A Treasury document estimating the Government could save more than $500 million a year by legalising cannabis ignored the human costs of prohibition, Act Party leader David Seymour says.
The estimate has sparked a fresh round of debate about decriminalising cannabis - with Mr Seymour and Green Party health spokesman Kevin Hague both sceptical of continued prohibition.
The document, released under the Official Information Act, shows brainstorming notes from 2013, which suggest the Government could earn $150 million annually from taxing legalised cannabis.
It also suggests that $400 million could be saved through reduced policing costs if the drug was legalised.
Seymour said the brainstorming exercise didn't factor in the considerable human cost of prohibition, such as the impact of imprisonment.
"If Treasury are going to calculate financial costs, Bill English should ask them to also quantify the health costs of prolonged cannabis use as well as the social outcomes of having thousands of New Zealanders, particularly Maori, removed from their families and the workforce through imprisonment."
Seymour said he wasn't prepared to call for decriminalisation, and said such a stance should be left to health experts, not politicians. More information would emerge from studies on overseas jurisdictions that had decriminalised cannabis to varying extents.
However, he was personally sceptical of the benefits of continuing to outlaw cannabis use.
"I suspect that it leads to a lot of harm, particularly to children and households that are sucked in to the lure of making money out of illegal drugs. And I suspect that it also trains people to become criminals, because there is money to be made by growing cannabis outside of the law."
Hague said his own view was that cannabis use should be legalised, but regulated. He had been heartened by the "big surge of public support for common sense reform".
The Government committed to review drug policy and make sure drug offending is primarily seen as a health matter, as part of the 2015-2020 National Drug Policy, which was launched in August last year.
Associate Health Minister Peter Dunne is overseeing that work, and has said the Government's approach to drug use would be informed by "compassion, innovation and proportion".
"Peter Dunne has been steering things in the right direction and I would welcome the opportunity to work with MPs from all parties on evidence-based change to the law. And then let's think about how best to use those windfall tax dollars, police time, space in prisons, etcetera," Hague said.
A spokesman for Dunne said he did not want to comment on the Treasury's "unsolicited and internally self-generated analysis".
The document, from 2013, was released to Nelson lawyer Sue Grey by the office of Finance Minister Bill English.
English said the brainstorm notes were merely a discussion, and were not official Treasury opinion.
The document states that policies "do not appear to be" effective at reducing the rate of illicit drug use.
The report references a Christchurch Health and Development study that found only six per cent of cannabis users came to police attention, and 95 per cent of users who were arrested continued with, or increased their use of the drug.
"Evidence doesn't support the 'Gateway Hypothesis' that cannabis use leads to use of harder drugs," the Treasury document states.
Grey said the document confirmed what was well-known in other sectors: that the harm caused by alcohol and tobacco was much worse than harm caused by cannabis.
The document also states that punitive approaches to drug use had "adverse social consequences," including a negative effect on earning potential, travel opportunities and social stigma.
Drug Foundation executive director Ross Bell said the reason there had been no action on the legalisation of cannabis was because politicians were too scared to talk about the "taboo" subject.
Bell said the Government should be willing to look at alternatives for New Zealand and admit, as the Treasury notes did, that the current system wasn't working.
He said the notes showed prohibition wasn't working, and cannabis was not a gateway drug.
Although politicians did not like talking about drug policy, they were now misreading the public mood and people were ready to have this discussion, Bell said.