September 10th, 2015


On the ridiculousness of how much we pay to keep drugs illegal

I've been looking at the BERL study again. This is the most comprehensive study ever done into the cost of alcohol and other drug use in New Zealand. it's nearly 10 years old now, but it's still the only one that goes deep.

Some interesting info from the study:
1. Total annual cost of alcohol and other drug use - $6.52billion

2. Of that, $1.58billion is associated with 'other drugs' (ie not alcohol). That amounts to approximately 1% of GDP.

3. Around 16% of adult New Zealanders will admit to having used illicit drugs in the last year*.

4. Of this cost, $85.2million is spent on healthcare: $11.8million on pharmaceutical dependence treatments such as methadone, $52million on community based treatment programmes, and $11.3million on hospital costs for road injuries, drug psychoses, self harm, or accidental poisoning.

5. $395million is spent in the justice sector**: largest costs are imprisoning people $129.7million, police and prosecution $105million, theft and property damage cost $52.6million.

6. Lost output accounts for $188million - lost output being made up of premature mortality $141million) and incarceration ($87.9million)

7. Resources diverted to drug production total $518.7million, mostly going to the cannabis production market.

8. BERL put intangible costs (years of life lost at $106,600 a year) at $386.5million based on road fatalities, homicide, and early deaths.

So I went through this list and divided it into costs associated with drug use, and costs associated with drugs' illegal status. Here's how it came out:

Costs associated with drug use (healthcare, half of theft and property damage***, half of premature mortality lost output, half of intangible costs): $375.25million.

Costs associated with drugs' illegal status (justice costs, half of theft and property damage, incarceration lost output, half of premature mortality lost output, diverted resources****, half of intangible costs: $1239.05million.

This is per year. Gosh.

Meanwhile, I also looked at some 2011 figures on addiction treatment in New Zealand, just to see how up to date BERL's figures were on that.

Turns out that these days we are spending about $134million a year on treatment services *for BOTH alcohol and other drugs*, and that covers about half of the people who want help to reduce their use. There are 50,000 people a year who want treatment but don't get it.

To double the services provided would take the cost of treatment services to New Zealand up to $268million a year. Let's be generous and say $300million.


If we were to decriminalise drugs and focus all that enforcement money on treatment and support for those who need it, even with inflation since BERL's study we would be able to pay for it three times over. And that *includes* alcohol treatment.

Or we could just pay for what we need and divert that other $900million into fixing child poverty, or something.

* Personally I'm ok with 1% of what I produce being used to cover the cost to enhance the lives of 16% of the population. YMMV.

** Yes you read that right. We really do spend 3.5 times as much on criminal approaches to drug use than we do on health ones.

*** I halved these because it's impossible to differentiate between theft associated with drug use and theft that happens in association with the illegal market. Likewise premature mortality. I think I'm being overly harsh here, since for example, opiate OD deaths in NZ could be mostly prevented if naloxone were available, and people who can access drugs easily tend to avoid being criminals if they can.

**** If these things were not illegal, 'diverted resources' would just be resources, bought and paid for legitimately, with GST and such.