Forget negative gearing, superannuation concessions and GST increases.
If the government is really serious about solving its revenue problems, it needs to impose some form of taxation and regulation on the drug industry. We probably have very little idea of how big this industry is, but here is a news item from The Age today:
More than $1 billion worth of ice has been seized from a shipment of stick-on gel bras and inside storage units filled with art supplies, Australian Federal Police say, in what is being described as the largest seizure of liquid methamphetamine in Australia’s history. This amounts to 3.6 million individual hits of ice being taken off our streets with a street value of $1.26 billion.
Some years ago, Federal Police intercepted a single boatload of heroin coming into Melbourne worth $300m.
Did this make a difference to the supply of heroin in Melbourne?
Of course not. The next boat just went a little bit faster to cash in on the rise of the price of heroin as result of the confiscation.
Now GST on this latest single import would amount to $126m. Which isn’t peanuts. It’s big bickies.
So here’s the plan. It comes in three stages.
The first is to legalise the sale of hard drugs.
The second is to give the government a monopoly on the production and sale of the these drugs by prescription and through pharmacies. Monopoly practice would also ensure standards of quality.
The third is to impose a GST on the sales. This would be in addition to the revenue flow the government would make from selling the drugs.
One of the reasons that the drug industry is so lucrative is that it is illegal. A government monopoly could lead to a significant reduction in the price of drugs and the end to illegal dealing.
It has been clear for decades that the so-called “war on drugs” has been dismal failure. It’s been a failure in terms of reducing drug use, but also because of the cost to wage this war ,but also because represents huge amount of revenue forgone by governments.
We need to face the fact that drug use will always be present in society and the best way to minimise the harm is to regulate the industry.
Given the timidity of the current leadership of our major political parties, it is unlikely that we will make progress on this.