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Private prison a money-waster, despite Collins’ spin

Written By: - Date published: 6:55 am, July 13th, 2010 - 9 comments
Categories: capitalism, privatisation, spin - Tags: ,

Judith Collins is lauding the supposed economic benefits of the private prison at Wiri in South Auckland (soon to be filled with people sentenced under all these new laws the Nats, the party of freedom, are passing with no impact on the crime rate). Apparently, the prison will generate $1.2 billion worth of economic activity over 30 years.

Wahhooo! To get rich all we need to do is build more prisons! Let’s do it, then we can all buy dune-buggies!

But wait, Collins says is the government is planning to spend $101 million on construction and $40m per year for 30 years on wages. That’s $1.3 billion over 30 years. And that only results in $1.2 billion of economic activity in New Zealand.

How’s that? Oh, yeah, the private foreign owner who will be taking hundreds of millions offshore.

And of course an expenditure of money, public or private, results in economic activity and the wages are re-spent through the economy (the multipler effect). So what? It doesn’t mean it’s a good or optimal use of that money.

We could pay $101 million for the construction of the Great Wiri Sand Pit and pay $40 million a year for workers to empty and re-fill it. That would be the same expenditure as the Nats are planning on their new prison and it would result in the same ‘economic benefits’ – illusionary ones. But at least we wouldn’t be spending the money on another 960-bed criminal training unit and sending hundreds of millions of dollars offshore for the pleasure.

The real questions are:

  • what are the benefits to the Government as a whole, even better New Zealand as a whole, from this project?
  • How do they compare to the costs?
  • How does the benefit/cost ratio compare to a fully public prison?
  • And what other projects won’t be built because we’re sinking $1.3 billion into an institution that will be another failure and a profit maker for foreigners?

Pity no-one asks them.

9 comments on “Private prison a money-waster, despite Collins’ spin ”

  1. joe90 1

    Donations for policy?.
    How The Recession Hurts Private Prisons

    GEO increased its revenue by $20.2 million in the last year by opening up prisons in Australia and the United Kingdom, while also eyeing contracts in South Africa and New Zealand.

  2. Arthur 2

    Let’s build a prison in every city.

  3. Clarke 3

    I love the idea that Crusher Collins is now talking up prisons as though they were an economic benefit to the locals … “Good news! There are 1900 jobs in your region from locking up your own whanau!”

    Forget the cycleway …. this is the kind of economic leadership I so admire the Nats for.

  4. Olwyn 4

    You see this talking up the economic benefits in Michael Moore’s film – I think the one on capitalism. When there is a war about land, the poor are designated cannon fodder. With the issue being money it seems that the poor are now prison fodder. When you have English talking up corrections as the growth area in govt departments, one can only assume that they have been encouraged by a plan that will make corrections so expensive that private prisons will be “necessary.”

  5. randal 5

    go with arthur.
    cutting to the chase new prisons are just part of the justice industry.
    return on equity an’ all that.
    shares for tthe boys (and girls) and an active agency arguing for longer and stiffer sentences and boy you are in business.
    who said patronage died with the divine right of kings?

  6. Olwyn 6

    Following on your post Randal, this article has left me feeling very uneasy:


    A Dr Wojik, from Whangarei, has hypothesised that the Kahui twins died from Barlow’s disease (a form of infant scurvy) rather than abuse. He supports this by noting that there was no damage to their necks or spinal cords. His claim has been rejected, but he is experienced in this field and to me it does raise questions. Firstly, it is odd to think that someone would pick up and shake not one, but two twins – the idea seems counter intuitive. Secondly, these children were bottle fed, and it seems plausible that someone might economise on the formula without grasping that this would be to the their children’s detriment, rather as you might economise on the milo.

    While I acknowledge that Dr Wojcik may well be wrong, it has left me with the uneasy feeling that abuse may be a first port of call for explaining injury and illness in certain sorts of families, especially given that the subsequent tenants of the house complained about the media throwing empty beer cans over the fence prior to filming it to accompany news stories. In short, abuse may now be the status quo explanation for things going wrong for kids in poor families.

  7. BLiP 7

    What party other than National Ltdâ„¢ would take delight in the financial benefits of locking people up . . . oh yeah, ACT. So much for personal liberty and freedom from the state, eh lads?

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