Australians are spending more than $7 billion each year on illicit drugs, according to groundbreaking research from the Bureau of Statistics. Drug experts and campaigners say the data shows attempts to police the ''war on drugs'' are completely dwarfed by the population's demand for the products, with Australians spending about seven times more buying drugs in 2010 than governments spent enforcing drug laws.
And the vast majority of the billion-dollar market is going directly into the pockets of drug manufacturers and retailers, with early analysis from the ABS staff research project showing profit margins of more than 80 per cent. The chief executive of drug harm minimisation group Anex, John Ryan, said he was staggered to see how big the drug market actually was.
"The drug market is clearly much bigger than most people give it credit for," he said. "There is no doubt that the profit incentive is driving it''.
He called for a Productivity Commission inquiry to examine the costs of drug use, and how government money was spent dealing with the problem.
Research released this week by the Drug Policy Modelling Program at the University of NSW calculated Australia was spending about $1.1 billion on enforcing drugs laws, dwarfing the $361 million spent on treatment and $36 million for harm reduction.
''These figures put together really blow the idea we have got the drug market in check out of the water,'' Mr Ryan said.
A draft of the ABS staff research seen by Fairfax Media calculates the size of the Australian market using health and law enforcement data on drug use, seizures, purity and import costs. The $7.1 billion spending estimate for 2010 is nearly twice what official ABS statistics say Australia spends on literature, and $2 billion more than is spent on fashion. Figures updated since the first draft, provided to Fairfax Media by Anex, show in 2010 Australians spent about $3.8 billion on cannabis, with a margin of $3.7 billion for manufacturers and sellers.
Australian Drug Law Reform Foundation president Alex Wodak said the data showed that the economic forces driving illicit drug consumption would always trump the forces of law enforcement. "The economic forces ensure that the only arrangements that are politically acceptable at the moment, i.e. drug prohibition, cannot work," he said. "In the short term, political forces always triumph. In the long term, economic forces always win". Dr Wodak said he believed the figure could be an underestimate, as a report by Access Economics in the late 1990s had estimated the cannabis market alone was worth $5 billion.
Australian National Council on Drugs executive director Gino Vumbaca said the figures showed why drug treatment and harm reduction programs were struggling to meet demand.
"Not everyone who takes drugs has a problem but if you are telling people they have to wait [for treatment] that's problematic," he said. "This data shows you are not going to arrest your way out of alcohol problems and you are not going to arrest your way out of drug problems.''
The president of Families and Friends for Drug Law Reform, Brian McConnell, said drug laws were pushing "young and naive" people towards synthetic versions.
June 22, 2013