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Economics on private prisons don’t add up

Written By: - Date published: 2:03 pm, May 11th, 2010 - 15 comments
Categories: prisons - Tags: ,

National is pushing ahead with its ideologically-driven plan to privatise prisons.

You know, I don’t think that the Left should argue against private prisons on the grounds that imprisonment should be a core public function, or that privatisation is just about ‘cost-cutting’. The argument against privatisation that will work, because it’s true, is that private prisons cost more.

We know that the last time Auckland Remand was privatised it didn’t save money. It cost $66,000 a year to imprison someone in Auckland remand vs $49,000 for a publicly-run equivalent. Remember, this was the Aussie private prison industry’s loss-leader!

Pro-privatisers can only vaguely claim that privatisation magically brings in new ideas that, for unexplained reasons, can’t be emulated by the public sector. The record proves them wrong. And so does common sense. You add the need for the provider to make a profit and you’ve got to increase the cost.

Any sensible economic analysis will tell the government that this is not a money saver, it’s a gift to the private prison industry, but they don’t care – they aren’t governing in the interests of New Zealand, they’re governing to give kick backs to their private sector backers.

15 comments on “Economics on private prisons don’t add up ”

  1. ghostwhowalksnz 1

    Pravadblog is saying private prosecution services mean its OK for private firms to run prisons.
    But of course the judges are not private, they are the ones who decide the guilt or innocence , when no jury is involved and the sentence
    And remember that prisons serve a judicial function for their prisoners, since there are many infractions of prison rules, that can be punished by summary judgement by the prison management.

  2. Lanthanide 2

    I think the only thing going for private prisons is the possibility for more culturally targeted rehabilitation programmes. Like send all people of a specific ethnicity to this specific private prison where they get programmes that are more likely to help them out than a ‘general’ prison would. Although there’s nothing stopping public prisons from having similar systems set up, for some reason this never seems to actually materialise? It could simply be that this sort of targeted programme costs more to run and so the public prisons, charged with lowering costs as much as possible, simply can’t offer it.

    I’m pretty ignorant about prisons and what programmes are being run at the moment, so it’s entirely possible that this sort of thing is already going on with public prisons.

  3. Rex Widerstrom 4

    Pro-privatisers can only vaguely claim that privatisation magically brings in new ideas that, for unexplained reasons, can’t be emulated by the public sector.

    Do I have to, yet again, link to the independent reports by the Inspector of Custodial Services, that shows WA’s private prison – now it’s run by someone other than Wackenhutt / G4S / AIMS or whaetevr their disguise-of-the-day is – is performing many functions better than the state-run equivalets? Or mention again that prisoners are queueing up to transfer there?

    Nah, I’ve done it before and you still repeat these broad-brush assertions, so I think I’ll stop bothering.

    You add the need for the provider to make a profit and you’ve got to increase the cost.

    *sigh* No, you tie the profit to the achievment of positive performance indicators: everything from low escapes to low numbers of complaints by prisoners to, best of all, low recidivism by released inmates and you have the potential to create an excellent prison (albeit that that’s something of an oxymoron).

    Because you don’t have those levers to pull with a state prison, beause you’re dealing with Barry “I’m never responsible for the screwups that just happen to occur on my watch” Matthews, you can’t do a damn thing to improve conditions for the people held in them. Believe me, I’ve worn myself out trying.

  4. ghostwhowalksnz 5

    Rex , have you heard of private offshore drilling wells. They Just have to provide better outcomes except when they really screw up. Heard of XT network?
    I would like to see private probation services , where a well funded management could make a difference, not running a service which is at the bottom end of the so called enterprenurial scale.

    Of course the funding for National party , which has dropped totally off the radar the last year wouldnt have anything to do with their decision.

    • Rex Widerstrom 5.1

      GWW – there’s a lot of private well drillers and telecommunications network operators who don’t screw up (Optus seems to manage without any of the drama and failure of Telstra)… so what’s your point?

      Are you trying to tell me a Corrections Department, headed by the notorious Barry Matthews, doesn’t make mistakes?

      I have no idea what the government’s agreement over the last prison contained (and in event event GEO / G4S / Wackenhutt wouldn’t even be on my list of possible operators) but ones of the reasons private prisons might be more expensive per head than state prisons, for instance, is that smart governments negotiate a “trailing commission” with the operators, paying them for each year a former inmate stays out of trouble.

      That has seen private prison operators not only vastly improve the quality and availability of rehabilitation programs in jails, but also move into helping released prisoners with housing, jobs and welfare.

