$300m gain if pot legalised — NZIER
The New Zealand Institute of Economic Research — a group better known for its views on inflation targeting and GDP growth — says New Zealand should move “sooner rather than later” to legalise marijuana which would generate a net gain of $300 million to the government accounts.
Drawing on Treasury research which found that legalising could reap $150m in new government revenue and reduce spending on drug enforcement by around $180m, NZIER principal economist Peter Wilson concludes that legalisation, combined with heavy taxation, regulation and education would be a better way of reducing social harm from the drug.
“The result should be less use, considerable fiscal savings to the government and the removal of a valuable source of revenue for criminals,” Wilson writes. “Prohib- ition of marijuana, just like prohibition of alcohol before it, has been a costly failure.”
Wilson argues that legalisation and taxation of the sale — as opposed to decriminalisation — would have the advantage of allowing regulators to push the price higher.
But he notes that the current wave of marijuana policy reform offers New Zealand the chance to take a good look at which approaches are working best.
“We suggest New Zealand move sooner rather than later to implement effective policies based on that evidence,” Wilson concludes.
The NZIER report follows a call from a horticultural expert for New Zealand to grab the economic opportunity of law reform.
Mike Nichols, writing in the latest issue of NZGrower, said New Zealand could miss out in much the same way as it did with the opium poppy trade now dominated by Tasmania.
“The value of a kilogram of medicinal cannabis compared with a kilogram of pinus radiata is a clear example showing that New Zealand should be producing, and exporting, high value and low volume products,” Nichols said.