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Corrections in costings blow-out

Simon Power
National Party Law & Order Spokesman

26 December 2005

Corrections in costings blow-out

National’s Law & Order spokesman, Simon Power, says latest increases in future spending estimates by the Corrections Department indicate bad planning and a Minister who is having trouble coming to grips with his portfolio.

He is commenting on the December Economic and Fiscal Update (DEFU), which shows that the specific financial risks forecast for ‘Corrections - Capital Projects’ has doubled in the past six months.

“This is pretty amazing. It makes you wonder if they really have any idea what they are doing,” says Mr Power. “In six months the operating estimates have jumped by 156% and the capital estimates by 52%.

“This follows on from the recent spiralling cost of new prisons: Otago Region Corrections Facility cost jumped $13 million in a year, Springhill Prison cost rose from an original $184 million to $250 million, and the newly completed Ngawha Prison jumped from $40 million to $132 million.”

The Corrections Department fiscal update figures for 2005 were:

• May – Budget Economic and Fiscal Update (BEFU):

Operating: $92 million. Capital: $118 million.
• August – Pre-election Economic and Fiscal Update (PREFU):

Operating: $118 million. Capital: $124 million
• December – December Economic Fiscal Update (DEFU):

Operating: $236 million. Capital: $180 million.

The DEFU says the increase since the pre-election update reflects ‘revised inmate forecasts and construction costs’.

“Why have these costings changed so much in just six months? There have been no surprises. We have all known about the projected increase in the muster.

“There have got to be real concerns over Corrections’ planning, and about its leadership,” says Mr Power.

“So far Minister Damien O’Connor has been conspicuous by his silence on the troubles in his department. That has got to change very soon.”


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