.