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A call to cut back on charges for minor drug crime has been written off as giving offenders a "free life" by the Police Association.

A wide-ranging Law Commission review issued yesterday proposed a complete overhaul of the Misuse of Drugs Act 1975 which governs prosecution of drug offences in New Zealand.

It recommended issuing formal warnings to low level drug offenders instead of putting them through criminal courts, called for new laws regulating the production of drugs such as party pills, and a study into legalising cannabis for medicinal use.

Police Association president Greg O'Connor said letting low-level drug offenders off with a formal warning would encourage more young people to take up drugs.

"The problem with that is you are essentially giving people two lives. That's not going to disincentivise the people we don't want to take up drugs, which is the youth.

"I think you'd see more drug use. You're saying to them you get a free life on your first offence."

Road safety studies had shown people did not stop committing crimes until penalties were imposed, Mr O'Connor said.

"Warnings just don't have any effect. I don't see why it would be any different with drug offences."

Mr O'Connor agreed with the report's focus on health and drug demand reduction, but said any moves to divert drug offenders to rehabilitation services instead of the courts had to be balanced with beefed-up police powers.

Police should be empowered to force those they caught using drugs to get help, he said.

Law Commission president Grant Hammond said putting low-level drug offenders through the criminal courts is costly and causes "disproportionate" harm to those convicted.

"There are adverse social consequences from a distinctly punitive approach to lower level offending. Quite large numbers of young New Zealanders receive criminal convictions - which might subsist for life - as a result of minor drug offences. This is a disproportionate response to the harm those offences cause.

"More can be done through the criminal justice system to achieve better outcomes for those individuals and for society at large."

Associate health minister Peter Dunne welcomed the report - but said the Government needed time to consider its recommendations.

He agreed the Misuse of Drugs Act was outdated and deficient and needed changing.

"The existing Act fails to adequately address the rapidly expanding market for new psychoactive substances, such as party pills and smokeable products.

"We need a robust regime in place to prevent the easy availability of uncontrolled substances.

"The Law Commission was tasked with considering options for developing such a regime and I look forward to fully examining its recommendations and weighing up how to best provide a greater health focus and deal with drug addicts."

Key proposals in the report:

• A mandatory cautioning scheme for all personal possession and use offences that come to the attention of the police, removing minor drug offenders from the criminal justice system and providing greater opportunities for those in need of treatment to access it.

• A full scale review of the current drug classification system which is used to determine restrictiveness of controls and severity of penalties, addressing existing inconsistencies and focusing solely on assessing a drug's risk of harm, including social harm.

• Making separate funding available for the treatment of offenders through the justice sector to support courts when they impose rehabilitative sentences to address alcohol and drug dependence problems.

• Consideration of a pilot drug court, allowing the government to evaluate the cost-effectiveness of deferring sentencing of some offenders until they had undergone court-imposed alcohol and/or drug treatment.

Reaction to the review:
Green Party leader Metiria Turei:

"Current drug law is 35 years out-of-date and is hurting our families.

"Too many resources are directed into criminalising people rather than providing them with the medical help they most need.

"The Law Commission's report recognises this and seeks to redress it by adopting a harm reduction approach for dealing with personal drug use by adults.

"This new approach, if adopted, will actually save money enabling greater resources to be directed into health services for breaking the cycle of drug abuse and addiction. It will also free police to tackle more serious crime."

Family First director Bob McCoskrie:

"A weak-kneed approach to drug use will simply send all the wrong messages that small amounts of drug use or dealing aren't that big a deal - the completely wrong message, especially for younger people. A cautioning scheme will simply be held in contempt by users, and fails to acknowledge the harm done by drug use which is undetected.

"The report is correct to call for better treatment facilities for addiction and mental illness, but a zero-tolerance approach to the use of drugs combined with treatment options is a far better solution."