The Therapeutic Goods Administration may reschedule MDMA and psilocybin from prohibited drugs to controlled drugs.
The Former Chief of Defence said the change would allow psychedelic drugs to be used to treat post-traumatic stress disorder and depression.
Retired admiral Chris Barrie said if the drugs were downgraded they could be used to expand research.
The retiree said, "The evidence is that those psychedelics are much more effective than any of the pills you might be prescribed. Some experts who are working in the field have told me the only way we'll ever get a cure for post-traumatic stress disorder is by the use of psychedelics."