One of the most discussed benefits of Australia legalising recreational cannabis is the potential tax revenue. What’s not so often talked about, is the actual projected amount of tax revenue. So, let’s get into the numbers.
Thankfully, some wonderful folks in the government want to legalise cannabis, just like us. And they’ve already worked out the tax benefits Australia and its states could realise with legalisation.
Senator Richard Di Natale of the Greens prepared a Policy Costing for the Parliamentary Budget Office in 2018. Detailing the financial implications of legalising recreational cannabis in Australia.
Here are the results.
|Year||Cannabis Excise||Company Tax||GST|
|2019 - 2020||$1.36 billion||$450 million||$490 million|
|2020 - 2021||$1.37 billion||$400 million||$490 million|
|2021 - 2022||$1.35 billion||$350 million||$480 million|
|2022 - 2023||$1.32 billion||$210 million||$490 million|
|2023 - 2024||$1.29 billion||$210 million||$470 million|
|2024 - 2025||$1.37 billion||$230 million||$500 million|
|2025 - 2026||$1.52 billion||$230 million||$560 million|
|2026 - 2027||$1.61 billion||$230 million||$590 million|
|2027 - 2028||$1.73 billion||$250 million||$620 million|
Not only would it generate vast revenues, but he estimated legalisation would save the Australian Federal Police $25 million each year in various expenses.
In the end, if we’re speaking from only a monetary position, the benefits resulting from cannabis legalisation in Australia is massive.
If recreational cannabis is legalised, Australian could generate more than $20 billion in the next 10 years in tax revenues and savings.
This is just one of the many reasons Australia should re-legalise recreational cannabis.
Several assumptions were made to come to those figures, including:
- The average recreational cannabis user consumes 3 grams per week
- Legalisation of cannabis would result in increased demand over time
- Cannabis tourism from overseas visitors would account for 10 percent of total sales
On top of that, due to the nature of cannabis and its readily available black market in Australia, there is a level of unsurety as well.
There is a high level of uncertainty in this costing as there is limited information available to estimate the level of consumption of recreational cannabis or the market place.
Read through the full policy costing here.