      Whereas Matthews and his administration have no such incentive. No matter how big a screw up that man makes of everything he touches, he keeps his job.

      I know which one I’d rather have running any prison I, or anyone I cared about, was sent to.

    • seth 5.2

      Thats an extremely poor strawman position, couldn’t you have at least come up with something better than that?

      So let me get this right…….because the XT network has failed that means private prisons won’t work, even though Rex has just pointed out a fabulously successful one in Australia.

      • lprent 5.2.1

        Much as I respect Rex, it is just as easy to point to piss-poor ones that warehouse inmates like some kind of inventory, and who bride legislators to keep feeding them more units. Try Florida, I seem to remember writing a post about it last week.

        For that matter, as I remember this post, its main concern was about the higher costs per prisoner for taxpayers in private prisons. The point of the post was that if you fed the same amounts of money per prisoner to the existing public prisons to try and reduce the rate of recidivism, wouldn’t you also get better outcomes?

        Incidentally if you look at Florida’s private prisions, you’d swear that they’re trying to get people to reoffend for exactly the reasons that the XT network crapped out. Telecom accurately calculated the demand, and then installed insufficient capacity to met it – this was probably done to reduce costs and thereby increase profits. Just like a lot of the private prison systems I’ve been looking at.

        Really if you’re going to hop in here and sprout troll style lines, then at least do it intelligently – you’d then get some debate rather than having me simply call you a bit of an idiot dipshit.

        • Rex Widerstrom 5.2.1.1

          I agree it’s easy to point to bad prisons, LP. Shocking ones… ones that, if they were mirrored in NZ, I’d be involved in protesting against in any way I could. The common thread between them seems to be the company that manages them… the very same company that “Crusher” seems to be tripping over herself to provide with front running in NZ.

          If they get to run NZ’s prisons then it will be a tragedy. But equally, there’s private operators who’ve proven their ability to run prisons better than the state. Certainly better than any department run by Barry Matthews could ever manage, despite my respect for the officers at the coalface.

          So why not just put any ideology aside and choose the solution that’s best for society (in terms of reduced recidiviam) and for the inmates? That’s not most private prisons, I agree. But nor is it most state run prisons.

          To suggest otherwise seems to me to be the equivalent of saying “many cars have an appalling safety rating. Therefore the only sensible option is to buy a bicycle”. Why not dispassionately check the history of each, and choose the one that performs the best?

          • Draco T Bastard 5.2.1.1.1

            If the state puts in the same incentives for state run prisons that you’re on about for private run prisons then the state run prison would invariably cost less because it wouldn’t have the deadweight loss of profit. No matter what happens, running the prisons will cost a minimum amount and no amount of privatisation can reduce that. But, as private systems need to make a profit, they can, and will, cost more.

            • Rex Widerstrom 5.2.1.1.1.1

              I agree completely. But surely you’re not suggesting paying public servants based on measurable outcomes?!!

              Have you told the teachers’ unions of this sudden conversion? 😛

              Seriously though, if I thought for a millisecond I had a hope of successfully advocating that Barry Matthews and his senior management are paid on outcomes like lack of recidivism then that’s the line I’d be pushing.

              For me personally it’d be a win / win – either recidivism rates would plummet or (more likely, IMO) he’d end up paying the government for the privilege of coming to work.

  5. marsman 6

    Get Dick Cheney’s outfit to run our prisons? Why not, we already have George W as a PM.

  6. marsman 7

    Get Dick Cheney’s mob to run our prisons? Why not,we’ve already got a George W. as PM.

  7. JJ 8

    The prison in question is currently publicly run, thuswe know exactly what the current cost per head is and we can quantify the quality of service provided.
    With this knowledge in hand, the government can run the tendering process with this in mind. If the tendering process produces an insufficenet discount to current operating costs, the government can decline the received offer. All contracts will no doubt be fixed term, fixed price. It is quite impossible for private management to cost more than public management in this situation, unless you are suggesting the government will consider paying more than the current price? Perhaps they will conspire to inflate the apparent costs of public management. After all this is a “NAct” government, and thus cannot be trusted.

    Your post is as sensible, insightful, and balanced as always, Marty G.

  8. gingercrush 9

    One does have to laugh at Corrections Association who are all in a blather because Private Prisons (I assume in Australia) provide Televisions and this makes the prisoners happy and other prisoners from other prisons want to come to the private prison. I mean seriously. If you have happy prisoners that leads to less crime and less offences in Prison surely that is a good thing? No not to the idiotic Corrections Association. What a joke.

