Corrections (Contract Management of Prisons)  Amendment Bill — First Reading 
Corrections (Contract Management of Prisons)  Amendment Bill — First Reading 
[Volume:653;Page:2024] 
Corrections (Contract Management of Prisons)  Amendment Bill 
First Reading 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I move  
That the Corrections (Contract Management of Prisons) Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Law and Order Committee. 
This bill reflects Government policy to allow for the competitive tendering for contract management of prisons on a case by case basis. Legislation providing for the private management of prisons in 1995 was repealed in 2004 by the Labour-led Government. That saw the end of the private management of Auckland Central Remand Prison and the Corrections Act 2004 expressly prohibits the Crown from entering into contracts for the management of prisons. Labour’s decision was purely ideological. It had nothing to do with the management of Auckland Central Remand Prison which was widely acknowledged as being highly successful. In fact it was so successful that the Department of Corrections adopted many of its innovations when it took over the prison in July 2005. Those improvements included education crime prevention programmes physical training and staff dedicated to behavioural assessment. Local iwi also supported the partnership with Auckland Central Remand Prison. 
The legislation that governed the contract management of Auckland Central Remand Prison provided a sound basis for an effective and productive relationship between the contract managers of the prison and the Crown. This Government will therefore re-establish the legislative framework for contract management of prisons based on the previous legislation. We have made some changes that reflect the environment in which prison management must be carried out in the 21st century. Past provisions have been preserved where they remain sound and amended where new provisions that have arisen in the intervening 15 years have made it prudent to do so. 
The Department of Corrections is facing significant pressure on its existing prison capacity. Prisoner numbers over the next 10 years are forecast to grow to the point where an additional 5000 prison beds may be needed by 2018. Demand for prison beds is being driven by an increasing prison population and the need to replace obsolete facilities. The Government must therefore look for innovative solutions efficiency and cost-effectiveness in prisoner management. Allowing private companies to provide custodial services creates an opportunity to benefit from private sector initiative. 
The Corrections (Contract Management of Prisons) Amendment Bill is consistent with the objectives and purpose of the Corrections Act 2004. The Corrections Act requires the corrections system to improve public safety and to contribute to the maintenance of a just society. This must be done through the safe secure humane and effective containment of people who are subject to custodial sentences. The maintenance of public safety is the paramount consideration in all decisions made about the management of offenders. The Government believes that this bill provides an opportunity for innovation in safe and effective offender management that is consistent with the guiding principles of the Corrections Act. 
Another key feature of the Corrections Act is the accountability that it sheets home to the chief executive of the Department of Corrections. Prisoners remain in the legal custody of the chief executive at all times. This will not change when the prisoner is held in a prison managed under contract. The chief executive remains ultimately accountable for the acts or omissions of the contractor. This will drive a rigorous performance management regime. Contractors’ performance will be regulated and monitored through the use of prison monitors and the rigorous reporting requirements imposed by this legislation. 
The bill clearly identifies those things that must be provided for in every contract for the management of any prison. These include performance objectives and standards particularly regarding the secure containment of prisoners; staff selection and training; the provision of rehabilitative programmes to address the causes of prisoners’ offending; obligations to manage the interface with other Government agencies such as the police and the courts; and termination provisions governing the right of the Crown to step in in the event that a contract manager is failing to meet the terms of the contract. 
The bill provides for all prison management contracts to be tabled in Parliament 12 sitting days after they have been entered into. It establishes a specific role for prison monitors. Monitors will be based within specific contract-managed prisons. They will be tasked with assessing and reporting on the management of each prison for which they are responsible. The bill sets up a number of significant reporting obligations with which the contractor must comply. These include reports on all serious incidents within the prison involving escapes escape attempts or prisoner deaths; reports detailing the use of disciplinary powers within the prison and the outcome of all disciplinary proceedings taken against prisoners; and reports providing the details and results of all random drug-testing undertaken within the prison. 
