AGSM 2009 - Business bears majority of burden of illicit drug use

The Australian business sector bears a larger share of the social costs associated with illicit and illegal drug use than does government, according to a new report.

Professor Robert Marks from Economics at the Australian School of Business™, along with Adjunct Professor David Collins (Macquarie University) and Associate Professor Helen Lapsley (University of Queensland) launched the report at an Australian Drug Law Reform Foundation event yesterday.

Professor Marks said: “Illicit and illegal drug use costs Australian business approximately $3 billion per year, or two per cent of total company profits. Losses occur through lower productivity, employee absenteeism, motor vehicle accident costs and a reduced workforce. This is in contrast to the costs to government and individuals, each at $1.7 billion.

“This report emphasises the need for both business and the Australian government to properly address the problem of illicit drug use", said Professor Marks.

Photo: Professor Robert Marks

“The total cost to the Australian economy as a whole is at least $6.7 billion. There is a direct link between illicit drug use, and the level of business profitability and output,” Professor Marks said.

The report also suggests illegal drug use diverts $9 billion from the legal economy in spending in the illegal industry.

“This report emphasises the need for both business and the Australian government to properly address the problem of illicit drug use - specifically its impact on profitability as well as the economy,” said Professor Marks.

“The purpose of the report was to involve business in the debate around drug law reform by alerting business to these unrecognized costs associated with the current regime,” said Professor Marks.

Professor Marks's report