    And I love how the left play the “Ooh lets provide something private that has failed” logic shit. Basically our current prisons have failed. And as for Labour and their tripe press release, “Ideology leading Government by the nose”. Have a look in the mirror Clayton Cosgrove. Your ideology is fail because its the same bullshit we’ve had for years.

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    Shortly, the absolute state of Wayne Brown. But before that, something I wrote four years ago for the council’s own media machine. It was a day-in-the-life profile of their many and varied and quite possibly unnoticed vital services. We went all over Auckland in 48 hours for the story, the ...
    More than a fieldingBy David Slack
    5 days ago
  • 2023 More Reading: January (+ Old Phuul Update)
    Completed reads for January Lilith, by George MacDonald The Rime of the Ancient Mariner (poem), by Samuel Taylor Coleridge Christabel (poem), by Samuel Taylor Coleridge The Saga of Ragnar Lodbrok, by Anonymous The Lay of Kraka (poem), by Anonymous 1066 and All That, by W.C. Sellar and R.J. ...
    5 days ago
  • Is Britain doomed (again)?
    Pity the poor Brits.  They just can’t catch a break. After years of reporting of lying Boris Johnson, a change to a less colourful PM in Rishi Sunak has resulted in a smooth media pivot to an end-of-empire narrative.  The New York Times, no less, amplifies suggestions that Blighty ...
    Point of OrderBy xtrdnry
    5 days ago
  • After The Deluge.
    On that day all the springs of the great deep burst forth, and the floodgates of the heavens were opened. And rain fell on the earth.Genesis 6:11-12THE TORRENTIAL DOWNPOURS that dumped a record-breaking amount of rain on Auckland this anniversary weekend will reoccur with ever-increasing frequency. The planet’s atmosphere is ...
    5 days ago
  • Minister of Education (who might be replaced later today) left it to his ministry to apologise for i...
    Buzz from the Beehive There has been plenty to keep the relevant Ministers busy in flood-stricken Auckland over the past day or two. But New Zealand, last time we looked, extends north of Auckland into Northland and south of the Bombay Hills all the way to the bottom of the ...
    Point of OrderBy Bob Edlin
    5 days ago
  • The other ‘big one’: How a megaflood could swamp California’s Central Valley
    This is a re-post from Yale Climate Connections by Jeff Masters When early settlers came to the confluence of the Sacramento and American Rivers before the California Gold Rush, Indigenous people warned them that the Sacramento Valley could become an inland sea when great winter rains came. The storytellers described water filling the ...
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  • Tuesday's pick o' the links: Wayne Brown's WTF moment
    Wayne Brown managed a smile when meeting with Remuera residents, but he was grumpy about having to deal with “media drongos”. Photo: Lynn Grieveson/Getty ImagesTLDR: In my pick of the news links found in my rounds since 4am for paying subscribers below the paywall:Wayne Brown moans about the media and ...
    The KakaBy Bernard Hickey
    5 days ago
  • Tuesday's pick o' the links: Wayne Brown's WTF moment
    Wayne Brown managed a smile when meeting with Remuera residents, but he was grumpy about having to deal with “media drongos”. Photo: Lynn Grieveson/Getty ImagesTLDR: In my pick of the news links found in my rounds since 4am for paying subscribers below the paywall:Wayne Brown moans about the media and ...
    The KakaBy Bernard Hickey
    5 days ago
  • Bryce Edwards’ Political Roundup: The gamechanger PM and polls
    Dr Bryce Edwards writes –  Last night’s opinion polls answered the big question of whether a switch of prime minister would really be a gamechanger for election year. The 1News and Newshub polls released at 6pm gave the same response: the shift from Jacinda Ardern to Chris Hipkins ...
    Point of OrderBy poonzteam5443
    6 days ago
  • Dawn Chorus: Why 2023 will be a year of indecision & delay