The bill establishes clear rules around Crown liability. It also imposes a duty on the contractor to indemnify the Crown if the actions or omissions of its staff cause loss to the Crown. The bill requires the contractor to carry sufficient indemnity insurance to cover these liabilities. 
The bill does not place any statutory limitation on the duration of the contract that can be entered into. It leaves this to be negotiated between the parties. This approach providing the parties with the freedom to negotiate on duration is one of several key terms and conditions alongside cost performance objectives and a return on investment over time. 
The bill requires contract prison managers to comply with the requirements of several relevant New Zealand laws. These include the Corrections Act and its regulations the New Zealand Bill of Rights Act and those parts of the State Sector Act that invoke the requirement to be a good employer. The bill also requires the contractor to comply with all relevant international obligations and standards. Because all these requirements must be expressed as terms within the management contract failure to comply with any of them will place the contractor in breach of its contract with the Crown. These conditions may seem onerous but it is no less than we expect from our public prison system. This Government will expect both public and private providers to deliver efficient and effective custodial services and to be accountable for the way in which they do so. 
Finally the bill protects the interests of staff who are members of the Government Superannuation Fund. It ensures that existing staff who transfer their employment to contract prison managers are still deemed to be in Government employment for the purposes of their Government Superannuation Fund entitlements. 
One matter that remains to be addressed is around the flow of information between contract prison managers the department and other agencies such as the police and the courts. This is necessary to enable every agency involved to carry out its appropriate tasks duties and functions effectively. The Department of Corrections is in discussion with the Office of the Privacy Commissioner as to how this should be managed. Advice will be provided to the select committee before the bill is considered. 
Allowing for the competitive tendering of prison management on a case by case basis provides an opportunity for innovation efficiency and cost-effectiveness. I consider that this bill will provide a sound legislative framework through which the Government will be able to realise those benefits. Therefore I commend this bill to the House. 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 That was a written speech read word for word by the Minister Judith Collins without any passion conviction or belief in what she was saying. 
We have to ask why the National Government is moving to privatise prisons. I guess the first answer is that essentially this National Government believes in privatisation. National would not admit to it during the election campaign but now it has already signalled that it will take the profit sectors of the accident compensation scheme and give them to Australian insurance companies to make profit from New Zealanders and provide fewer services. Now it is talking about doing the same thing in the prison system. 
Why is National doing it? The first reason is simply blind ideology. Those members have faith that somehow the private sector will manage prisons better will deliver those services for a lower cost and at the same time will provide a very healthy profit to again the overseas companies that will run these prison services. That is an act of faith on the part of National but in that speech from the Minister there was not one iota of evidence that the private sector could provide any of the things that she suggested. The first reason National is privatising prisons is ideology. 
I will say this about ideology if ideology means values. On this side of the House we believe that running a corrections system is a core public service in exactly the same way that running the Defence Force or running the police force is. Those are core public services. In none of those instances have we ever believed that turning those services over to the commercial sector to make a profit is appropriate. This I would suggest is the top of a slippery slope. If we are to privatise the corrections system then I ask why we would not move to do that to other core public services. Of course National members never had the courage to say that before the election. They said that in this term of office there would not be any privatisation. Mr Coleman the Minister of Broadcasting keeps saying that he will not privatise Television New Zealand this term but the message very clearly is that this is the inherent agenda of National—to go back to its roots to privatise everything that it can and to turn over these core public services to the commercial sector so that a profit can be made. 
But the real motivation for this Minister lies elsewhere. This Minister likes to be known as “Crusher Collins” but after the fiasco with Barry Matthews she became known as “Chihuahua Collins” and that is a little bit more like it. I remember seeing a cartoon in a newspaper. There was the prison the barbed wire the big kennel with “Rottweiler” on it and there was this little chihuahua with the Minister’s face and a little pink ribbon on it. That said it all. Heads were going to roll. She failed. She backed down. She talked tough she did not deliver. 
