Broken into two parts due to length (and make quoting somewhat easier).
Part 1/2, response to Polonius.
Anyways, let's consider what welfare actually is. If we define it as some sort of direct monetary payment by the government to a citizen, which of course is funded via taxation. Well then... How many Australian families receive the FTB? You'd be drug testing millions of people.
So wait a moment, you'd say. I'm only talking about those poor people, you know, the dirty stinky ones who're good-for-nothing lazy drug addicts! Uhm. Okay then.
Oh, and what about pensioners? Are we to drug test them as well? Ha.
We could broaden this even further. Welfare often refers to the deliverance of goods and/or services as well, such as food stamps or public housing to those who cannot afford them. Or education, yeah. I think we should drug test all parents with kids in the school system. Those lazy parents could be using their drug money to pay for their kids own education!
You seem to have fixated on a very minor point which I have already addressed:
Distinguishing between different groups is a matter of implementation. For example, I don't think there is any point applying this to disability-related support or pensions. On the other hand, youth allowance should definitely be subjected to drug testing above all other welfare (it is perhaps the most abused welfare of them all). The crux of the issue is what do we do with welfare abuse.
But for the sake of this argument, I shall define what I mean by welfare: a hand-out from the government to able-bodied people who are able to participate in full-time employment, which forms their main form of income.
Ooh, what about that student aid? Or that ridiculous HECS interest-free loan, on which the government basically loses money? Drug-test all university students! Surely you wouldn't want the government using your money to fund some drug addict's education. And I'm sure none of those university students have been smoking joints lately, right? 
HECS is different from youth allowance and the like, in the sense that it is an indexed loan and not cash in hand. Otherwise, I very much want to target student aid. It is perhaps the most highly abused welfare we have. Just because many students have taken drugs doesn't mean they ought to continue to do so.
Also, a possible straw-man or misinterpretation (I'll give you the benefit of the doubt), I have not said anything about a one-strike-and-out system. I haven't even talked about what actions should be taken afterwards (but I do touch on this briefly below).
So, a moment of seriousness. The vast majority of people you'd want to drug test, those lazy bummers on the dole, are actually simply the product of cyclical employment patterns. 90% of them will be working in a job sometime soon. Now some of those, y'know, might have had something to drink recently, or smoked cannabis, or maybe are even struggling with an addiction to a hard drug (tobacco?). That's not a reason to pull the plug on them, and restrict them from finding a job again.
You seem to have missed the point. I have no problems with supporting people to get back into employment. Most of the people using the system are not abusing it.
I do have a problem with:
- people abusing unemployment on a long term (rare)
- people, during a short unemployment period, abusing substances using the dole
Being 'humanitarian' in our policies does not excuse their actions. Perhaps the correct action is not pulling the plug completely, but there must be punishment. Perhaps such abuse may attract a fine payable in future employment, or perhaps welfare for this person moves to a HECS-like indexed, interest-free debt payable in future employment. The point is, it should not be excused.
Speaking of financial assistance, how about all those corporate tax breaks? I say we drug test them CEO's as well! They're probably all on coke, anyway.
Yes! Because the money they spend on the drugs does not go to the people living in Australia it's going somewhere else, the state is as well not getting the tax that it should get from the trade.
The consequence should be as abes proposed that they'd get a job allotted that most other citizens would not do, from that earned money they could get their drugs if they want to, because at least the earned money is getting taxed.
Right. What about all the (virtually) tax-free transactions corporations make? Fuck, if a company is registered outside of Australia it basically is not paying any tax at all.
1. Corporate tax breaks are applied to the company's balance sheets, not the CEO's personal income. CEOs can do whatever they want with their money, it is after-all their money.
2. Corporate tax breaks exist because it has been deemed better for the economy. It is not a matter of whether or not we are deriving tax from these trade, it's a matter of whether or not trade would even exist if these taxes are there. It is quite simply a different problem to the one at hand.
Though, your rebuttal does in large refute FlorianK's point.