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Costs of the 1996-1997 Buyback 

The amount usually quoted by Government sources is the amount paid in compensation to individuals.

This is not the full economic cost.  Any full accounting would include: 

CLASS welcome additional information to improve these estimates.

Economic Costs

 

 

 
Compensation to individuals

$319,833,727

  Hansard
Compensation to dealers

$65,000,000

  Est - secret
Government publicity

$7,000,000

  Estimated
Total Federal Government Spend 

$455,000,000

 $45M remained of levy (Howard 2002)

Federal Government Tax

$500,000,000

Hansard - Planned figure, not actual

Unaccounted for:

$66,126,273

  Incomplete data, not fraud!
Cost imposed on State Governments    
Time of police – 2hrs/gun owner @ $20/hr

$51,000,000

  Estimate
Develop Registry where not operating

$5,000,000

  Estimate
     
Costs Imposed on Ordinary Australians    
Uncompensated Dealer Losses

$65,000,000

Loss of trade - est only.         Confidentiality agreement prevents dealers providing data.

Time of gun owners – 8 hrs/owner @$20/hr

$136,000,000

  Estimate basis below
Cost to owners - Licence fees

$55,250,000

  Estimate basis below
Cost to owners - firearm security measures

$403,750,000

  Estimate basis below
Uncompensated surrenders

$79,958,432

25% of compensated surrenders

Total Cost to Australians

$795,958,432

Apart from the Medicare Levy of $500M.

No of licenced owners

850,000

  News reports to be verified
Police time to Process New Licence

3

  hrs
Cost of Police time

20

  $/hr
Owner Time spent in compliance and training courses

8

  hrs
Cost of Owner time to economy

20

 $/hr
Cost of added safe/alarm average

475

 $/owner
Fee for original licence

65

 $/owner

Social Costs

·      Taxpayer households paid $500,000,000 in Buyback levy and therefore lost this economic value.  It might be double counting to include it above, but each Australian had a reduced standard of living to pay the above costs.           

·    A large number of firearm dealers were financially destroyed.  Compensation was seriously delayed  and for stock at cost only, not damage to trade.  Dealers were forced to sign confidentiality agreements, and though they feel betrayed, they are honouring their own commitment.

·   Reduced value of recreation as people leave the sport.  Indicated in dealer turnover dropping 50%.   In dollar terms possibly personal spending is redirected to other recreation or housing.

·   40% to 60% of semi-autos not handed in (AIC estimate) suggested 200,000 to 300,000 owners engaged in civil disobedience despite threats of 7-14 years jail – more jail than for committing murder. 

·    A few dealers and shooters discovered loopholes in State laws and actively moved a very large number  of guns onto the black market.   This  civil disobedience may be partly motivated by the destruction of dealer income, but also a response to politicised contempt in the public debate.

·      There has been a substantial increase in black market activity, probably related to the rising illegal drug culture.  High prices are created partly by tough enforcement, and motivate continuing thefts from legitimate owners, dealers, security firms and government bodies.

·      The  shooting community is now heavily politicised but has no clear voting choice.  A policy to ‘put the sitting member last’ has increased uncertainty in elections.  Shooters votes contributed to the initial success of One Nation and the ejection of state Liberal governments. 

Opportunity Cost

If Australia had raised that money for investment in bettering our society, what might we have done with it?  For the economic value destroyed in the buyback, $43,000,000 for every victim of the Port Arthur massacre, Australia could have:

 ·      Spent $100 million or so  on diverse violence prevention programs that benefit-cost analysis has shown return 1.25 to 7 times their cost to the community, thus making a profit for the community in reduced violence. AND

·      Developed effective media guidelines to reduce copycat crimes and suicides. AND

·      Given gun safety, behaviour modelling and anti-violence training to every one of our schoolchildren AND

·      Bought every gun owner in Australia a safe, and given each one a week of commercial-price training and a psychological evaluation.  

In violence prevention, there are many valuable ideas neglected because public money is reactively pushed to ‘more police on the beat’ or ‘less guns’.   Evidence and common sense are defeated by  political forces which act on emotion and self-interest in media players and politicians.