Then she comes to this House complaining that prison numbers over the next 10 years are going up by 5000. This is the same Minister who said that Labour was soft on law and order. Now she is saying that the legislation is too tough as it means that more people are in prison and she cannot cope. In Opposition she was the first person to get up and tell the Minister to take responsibility. Now she will not touch it with a bargepole. She will not take responsibility and she believes that by privatising prisons she can avoid responsibility. It will be the private sector’s fault that it has not delivered what it promised and what she promised. But I tell the Minister that she can run but she cannot hide. She is still accountable and by privatising she will not remove the accountability because we will hold her accountable for what experience tells us will happen in the private sector. 
I will just say that there is one other motivation—and let us be very clear about this—as to why the Minister wants to privatise. Privatisation is a way of forcing down wages and bringing down working conditions. Every private prison in the world has made its profit by reducing staff levels and reducing services. I will give the Minister some examples of what has happened overseas and as to why there is absolutely no evidence for her claim that somehow a superior service at a better cost will be delivered. 
In 2001 the United States National Council on Crime and Delinquency produced a report. It stated that there was “no data to support the contention that privately operated facilities offer cost savings over publicly managed facilities”. That is what the US National Council on Crime and Delinquency said. It said that there was no evidence that services to prisons and conditions of imprisonment were significantly improved in privately operated facilities. In fact it came out with some concrete findings. The report stated that privatisation led to a 15 percent lower ratio of staffing to inmates. That is supposed to make our society safer—a reduction in the number of staff who are running the prisons. The report stated that the management information systems were less well organised in the private sector. It stated that the number of serious incidents was higher in the privately run system than in the public system. It stated that there was a higher rate of assaults by prisoner on prisoner and by prisoner on staff in the private sector. I ask where the evidence is in that report that privatisation of our prisons in New Zealand will produce better conditions better standards and lower costs. There is no evidence there. 
Canada just 2 years ago ended the privatisation experiment in that country. It returned the one private prison it had to the public sector saying that after 5 years it could find no appreciable benefits from privatisation. Canada I say for the Minister’s information has a very similar system to that of New Zealand. 
Then in the United Kingdom there was a report by the National Audit Office in 2003—just over 5 years ago. It stated that the performance was mixed but it pointed out that of the bottom-ranked prisons almost all of them were privately managed prisons. The worst-performing prisons in the United Kingdom were in the private sector. 
I ask this Minister where the evidence is that we will get better results a safer and better society through the privatisation of our prisons. This bill is blind ideology. This is blind faith by the National Government that somehow privatisation will produce better-run prisons at a lower cost. It was private sector people who brought about the financial crisis of the developed world at the present time. 
I want to say that under the previous Labour Government the prison system in this country—the public prison system—appreciably improved. The number of escapes was down by 84 percent under a Labour Government. Drug taking was down by two-thirds. The Minister is very fortunate to have inherited a situation where cellphones can no longer be used in prisons because every prison in this country is jammed. She is very fortunate to have inherited a situation where annually 600 inmates are now getting drug and alcohol rehabilitation where over 1800 inmates a year are getting literacy and numeracy training and where 60 percent of sentenced prisoners are getting work in prison. I say to the Minister that those advances will be compromised under privatisation because the private sector has no vested interest at all in producing better results. It has a vested interest in making a greater profit. If members want to see the ultimate corruption in the private sector then they will see it in the United States where judges were recently convicted of corruption for sending young prisoners to privately managed prisons to up their profit margins. That is the judiciary in the United States. There is clear evidence that if we turn this sector over to private management then there is a vested interest in profit making— 
Hon Judith Collins 
: I raise a point of order Mr Speaker. From what Mr Goff has just said it certainly appears that he is implying that there is corruption in the judiciary. I would just like to get confirmation he does not mean the New Zealand judiciary. 
The ASSISTANT SPEAKER (Eric Roy) 
: I did not take that inference at all. The member has 10 seconds. 