    Hipkins’ aim this year will be to present a ‘low target’ for those seeking to attack Labour’s policies and spending. Photo: Lynn Grieveson/Getty ImagesTLDR: Anyone dealing with Government departments and councils who wants some sort of big or long-term decision out of officials or politicians this year should brace for ...
    The KakaBy Bernard Hickey
    6 days ago
  • Dawn Chorus: Why 2023 will be a year of indecision & delay
    Hipkins’ aim this year will be to present a ‘low target’ for those seeking to attack Labour’s policies and spending. Photo: Lynn Grieveson/Getty ImagesTLDR: Anyone dealing with Government departments and councils who wants some sort of big or long-term decision out of officials or politicians this year should brace for ...
    The KakaBy Bernard Hickey
    6 days ago
  • Bryce Edwards: The Gamechanger PM and polls
    Last night’s opinion polls answered the big question of whether a switch of prime minister would really be a gamechanger for election year. The 1News and Newshub polls released at 6pm gave the same response: the shift from Jacinda Ardern to Chris Hipkins has changed everything, and Labour is back ...
    Democracy ProjectBy bryce.edwards
    6 days ago
  • After the deluge – initial thoughts on the Auckland floods
    Over the last few years, it’s seemed like city after city around the world has become subject to extreme flooding events that have been made worse by impacts from climate change. We’ve highlighted many of them in our Weekly Roundup series. Sadly, over the last few days it’s been Auckland’s ...
    6 days ago
  • Ever Get the Feeling You've Been Cheated?
    And so the first month of the year draws to a close. It rained in Auckland on 21 out of the 31 days in January. Feels like summer never really happened this year. It’s actually hard to believe there were 10 days that it didn’t rain. Was it any better where ...
    Nick’s KōreroBy Nick Rockel
    6 days ago
  • Ani O’Brien: Luxon can’t afford to continue ‘small target’ politics
    A ‘small target’ strategy is not going to cut it anymore if National want to win the upcoming election. The game has changed and the game plan needs to change as well. Jacinda Ardern’s abrupt departure from the 9th floor has the potential to derail what looked to be an ...
    Democracy ProjectBy bryce.edwards
    6 days ago
  • Shaking up science
    When Grant Robertson talks about how the economy might change post-covid, one of the things he talks about is what he calls an unsung but interesting white paper on science. “It’s really important,” he says. The Minister in charge of the White Paper —  Te Ara Paerangi, Future Pathways ...
    PolitikBy Richard Harman
    6 days ago
  • Dusk Chorus: Auckland schools closed til Feb 7
    The clean up has begun but more rain is on the way. Photo: Lynn Grieveson/Getty ImagesTLDR: Auckland’s floods over the last three days are turning into a macroeconomic event, with losses from Aotearoa’s biggest-ever climate event estimated at around $500 million and Auckland’s schools all closed for a week until ...
    The KakaBy Bernard Hickey
    6 days ago
  • Dusk Chorus: Auckland schools closed til Feb 7
    The clean up has begun but more rain is on the way. Photo: Lynn Grieveson/Getty ImagesTLDR: Auckland’s floods over the last three days are turning into a macroeconomic event, with losses from Aotearoa’s biggest-ever climate event estimated at around $500 million and Auckland’s schools all closed for a week until ...
    The KakaBy Bernard Hickey
    6 days ago
  • How we get a new Prime Minister – it’s a simple matter of vice-regal appointment without a swear...
    The news media were at one ceremony by the looks of things. The Governor-General, the  Prime Minister and his deputy were at another. The news  media were at a swearing-in ceremony. The country’s leaders were at an appointment ceremony. The New Zealand Gazette record of what transpired says: Appointment of ...
    Point of OrderBy Bob Edlin
    6 days ago

