Economic Growth, Sustainability and Fiscal Responsibility
ALCP Shadow Budget May 2014 Kia Ora, I am pleased to announce the ALCP Shadow Budget for 2014. Not only does it show responsible spending and a focus on growth, it also paves the way for adding significantly to government revenue in the next three years. Cannabis and hemp are emerging as significant growth industries in the 21st century, with large amounts of historical knowledge available to draw on.
By far the biggest expenditure in the first year of our budget is a compensation package for all New Zealanders whose travel or employment prospects have been impacted by a cannabis conviction. $700 million is allocated for this. Another $140 million will be spent on clinical trials of medical cannabis and research scholarships for postgraduate students to study cannabinoids.
While prohibition of hemp, medical marijuana and recreational cannabis has significantly Hemp food in schools will be allocated $50 hindered research and development, ALCP million to provided free hemp milk and propolicy will regulate the market and seek to tein products to school children. right the wrongs of the previous century.
â€œALCP is the only party dedicated to maintaining economic growth while saving the environment, boosting government revenue and undermining organised crime; allowing new spending without cuts to existing government services.â€? - ALCP Leader Julian Crawford p.1
Affordable Hempcrete housing will be given a boost of $100 million to provide low cost or social housing that is warm, dry and ecofriendly.
allowing increased funding for social services and tax-cuts.
To get the industry off the ground subsidies will help hemp growers in the first few years Hemp farmers will be able to apply for subsi- of this budget. Once up and running the dies totaling $50 million. industry will compete globally but contribue revenue locally. A new regulatory authority to licence the commercial cultivation and sale of cannabis We will maintain $72 billion of existing will be set up at a cost of $10 million. spending, except for $200 million in the Law and Order budget, which was spent on cannaThe above spending outlined for our first bis prohibition. This money will be freed up year totals $1.05 billion. This new spending for real police work, rehabilitation and drug would be mainly covered by the $1 billion of education programmes. discretionary spending announced by Prime Minister John Key. If ALCP’s budget is implemented, all New Zealanders will be better off, while existing However, within three years our policy aims services are all maintained. Our policy comto add an additional $1 billion of revenue to bines economic growth with environmental the government annually. This would come sustainability. from taxes or excise duty paid on production, manufacture and retail of cannabis, medical We are dedicated to a future which empowers marijuana and hemp. Hemp products include New Zealanders and communities to achieve bio-fuels, hemp-crete, bio-plastics, healththeir true potential. foods and textiles. ALCP Economic Spokesman This means that after three years, spending Julian Crawford by ALCP would be outstripped by revenue, 13/05/14
2014 New Discretionary Spending:
• $140 million - Clinical trials for medical cannabis and research. • $700 million - Compensation for people with cannabis convictions. • $50 million - Hemp food in schools programme. • $100 million - Affordable hempcrete housing projects. • $10 million - New regulatory authority for cannabis licences. • $50 million - Subsidies to hemp farmers Total: $1.05 billion. p.2
Projected Budget Figures 2014 - 2017 Existing Government Spending ($ millions):
Maintain Existing Spending Reprioritise Law and Order
New Revenue from ALCP policy ($ millions): 2014
Hemp Medical Recreational
20 10 20
150 30 50
300 70 100
600 150 250
Total New Revenue
Medical Cannabis Compensation Hemp Food Hempcrete Housing Regulatory Authority Hemp Subsidies
140 700 50 100 10 50
100 300 50 100 10 50
100 0 50 100 10 50
50 0 50 50 10 25
Total New Spending
Discretionary Fund* ALCP Revenue
Combined Fund ALCP Spending
ALCP Spending Programme ($ millions):
Gains after spending ($ millions):
* New discretionary spending announced by Prime Minister John Key. p.3
The Net Gains row shows how much spare money will be available as a result of new revenue combined with the discretionary fund, after spending. This shows that ALCP policy would be a net positive for the governmentâ€™s books. While it would cost money from the discretionary fund to implement this policy, the fund would be replenished by 2016. ALCP spending starts at $1.05 billion but
decreases over the first three years. Revenue starts relatively small but increaces quickly over the same period to reach $1 billion annually. By 2018 all of ALCPâ€™s spending will be recovered by revenue. This allows for tax-cuts and funding boosts for public services in the medium term. ALCP supports the move towards surplus and paying down debt.
Medical Cannabinoid Research With $140 million allocated towards clinical trials and research, New Zealand will be able to get its medical cannabinoid industry off the ground. Postgraduate scientists will be able to apply for funding from a pool of $40 million to research the effects of cannabinoids. A further $100 million will be dedicated to p.4
establishing clinical and observational trials. Patients who are inerested in trying medical marijuana can choose to take part in the clinical trials. With the research and the trials, New Zealand companies will be able to put their products on the shelves in pharmacies and export them to the world.
Compensation for Cannabis Convictions The biggest spending project in this yearâ€™s ALCP shadow budget is the newly announced compensation package for people with cannabis convictions. Not everyone with a conviction will be eligible but if they can convice a panel of judges that their travel or employment has been impacted by a cannabis conviction, then they will be entitled to between $5,000 and
$100,000 compensation. This is to allow people to restore their careers and dignity and to be compensated for the stigma they suffered under prohibition. We have allocated $700 million towards this process. A Royal Commission of Inquiry will be set up to assess each claim on a case-bycase basis.