Hon PHIL GOFF 
: All I can say in 10 seconds is that that last comment is a true reflection on the Minister. The Minister should open her ears—I said no such thing. I say prison management is a function for the core public sector. There is no evidence of reduced costs; there is evidence that there will be reduced safety and reduced services such as rehabilitation. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I thank Opposition members for their applause knowing that the Hon Phil Goff has just finished his speech in the House and that I am about to begin mine. So I say thank you for that wonderful applause. 
The Opposition member who has just resumed his seat was the Minister of Corrections—”was” being in the past tense—with responsibility for parole and what a mess he made of that. Yet he was here in the House sounding like the be-all and end-all—the ultimate authority. Well I believe that he is in absolute fantasyland. If he actually looked at the objectives of the bill he might develop a little bit of understanding. Perhaps Opposition members might like to refer to the explanatory note where they will find the objectives of the bill which allow the Department of Corrections to tender and contract prison management on a case by case basis. That will in turn allow contracted prison managers to introduce innovation improve service performance and be more cost-effective. And what did that Opposition member say? He said it is wrong that the running of prisons should offer the potential for profit. Members opposite find that so scary. The Opposition cannot stand the idea that anybody might make even a dollar from offering good services to the public of New Zealand. 
I am delighted to follow my most excellent colleague the Minister of Police and the Minister of Corrections Judith Collins who is making some outstanding changes in regard to the Government and providing services for the continued safety of the New Zealand public. Without a doubt that is being achieved here. The Opposition’s argument that the running of prisons should not offer the potential for growth is an argument without substance. It is simply a catchy cliché that does not stand up when analysed. This bill is about providing for the private management of prisons; the ownership and the overseeing of prisons will remain in the hands of the Crown. It is about management. 
One has to wonder how much Opposition members really understand this legislation. I wonder whether they have even read it. I ask whether any members of the Opposition would like to put their hand up to say that they have read the bill. Well look at that: no hands went up. Not a single hand went up. They have not read the bill. That is quite clear. Look at that! And there are only 8 clauses! What does that tell us? They have a complete lack of understanding. They do not even have an adequate overview of the legislation in the House. They have not read the bill. They do not know what it is about yet they think that they can stand up in the House and criticise a really worthwhile initiative that will serve the public of New Zealand well and that will provide them with the security and safety that they rightly deserve. This Opposition—weak as it is—cannot even appreciate that fact. None of those members seems to have even read the bill. 
One of the other arguments that has been put forward relates to the idea that corrections is a core State function. This is the Opposition’s absolute nanny State control ideology. Labour lost the Government benches because the New Zealand public were sick of that absolute nanny State control where Labour could not see any other option or choice other than it being the absolute controller ruler and arbiter of all. That is why those members are now in Opposition. 
Let us face it most people would agree that just as the private provision of some health and education services is effective efficient and provides choice for the New Zealand public so too can the private management of prisons and that is what this bill is all about. The core standard of care and conditions is set by the State. Even the buildings will be owned by the State. All that is actually happening—and maybe Opposition members might like to listen up or read the bill—is that we are allowing the management of prisons by the private sector. One could not argue about the ability to have some choice in that regard. I would love to hear any further arguments that Opposition members might be able to dredge up. 
Another argument is that there will not be incentives to reform prisoners and reduce the prison population. That argument is wrong as well because this is all based on a contractual arrangement. Opposition members should understand although I doubt that they do that this can be quite clearly determined by the robustness of the contractual arrangement in place in the private provision of prison management. The management problems that have occurred with privatised prisons can usually be linked to poorly drafted contracts which is quite true. These matters can be addressed if good robust contracts are established and put into place. Let us face it: the previous Minister made a mess of corrections and parole. If we look at the report by the Auditor-General we can see that the previous Government has a lot to answer for in terms of the robustness of the services being provided. 
The previous speaker Phil Goff talked about the disadvantages for workers because private sector prisons provide lower pay and fewer incentives in order to increase profits. As I have already outlined the privatisation of health and education services can benefit workers and provide benefits that the public sector may not be able to provide. Employees have the opportunity to negotiate with their employer. Past experience has proven that private prison service providers are more open to direct Maori and iwi involvement which is fantastic. 
