Prisons are one taxpayer-funded service that each of us hopes never to personally use. However, we do hold certain expectations about the way they operate. We want the corrections service to contribute to reducing reoffending, and to humanely partition offenders from society. As taxpayers, we also expect value for money.

Value can come in different packages, as British prime minister Tony Blair has discovered. His administration has announced that all new prisons will be designed, constructed, managed and financed by the private sector. Prime minister Helen Clark once claimed that you couldn't put a cigarette paper between her government's policies and Blair's. This particular cigarette paper seems to have gone up in smoke.

There are more than 150 private prisons around the world. About 50 percent of Australian prisons are now privately managed, while in the United States private prisons are dominant and their share is growing. In Canada and South Africa , private sector management of prisons has been in place for some time.

Running against this international trend, our own government has introduced legislation to end New Zealand 's sole private prison management contract, and make it illegal for the private sector to run prisons. No groundswell of public support preceded the introduction of the legislation.

A private prison management company, Australasian Correctional Management (ACM), has had a contract to run Auckland Central Remand Prison (ACRP) since July 2000. ACM's contract expires in 2005. Under the proposed legislation, the state provider, the Department of Corrections, will become (once again) the monopoly provider of prison services.

Against this background, the New Zealand Business Roundtable commissioned a paper to explore the proposed legislation.

The report, by economist Phil Barry , found that New Zealand 's sole privately managed prison was cheaper to run than the state alternative. The cost of keeping an inmate in a high security prison run by the Corrections Department is $72,000 per year. The cost for a minimum security prison is $54,000. The cost for keeping inmates in Auckland 's high security privately run prison, the ACRP, is $43,000 per year. Treasury has told the government that the Corrections Department is unlikely to run the prison for a cheaper price.

If the privately managed prison is providing value for money, why end the contract? As Barry reports, there do not appear to be any claims that ACM has done a poor job. ACM's performance has been monitored quarterly by the Department of Corrections. Performance-linked fees are payable if ACM meets all key performance indicators. ACM has received a performance-linked fee in every quarter since it started.

Government statistics show that 50 percent of prison inmates identify themselves as Maori. Maori groups are particularly supportive of ACM, not because it runs a five star hotel, but because it has changed the prison culture. Te Warena Taua is a kaumatua from Te Kawerau a Maki, and chairs a group representing six iwi in a formal relationship with the management of ACM. He says that, "under the ACRP contract with a private provider, we have seen more progress and innovation in a prison that we have seen in decades from the public prison service". He considers that "the ACM is universally recognised as the most innovative, progressive and successful prison in the country".

New Zealand 's track record with prisons is not good. Our imprisonment rate is one of the highest in the world, and 80 percent of inmates released from prison are convicted of another offence within five years.

Because no other explanation fits, it seems that the decision to stop private management of prisons was ideological, and driven by the interests of public sector unions. The government's argument that the state has to run prisons is wrong, as the practice in other countries demonstrates. The state has to administer the justice system, but there are no constitutional or other barriers to outsourcing custodial or prison services.

Corrections minister Paul Swain professes to be business-friendly, yet he is persisting with a policy that reveals yet again the government's anti-private sector instincts and is against the interests of people whom the government claims to care about

Swain appears to be under the mistaken assumption that “public” and “publicly accountable” are the same thing. That is not so. Consider how little public accountability has traditionally emanated from our state-operated prison service.

International studies show that if private prisons are introduced into a regime of strong public accountability and competition in service delivery, they have the potential to improve the performance of the prison system as a whole.

This ideological decision means New Zealand will settle for a second-best prison service, without the accountability and efficiency that we could achieve.

For more information, contact:

Roger Kerr
Executive Director
Ph: 04 499 0790
Email: rkerr@nzbr.org.nz

David Young
Communications Manager
Ph: 04 499 0790
Email: dyoung@nzbr.org.nz

Web: www.nzbr.org.nz