Hemp Food in Schools Programme Free hemp food in schools will be funded to the tune of $50 million in ALCPâ€™s budget. Hemp food is highly nutritious protein which is rich in Omega Essential oils. This policy is aimed at primary school children to improve their diets as a preventative healthcare measure. However, it could also be rolled out at secondary schools.
Hemp milk as well as cereals containing hemp seed would make an ideal breakfast for hungry students. The hemp food products are not psychoactive so there is no risk of children getting stoned off the food. However, Australasian food regulators are currently blocking the sale of hemp protein in New Zealand.
A New Regulatory Authority for Cannabis In our budget a new regulatory and licensing authority is established to oversee the implementation of ALCP policy.
a licence test, they will be able to engage in cannabis commerce within a strict set of regulations.
An annual allocation of $10 million will allow the authority to process applications to grow or sell cannabis.
These regulations will include age-limits, opening hours, locations of businesses, maximum supply levels, maximum sales amounts and wholesale terms.
The Authority would only be responsible for commercial scale operations. Any adult who wants to grow a small amount of cannabis at home will be able to do so without a licence. The authority will charge a fee for each licence they issue. Once a person has passed
Licence holders will be required to comply with tax obligations to ensure their cannabis related business contributes significantly to public revenue. Regulations will also prevent large corporations monopolising the market, ensuring a cottage industry approach. p.5
Affordable Hempcrete Housing In our budget $100 million is allocated to building affordable Hempcrete houses for low to middle income earners.
increasing house supply.
Hempcrete is described by designer Kevin McCloud as the best building material he has come across, particularly for its thermal insulation value.
New Zealand desperately needs new houses and by demonstrating the affordability of Hempcrete, we hope that more builders will turn to this material.
Hempcrete homes are warmer, dryer and healthier than regular homes and itâ€™s a nontoxic material for builders to work with.
All hemp for making the Hempcrete houses could be grown in New Zealand by farmers, helping create new employment opportunities.
Additional funding from investors and private sector groups would be sought to inHempcrete is a lightweight but strong version crease the availability of these houses. While of concrete which is made by mixing hemp they would be ideal for social housing they hurd, limestone and water. It has excellent could also be rented or sold to first home fire retardant properties. buyers.
With our $100 million dollar allocation, affordable Hempcrete houses can be built, taking the pressure off the housing market and p.6
New Zealand grown Hempcrete could also be exported around the world.
Subsidising the Hemp Industry A subsidy package totalling $50 million is announced as part of ALCPâ€™s budget. This is to help farmers make the transition to hemp and to get the industry off the ground. While hemp is a hugely viable crop, many hurdles remain for farmers to get into the industry. Subsidies will help hemp growers pay for licence fees, testing requirments and seed stock. This will help them get hemp growing without substantial personal risk. Once hemp growers are established in the industry they will no longer require subsidies and can start contributing to the economy.
used for skills training to increase the productivity of the hemp workforce. Another major barrier is access to adequate processing machinery for hemp. This fund will be used to buy machinery which can be shared by hemp farmers. Access to machinery will allow growers to refine their harvested hemp and add value to the product before selling it. Processed hemp materials are much more valuable than raw hemp. Hemp seed, hemp flowers, hemp fibre and hemp hurd will be the four main materials seperated during processing.
A number of new jobs can be created in the Additional equiptment will also be needed to hemp industry so some of the funding will be refine these materials into retail products.
Hemp for the Energy and Transport Sector The hemp industry will have an important role to play in the energy and transportation sectors. Hemp hurds can be heated in pyrolytic converters to produce charcoal, wood-gas and biofuel. Alternatively digesters can convert hempâ€™s cellulose into ethanol.
This makes hemp an attractive alternative to coal fueled powerstations. Fuels made from hemp could also run our cars, trucks, trains and buses. ALCPâ€™s aim is to develop the hemp industry in New Zealand so that all of our fuel needs can be produced locally.
Boost for the Tourism Sector ALCP policy will result in a significant boost to tourism.
made much of its revenue from foreign tourists. Colorado is also opening its market to tourists.
Already, states that have legalised cannabis for recreational purposes have seen growth in While New Zealand is geographically isotourism. lated it could gain a strategic advantage by making cannabis legal before other countries. The Netherlands has allowed cannabis to be sold in licenced venues for decades but has Hemp is vital to our clean-green branding.
References New Zealand Government Finances: Budget 2013 http://www.treasury.govt.nz/budget/2013
Uses of Cannabis and Hemp: The Emperor Wears no Clothes. By Jack Herer http://www.jackherer.com/thebook/
Cost of Prohibition: Business and Economic Research Size of Black Market: http://www.scribd.com/doc/100374182/ The cannabis black market and the case for BERL-2008-New-Zealand-Drug-Harm-Index the legalisation of cannabis in New Zealand http://tinyurl.com/676657p Review of Drug Laws: Law Commission Report Policy Model: http://www.lawcom.govt.nz/project/reviewALCP Policy misuse-drugs-act-1975?quicktabs_23=report http://www.alcp.org.nz/policy Authorised by C. Hawthorne, 66 David St, Dunedin.