Is $12 billion a year being sent overseas for drugs?

According to a report in The Age,

The Australian Crime Commission’s estimates suggest authorities are drastically underestimating the quantity of drugs crossing the nation’s borders without detection.

“The estimates at the moment range between $4 billion and $12 billion a year. We are not saying at the moment which end of the scale is right or wrong, but what we are saying is it is significant,” [ACC chief executive] Mr Milroy said.

The most recent official estimate, for 2004, put the figure at $382 million.

$12 billion seems rather a lot for the nation’s drug users to be sending overseas. Doing a quick calculation based on the AIHW drug survey it amounts to about $4,200 per drug user.

But by far the most common illicit drug is cannibas, which is not a big import. Another Australian Crime Commission report says that low prices and plentiful local supply mean that it is not attractive to drug importers.

If we restrict the user pool to other drugs, $12 billion means about $9,000 per drug user (though presumably some people appear several times in the separate numbers for each drug).

I suppose that is possible, but the most common of the other drugs, ecstasy, costs only $30-$40 a pill, and for many people is an occasional party drug, not something they need every day.

I won’t give this number the dubious research category yet, but the range of between $4 billion a year and three times that amount suggests that at minimum this is a very premature release of the results.

4 thoughts on “Is $12 billion a year being sent overseas for drugs?

  1. Andrew, I think these figures don’t pass the ‘smell’ test. At the top end of the scale suggested drug imports are way larger than Australia’s food import bill which were about $6.8 billion in 2005/06.

    The drug abuse treatment sites I read have pounced on these figures as indications Australia is loosing the ‘war on drugs’ so legalisation is a preferred alternative. I assume this reaction partly drove the initially high estimates as well as the usual motivations for extra funding.

    BTW the figures are quoted in a way that propound the mercantilist myth that suggests the dollar amount of imports is a pure loss to the economy. That is false =to the extent that there are gains from trading anything. The loss is not the scale of imports but the damage caused by drugs and the costs of controlling illicit drug use.

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  2. I think that’s surely wrong. The police estimate that around 100,000 ecstasy pills are taken each weekend (5 million per year). For example:

    http://www.theage.com.au/news/national/ecstasy-a-home-brew-to-die-for/2007/01/06/1167777325082.html.

    Even if they were fully imported, and $20 each filtered back overseas (which seems unlikely given their price), you would only get to 100 million. If you optimistically double that for ice etc. (again some of which is made in Australia), you only end up at 200 million. You could add heroin to that. Let’s see we have .5% of the population addicted (100,000 addicts) and they cause $2000 per week of money to go back overseas. That only gets 200 million more.
    So the even with high assumptions I only get to about 400 million.

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  3. Over many years experience I always assume “drugs worth xxx$m were siezed” is always absolute bullshit – pick a figure – a large one – and boost it by 10. I can’t see any reason not top treat this latest PR piece any differently.

    There might well be lots of shonky $ going overseas but it’s just as likely to come from the usual suspects – cash businesses that can hide income – cafes, hairdressers, loan sharks, car re-builders, etc.

    Still theres lots of careers and mortgages and super built on continuing and justifying the WAR ON DRUGS. Hell even harry has an interest. How much did you remit overseas this year harry? And are universities still paying academics in used $50s in brown paper bags?

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