Could Decriminalizing Cannabis in Australia Save Taxpayers?

Decriminalizing cannabis in Australia could save taxpayers $850 million a year, says a recent report.

According to the report released by the Penington Institute, criminalizing cannabis costs taxpayers $1.7 billion a year in law enforcement.

Like other Western nations, Australia has a prominent underground cannabis market that has only grown more extensive and accessible in the last few years.

Between 2019 and 2020, says the report, there were more than 60,000 cannabis seizures.

“The average cost per person for police and court activities around a cannabis charge is estimated at $1,918,” the report says.

Decriminalizing cannabis in Australia could save taxpayers $850 million a year. But full-scale legalization would save taxpayers $1.2 billion annually.

According to the report, 78% of Australians believe cannabis possession should not be a crime, with 41% supporting legalization.

The report also highlights that around 7.6 million Australians have used cannabis at least once.

But What about Organized Crime?


Once upon a time, in the Western legal tradition, legalization and decriminalization were synonymous. For example, in the 1970s and 80s, Australia’s states and territories repealed anti-homosexuality laws.

So was homosexuality decriminalized or legalized?

Likewise, if Australia were to abolish its cannabis prohibition laws, would we say they’ve legalized or decriminalized?

Proponents of this dichotomy will say that decriminalization removes cannabis from the criminal justice system but doesn’t remove the criminals themselves (i.e. Illegal markets and criminal networks).

On the other hand, legalization provides a “regulated supply” that “keeps people away from contact with criminals who operate in the black market and erodes criminal networks.”

And so Australia is falling into the same trap Canada did when their government legalized cannabis.

Namely, they throw out the concept of a self-governing civil society with an established rule of law governing commercial activities.

In their mind, without new legislation and a centralized bureaucracy, consumers will be at the mercy of street merchants who care nothing for the quality of the cannabis they sell.

Like the runaway greenhouse effect, this process could be called the runaway democratic effect. 

Western societies, like Australia or Canada, already have rules to regulate the commercial cannabis industry.

(For example, tort and criminal law provide security, while contract, property, and commercial law facilitate cooperation and exchange.)

Legalizing cannabis doesn’t require anything beyond a stroke of a pen.

As for organized crime – if your only crime is producing or selling a nontoxic herbal plant, then the person aggressing against you is the criminal.

Looking at the Canadian Example 

cannabis and australia

The Australian government may legalize cannabis more rationally than the Justin Trudeau government did, but they’ll likely make similar mistakes.

For example, this report says legalization “frees up police time and resources, allowing them to focus on other, more serious offenses.”

From the Canadian perspective, this couldn’t be more naive. Police and politicians have used cannabis legalization as an excuse to ramp up law enforcement budgets.

When the report says legalization will allow police to “focus on other, more serious offenses,” do they not consider that the continued existence of a cannabis black market would be one of these “more serious offenses?”

Legalization in Canada prompted police to freak out about stoned drivers. Will Australian politicians and bureaucrats come to the same conclusion? That the police need more money and resources to control traffic?

When Canada legalized cannabis, the head of the legalization committee said, “there are going to be up-front costs that governments at all levels are going to have to absorb.”

Far from saving taxpayers, big-government legalization has cost Canadians. And it continues to, even indirectly.

Critics will point to the billion-dollar revenue from government distributors, and claim legalization has succeeded. But all they’ve demonstrated is that they need to understand opportunity costs.

Could Decriminalizing Cannabis in Australia Save Taxpayers?


Decriminalizing could save Australian taxpayers some cash since simple possession wouldn’t be illegal. But police bureaucracies have a way of filling the void.

After all, in a political bureaucracy, you have to spend more every year. If you come up under budget, higher-ups cut your budget the following year. The incentive is to spend.

Contrast this to the private sector, where saving money is the entire point. You have to come up under budget, or you’ll eventually go bankrupt.

Could decriminalizing or legalizing cannabis in Australia save taxpayers? It’s possible. But the odds aren’t in their favour.