The Iwi Whanui o Tamaki-makau-rau—a committee of six Auckland iwi—was heavily involved in the Auckland Central Remand Prison while it was privately managed. The managers and the iwi whanui had a very strong partnership that allowed for extensive involvement by iwi in the prison. The iwi whanui publicly criticised the Labour Government’s decision to return the prison to public management. Maybe the Opposition would like to reflect on that. The iwi whanui chair Te Warena Taua said in 2003 that the Auckland Central Remand Prison was quite rightly regarded as the most innovative effective and culturally safe prison in New Zealand’s history. 
Mr Taua also said that the iwi whanui strongly believed that removing the Auckland Central Remand Prison management contract and preventing further like it represents the biggest step backwards in terms of prison management particularly in the areas of inmate management and rehabilitation and that is exactly what the Labour Government did. It took a huge retrograde step when it closed down the opportunity for private prison management and removed the legislative ability for that to happen. It removed that choice from the statute book. We are now rectifying that gross omission by the previous Government and we will satisfy some of the concerns expressed by Mr Taua the iwi whanui chair at that time in 2003. 
Discussions around the private management of Ngawha prison before the Labour Government removed the provision for private management resulted in agreements with northern iwi Ngati Hine for Corrections Corporation of Australia to run the prison for 5 years with Ngati Hine’s involvement. The two were going to work together. I see that as providing much more successful outcomes for the rehabilitation of prisoners—for their going back into the community and not reoffending. I would like to see Opposition members try to argue their way out of that one because I do not think they have a leg to stand on. Their nanny State ideology is not wanted by the New Zealand public and the sooner they wake up to that the better. 
Hon DAVID PARKER (Labour) 
: 
 What that member calls nanny State I call principle. There are certain functions of the State that ought not to be contracted out. One of those functions is taking away a person’s liberty. That ought not to be contracted out. Where to next? As Phil Goff said earlier where will it go to next? Will it be a private army? Will it be a private police force? Again they are functions that ought not to be contracted out. The National Government’s policy on this fails the most basic principle that this is one of those core State functions that cannot legitimately be contracted out. 
There are some and National Party members are amongst them—and it was not put very eloquently by the person who spoke before me—who try to drive a fine distinction between the allocation of a penalty that deprives someone of their liberty and the deprivation of liberty following sentence. But such fine distinctions cannot be made because it is the private contractor in that prison who makes decisions that affect the liberty of the person who is the prisoner. It is the report of the private contractor that is relevant at the parole hearing which determines how long that person stays in custody. Those are the functions of the State not the functions of private enterprise. 
Shane Ardern 
: Why? 
Hon DAVID PARKER 
: It is for the same reason that we ought not to contract out the army to mercenaries or the police force to a private police force. They are proper functions of the Crown not private enterprise. 
There is an important principle at stake here and it is that some things ought not to be put out of the control and responsibility of the State and into the private sector. The State is held accountable for prison policy through elections. Private enterprise has no such control. Private enterprise is not held accountable for its actions in depriving people of their liberty through elections. There is no control on private enterprise in that way. One might think that if there was not some reason for the basic fundamental principle that one ought not to contract out core State functions then some good should be achieved through contracting out. The international experience on contracting out correctional facilities is now some decades old. We heard Phil Goff recount that the experiment in Canada failed. Canada reverted to State control of prisons. He also adverted to some of the literature in the United States. 
I thought it was notable that the Minister of Corrections did not make any reference to any studies overseas as to the effectiveness of private prisons—because she cannot. She said that we will have an increase in the prison population on the Government’s forecast of 5000 prisoners over the next 10 years. That statement most clearly illustrates that the biggest issue in respect of corrections policy and whether it is succeeding or failing is rates of recidivism—rates of reoffending. 
