"It will be an option for offenders, including recidivist drink-drivers, who plead guilty to an offence where alcohol or drugs have been a contributing factor, and where there is a serious penalty, such as a term of imprisonment of up to 3 years.''
The scheme will attempt to engage offenders before, rather than after, sentencing. They would get an individual treatment plan involving frequent intervention and mandatory drug tests.
Offenders' success at working through a programme would be taken into account at sentencing.
The money is part of a $10m investment that includes:
* $1m to increase the use of alcohol screening and brief interventions across settings such as primary health care, accident and emergency, youth health centres, school counselling services, district courts and prisons
* $2m to deliver nationally-consistent, enhanced youth alcohol and drug services which could reach an additional 2000 young people a year
* $1m for programmes for drink-drivers, which could achieve a reduction of up to 9 per in repeat drink driving for 1400 drink-drivers a year
* $3.5m for low-cost, high-volume community-based treatment for offenders with mild to moderate alcohol and drug problems. Interventions could reach an additional 5800 offenders a year
* $500,000 for training and workforce development for more than 500 frontline personnel a year.
"Alcohol and drug abuse are major drivers of crime, with two-thirds of offenders who enter prison having dependency issues,'' Mr Power said.
Drug courts have had dramatic results overseas. A 2006 study in the United States and Canada showed they reduced crime rates by between 8 and 26 per cent, and a 2008 study in New South Wales found offenders were 38 per cent less likely to be re-convicted of a drug offence.