  • Advancing our relationship in India
    Foreign Minister Nanaia Mahuta departs for India tomorrow as she continues to reconnect Aotearoa New Zealand to the world.  The visit will begin in New Delhi where the Foreign Minister will meet with the Vice President Hon Jagdeep Dhankar and her Indian Government counterparts, External Affairs Minister S. Jaishankar and ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • Government Northland housing investment to spark transformational change
    Over $10 million infrastructure funding to unlock housing in Whangārei The purchase of a 3.279 hectare site in Kerikeri to enable 56 new homes Northland becomes eligible for $100 million scheme for affordable rentals Multiple Northland communities will benefit from multiple Government housing investments, delivering thousands of new homes for ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Battle of Ohaeawai remembered
    A memorial event at a key battle site in the New Zealand land wars is an important event to mark the progress in relations between Māori and the Crown as we head towards Waitangi Day, Minister for Te Arawhiti Kelvin Davis said. The Battle of Ohaeawai in June 1845 saw ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • More Police deployed to the frontline
    More Police officers are being deployed to the frontline with the graduation of 54 new constables from the Royal New Zealand Police College today. The graduation ceremony for Recruit Wing 362 at Te Rauparaha Arena in Porirua was the first official event for Stuart Nash since his reappointment as Police ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Further support for upper North Island regions hit by significant weather
    The Government is unlocking an additional $700,000 in support for regions that have been badly hit by the recent flooding and storm damage in the upper North Island. “We’re supporting the response and recovery of Auckland, Waikato, Coromandel, Northland, and Bay of Plenty regions, through activating Enhanced Taskforce Green to ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • The Princess Royal to visit New Zealand
    Prime Minister Chris Hipkins has welcomed the announcement that Her Royal Highness The Princess Royal, Princess Anne, will visit New Zealand this month. “Princess Anne is travelling to Aotearoa at the request of the NZ Army’s Royal New Zealand Corps of Signals, of which she is Colonel in Chief, to ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government and horticulture sector target $12b in exports by 2035
    A new Government and industry strategy launched today has its sights on growing the value of New Zealand’s horticultural production to $12 billion by 2035, Agriculture Minister Damien O’Connor said. “Our food and fibre exports are vital to New Zealand’s economic security. We’re focussed on long-term strategies that build on ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Cost of living support extended for families and businesses
    25 cents per litre petrol excise duty cut extended to 30 June 2023 – reducing an average 60 litre tank of petrol by $17.25 Road User Charge discount will be re-introduced and continue through until 30 June Half price public transport fares extended to the end of June 2023 saving ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • More Kiwis in work as rising wages match inflation
    The strong economy has attracted more people into the workforce, with a record number of New Zealanders in paid work and wages rising to help with cost of living pressures. “The Government’s economic plan is delivering on more better-paid jobs, growing wages and creating more opportunities for more New Zealanders,” ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government boosts fund for Auckland flooding
    The Government is providing a further $1 million to the Mayoral Relief Fund to help communities in Auckland following flooding, Minister for Emergency Management Kieran McAnulty announced today. “Cabinet today agreed that, given the severity of the event, a further $1 million contribution be made. Cabinet wishes to be proactive ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New Cabinet focused on bread and butter issues
    The new Cabinet will be focused on core bread and butter issues like the cost of living, education, health, housing and keeping communities and businesses safe, Prime Minister Chris Hipkins has announced. “We need a greater focus on what’s in front of New Zealanders right now. The new Cabinet line ...
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    5 days ago
  • Prime Minister to meet with PM Albanese
    Prime Minister Chris Hipkins will travel to Canberra next week for an in person meeting with Australian Prime Minister, Anthony Albanese. “The trans-Tasman relationship is New Zealand’s closest and most important, and it was crucial to me that my first overseas trip as Prime Minister was to Australia,” Chris Hipkins ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government makes first payment to Auckland Flooding fund
    The Government is providing establishment funding of $100,000 to the Mayoral Relief Fund to help communities in Auckland following flooding, Minister for Emergency Management Kieran McAnulty announced. “We moved quickly to make available this funding to support Aucklanders while the full extent of the damage is being assessed,” Kieran McAnulty ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government steps up to assist Auckland during flooding
    As the Mayor of Auckland has announced a state of emergency, the Government, through NEMA, is able to step up support for those affected by flooding in Auckland. “I’d urge people to follow the advice of authorities and check Auckland Emergency Management for the latest information. As always, the Government ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Poroporoaki: Titewhai Te Huia Hinewhare Harawira
    Ka papā te whatitiri, Hikohiko ana te uira, wāhi rua mai ana rā runga mai o Huruiki maunga Kua hinga te māreikura o te Nota, a Titewhai Harawira Nā reira, e te kahurangi, takoto, e moe Ka mōwai koa a Whakapara, kua uhia te Tai Tokerau e te kapua pōuri ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Enhanced Task Force Green Approved following Cyclone Hale
    Carmel Sepuloni, Minister for Social Development and Employment, has activated Enhanced Taskforce Green (ETFG) in response to flooding and damaged caused by Cyclone Hale in the Tairāwhiti region. Up to $500,000 will be made available to employ job seekers to support the clean-up. We are still investigating whether other parts ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • General Election to be held on 14 October 2023
    The 2023 General Election will be held on Saturday 14 October 2023, Prime Minister Jacinda Ardern announced today. “Announcing the election date early in the year provides New Zealanders with certainty and has become the practice of this Government and the previous one, and I believe is best practice,” Jacinda ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Prime Minister Jacinda Ardern announces resignation
    Jacinda Ardern has announced she will step down as Prime Minister and Leader of the Labour Party. Her resignation will take effect on the appointment of a new Prime Minister. A caucus vote to elect a new Party Leader will occur in 3 days’ time on Sunday the 22nd of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago