Heroin Policy Alternatives for Australia: an Economic Discussion*

Abstract

Abstract: This paper analyses three policy alternatives for the regulation of heroin in Australia: the present system of total prohibition, a heroin maintenance program or a free availability model. If the population of heroin users consists only of dependent persons, then the policy option of free availability of heroin, advocated by some, may be a workable alternative to the present position. Research evidence suggests that the demand for heroin is not fixed and therefore a fall in the price will induce present users to consume larger quantities of heroin and encourage new users. The present system has both costs and benefits for the community. Major costs include property theft and the loss from taxation used to fund government services. It is the author's view that if a shift in current policy is to occur it should be in the direction of a heroin maintenance program, not towards a free availability model. However, as there is little advantage in using heroin over methadone in a maintenance program, then any large scale maintenance program should use methadone and not heroin.