Economic impacts

The use of alcohol and other drugs has a number of economic impacts relating to household expenditure, decreased productivity and healthcare and law enforcement costs. 

The most comprehensive data from 2004–05 showed that alcohol and other drug use was estimated to cost Australian society $55.2 billion (Figure IMPACT7). This includes costs to the health and hospitals system, alcohol and other drug attributable crime costs, lost workplace productivity and road accidents (Collins and Lapsley 2008).

The human cost of drug abuse in 2011 was estimated to be nearly $3.2 billion. This included costs associated with illicit drug deaths, medical costs of hospitalisation, drug treatment costs, pharmacotherapeutic treatment and lost productivity (Smith et al. 2014).

The separate costs of tobacco, methamphetamine and alcohol use in Australia have also been estimated in more recent years.

The estimated social cost for tobacco use in 2015-16 was $136.9 billion. While, this is substantially higher than the previous national estimate of $31.5 billion in 2004–05 (Collins and Lapsley, 2008), the difference is likely to be primarily due to differences in the approaches used to determine the estimates (Whetton et al. 2019). The most significant costs were related to the value of life lost, and pain and suffering caused by smoking attributable ill–health and premature mortality, spending on tobacco by dependent smokers, workplace costs and the reduction in economic output due to premature mortality (Whetton et al. 2019).

The estimated social cost attributable to methamphetamine use in 2013-14 was just over $5 billion dollars. This included costs associated with a range of domains including: prevention, harm reduction and treatment; health care; premature mortality; crime; child maltreatment and protection; workplace accidents and productivity (Whetton et al. 2016).

The social costs of alcohol misuse in Australia in 2010 was estimated to be $14.35 billion. The highest costs were associated with productivity losses (42.1%), traffic accidents (25.5%) and cost to the criminal justice system (20.6%) (Manning, Smith & Mazerolle 2013).

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Household expenditure

Data from the ABS indicate that the proportion of household expenditure on alcohol and tobacco use has decreased over time.

  • The proportion of household expenditure on alcohol in 2015–16 was 2.2%, down from 3.4% in 1984.
  • The proportion of household expenditure on tobacco products has also decreased in 2015–16 to 0.9%, down from 1.6% in 1984 (Table S1.26).
  • The proportion of household expenditure on alcohol and tobacco varied by main source of income.
    • Households with the main income source as employee income spent a higher proportion on alcoholic beverages (2.3%) compared to those households with a main source of income as government pensions and allowances (1.8%).
    • However, households where the main source of income was government pensions and allowances had a higher proportion of household expenditure on tobacco (1.7%) compared to those households with the main source of income from employee income (0.8%) (ABS 2017).

Decreased productivity

In 2016, almost 2 in 5 (38%) employed people reported missing at least 1 day of work in the previous 3 months due to illness or injury (regardless of drug use) (Table S1.27). Overall, 1.9% of recent illicit drug users missed 1 day of work in the last 3 months due to their drug use, with recent meth/amphetamines users (7.8%) and ecstasy users (6.2%) more likely to report that they had missed work than cannabis and pain-killer/opiate users.

References

ABS (Australian Bureau of Statistics) 2017. Household Expenditure Survey, Australia: Summary of Results, 2015-16. ABS cat. no. 6530.0. Canberra: ABS. Viewed 4 January 2018.

Collins DJ & Lapsley HM 2008. The costs of tobacco, alcohol and illicit drug abuse to Australian society in 2004/05. National Drug Strategy Monograph Series No. 64.

Manning M, Smith C & Mazerolle P 2013. The societal costs of alcohol misuse in Australia. Trends & issues in crime and criminal justice No. 454. Canberra: Australian Institute of Criminology. Viewed 4 April 2018.

Smith RG, Jorna P, Sweeney J & Fuller G 2014. Counting the costs of crime in Australia: a 2011 estimate. Research and Public Policy Series. No. 129. Canberra: Australian Institute of Criminology. Viewed 1 February 2018.

Whetton S, Shanahan M, Cartwright K, Duraisingam V, Ferrante A, Gray D, Kaye S, Kostadinov V, McKetin R, Pidd K, Roche A, Tait R, Allsop S 2016. The social costs of methamphetamine in Australia 2013/14. National Drug Research Institute, Curtin University, Perth, Western Australia.

Whetton S, Tait R, Scollo M, Banks E, Chapman J, Dey T, Abdul Halim S, Makate M, McEntee A, Muhktar A, Norman R, Pidd K 2019. Identifying the Social Costs of Tobacco Use to Australia in 2015/16. National Drug Research Institute, Curtin University, Perth, Western Australia. Viewed 22 October 2019.