Cost benefit analysis of legislation to mandate the supply of opal fuel in regions of Australia: final report
Issue: Vol 10 No 2, April 2010 - June 2010
Related to Policies Remote Volatile substance use
South Australian Centre for Economic Studies (2010)
Cost benefit analysis of legislation to mandate the supply of opal fuel in regions of Australia: final report.
Adelaide: Australian Government Department of Health and Ageing
The South Australian Centre for Economic Studies (SACES) was commissioned by the Department of Health and Ageing (DOHA) to investigate legislative options and to undertake a cost benefit analysis to mandate the supply of Opal fuel in regions of Australia. The SACES report follows an investigation by the Senate Standing Committee on Community Affairs into the impact of the Petrol Sniffing Strategy introduced in 2005. The Committee determined that while the introduction of Opal fuel under the Petrol Sniffing Strategy had been effective in reducing petrol sniffing, in the absence of voluntary agreement on the part of all relevant stations the Australian Government should draft legislation to mandate the supply of Opal in the Petrol sniffing strategy zone.
SACES found that the Commonwealth probably has the power to legislate to establish a ban on regular unleaded petrol (RULP) in prescribed areas accompanied by the provision of subsidised Opal (without an explicit compulsion to stock Opal). The sale of premium unleaded petrol (PULP) would be controlled where necessary by a Minister should it come to be seen as a contributor to sniffing. Importantly, the scheme outlined also allows a Minister to grant exemptions to a ban or controls where appropriate. Where potential gaps in the scope of the Commonwealth legislation exist, relevant States could refer powers to the Commonwealth.
The SACES report identified three scenarios: the Central scenario based on an 80% reduction in sniffing; the High impact scenario based on an erosion of voluntary Opal supply; and the Diversion scenario based on inhalant substitution. SACES found that under all three scenarios the benefits of mandating the supply of Opal outweighed the costs. Further, in the Analysis Area excluding Darwin (Darwin is not considered to have a petrol sniffing problem) the surplus of benefits over costs are greater. While regional variation in the benefits over costs exists in the Central scenario, all regions return benefits over costs.
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