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Brash-Report - No. 21, 26 November 2003

An Update From The National Party Leader

No. 21, 26 November 2003

26 November 2003

The Corrections Bill

The Corrections Bill that the Government is pushing through Parliament provides a graphic illustration of the difference between National's and Labour's political philosophies.

The Corrections Bill will ban private prison management, costing taxpayers millions.

It is one of the most dishonest, ideologically-motivated bills we have seen in recent times. It is a disgrace.

What is the Government's economic rationale for this? There is none. It is pure ideology, a sop to Labour's public service union friends, an insult to the taxpayer, and what looks like a calculated slight to the Maori groups which have supported the continued private management of the Auckland Central Remand Prison (ACRP) by the private prison management company, Australian Correctional Management.

My colleague Hon. Tony Ryall (MP for Bay of Plenty) is leading the attack by National on this legislation. As he stated recently: ?Labour's ideology will cost the taxpayers more than they need to pay. If public-private partnerships are fine for roads, then they should be fine for prisons.?

A report by the New Zealand Business Roundtable observed that the cost of keeping an inmate in a high-security prison run by the Corrections Department is $72,000 per year. By comparison, the cost of keeping inmates in Auckland's privately managed high security ACRP is $43,000 per year. Any rational taxpayer would take the low cost option.

The evidence also indicates that privately run prisons outperform government-run prisons. ACM's performance is monitored quarterly by the Department of Corrections, with performance fees paid to ACM if it meets all key performance indicators. ACM has received this fee in every quarter since it started operations.

This result is also consistent with the overwhelming international evidence that private prisons provide both lower costs and better service overall. ?Virtually all of the studies find private prison costs to be lower . . . on average between 5 and 15%?. The Roundtable study also revealed that privately run prison services tend to offer increased innovation, access to expertise, improved clarity and enhanced compatibility.

The Department of Corrections has, however, advised the Government that it could in future manage ACRP for a comparable or marginally lower level of costs than the private sector. We should be sceptical. 'they would say that wouldn't they?.

By contrast, the Treasury advice to the Government was that 'the ongoing costs for the (state) providers of services . . . are expected to exceed the current level of payment to the contract providers?. Indeed. Hope is unlikely to triumph over experience.

Why, then, is this Government moving back to the high-cost prisons? Might they be worried that New Zealand is getting ahead of the world, that privately run prisons may be too radical?

Hardly. About 50% of Australian prisons are now privately managed; private prisons are dominant in the United States; in Britain, the Blair Labour Government has decided that all new prisons are to be designed, built, financed and operated by private firms; and in Canada private sector management of prisons has been in place for some time. Only in New Zealand are we running backwards to the future.

There is a further angle to this saga. Official statistics show that 50% of prison inmates identify themselves as Maori, and Maori groups are particularly supportive of ACM 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 ACRP. He has stated that ?under the ACRP contract with a private provider, we have seen more progress and innovation in prison than we have seen in decades from the public prison service? and he considers that 'the ACRP is universally recognised as the most innovative, progressive and successful prison in the country?.

It is interesting, therefore, that Labour ? usually so keen not to offend Maori sensibilities ? is in this case prepared to stomp all over the strong support of Maori for the ACM management of ACRP. Catering to the interests of Labour's left-wing union friends in Wellington ranks well above Maori interests in this case.

So, this is a sad spectacle all round: irrational, ideological, blinkered, stubborn.

But not unusual.

Exactly the same attitudes have been on display as the Government moves to close hundreds of successful small schools servicing local communities: no parental choice, just compulsion.

These situations are all too typical.

National encourages competition and choice. Labour instead fosters a public sector monopoly.

Labour's approach increases costs. Multiply this sort of approach a thousand times ? which is what happens during a term of government ? and it becomes clear why your taxes keep rising, why essential services are chronically under-funded, and why it is so hard to get ahead in this country.

National intend to change all this.

National will emphasise commonsense over ideology as a guide to decision-making; the importance of choice within our institutions; the benefits of competition over state monopoly.

Don Brash

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