Is the legalisation of marijuana in Australia a pipe dream? Maybe not, if the government takes the Parliamentary Budget Office's latest estimates under consideration. According to a new report from the PBO, GST on marijuana sales could bring in over $300 per year in revenue -- at least to start with.
The document, entitled "Legalising marijuana", is available for public consumption from the Parliament of Australia website. The proposal outlines the potential monetary benefits of legalised marijuana sales, both in terms of GST collection and the reduction of enforcement costs.
While the gross GST revenue would be $650 million, most of this would be funnelled back into the states and territories. For the federal government, the pros come from reduced funding for the Australian Federal Police, Australian Crime Commission and Australian Border Force. This would equate to $259 million over the 2015-2016 budget.
It should be noted that the report has its fair share of suppositions: compliance from all states and territories, no restrictions on marijuana production and increased supply and demand from legalisation. It also ignores the impact such a move would have on alcohol and tobacco sales. The report itself states that the costing is "of low reliability":
There is uncertainty regarding the price and quantity of marijuana currently consumed, and the price and quantity of marijuana that would be consumed in a newly legalised market. It is also difficult to separately identify marijuana law enforcement activities, as these are often integrated within broader law enforcement activities.
Still, it's fascinating the federal government has any interest at all. Hard to ignore the revenue potential, I suppose.