For there to be any justification for a move to private prisons—and I think there is none on the principled basis but let us ignore that basic principle and look just at efficacy—we would have to be looking at overseas studies that have shown that private prisons have reduced rates of recidivism. But there are no such studies. There are none in Australia. A recent report from New South Wales in Australia on privatisation in the corrections industry which is published in the journal  
Corrections Criminology 
 concludes that there are few detailed studies on the effects that privatisation has on recidivism. There is an update to that and it notes that that remains the case in Australia. There is no evidence in Australia that some of their experiments with privatisation have worked. 
In the United States it is even worse. There are two peer-reviewed studies in the United States on the effects on recidivism of private correctional facilities. I will quote for members the first one entitled  
The Effectiveness of Juvenile Correctional Facilities: Public versus Private Management 
. The very learned authors are Patrick Bayer from Yale University and David Pozen from Oxford University. 
David Garrett 
: There are only two in the whole United States? 
Hon DAVID PARKER 
: The peer-reviewed ones? Mr Garrett is correct that there are only two. The member should know that if he has done his study as I have done. The study concludes that full profit management has statistically significant impacts on recidivism. It has statistically significant impacts on recidivism. The unfortunate fact for Mr Garrett is that the statistics go the wrong way. In 1 year recidivism rates are 5 to 8 percent higher for those juveniles who have been in privately run facilities. The other study is one called the Bales report. Again it is a peer-reviewed study of the experiments in Florida on private prisons. That study found no empirical justification for the policy argument that private prisons reduce recidivism more than public prisons do. 
That is why the Government has not produced any evidence by which it can justify contracting out this core State function—there is no evidence that it improves rates of recidivism. The peer-reviewed articles in fact go the other way. We also heard from Phil Goff and I will reinforce his points about the experiment in the UK. Again there was very poor analysis as to whether overall there have been good or bad results from prisons but the results that are available show that the poor prisons are the ones that have been contracted out to private providers. 
David Garrett 
: Would you like to table those two studies? I’d like to see them. 
Hon DAVID PARKER 
: I can give the member the references. 
David Garrett 
: Just table them. 
Hon DAVID PARKER 
: I am happy to table the information I got from the Parliamentary Library and it is a quote from there. I will give the member the reference and he can look it up. The reference is www.econ.yale.edu/growth. The PDF is cdp863. The member can look that up for himself. There is no doubt that there is no case for this on the basis of recidivism. 
Mr Goff makes a fair point. The only way prisons can make a profit is by cutting the cost of their services. The prisons themselves are provided by the State we are told by Sandra Goudie. Those running the prisons will not be able to reduce the cost of the bricks and mortar so the only thing they can do is cut the cost of services. The only way they can do that is either by paying people less having fewer people or reducing the level of services available to inmates. That last one is the one that concerns me. The other two concern me as well. A reduced number of corrections officers obviously would be poor but if there is not as much money spent on alcohol and drug programmes and if there is not as much money spent on literacy and numeracy programmes and anger management issues and violence issues are not dealt with we will have increasing rates of recidivism. I suspect that that is why the international studies do not show a decrease in recidivism as a consequence of privatisation of correctional facilities but rather an increase. It is because the private prisons cut costs where they can and one area where they cut costs is the programmes that would reduce recidivism. 
The Government instead of privatising prisons should be focusing on how it can reduce rates of recidivism. A move towards private prisons will increase rates of recidivism. New Zealand already has the second-highest rate of imprisonment in the Western World behind the United States. We should not follow the United States further down that route. We certainly should not follow the United States into having privatised correctional facilities. 
I have one last point. The other bit of news we had from the Minister of Corrections in recent weeks was a plan for a 1200-person prison. A 1200-person prison! What a ridiculous prison policy—a 1200-person prison! Gang culture will prevail. 
David Garrett 
: What a stupid argument! 
Hon DAVID PARKER 
: David Garrett says it is a stupid argument. The Roper report into corrections facilities said— 
Mr DEPUTY SPEAKER 
: The member’s time has expired. 
METIRIA TUREI (Green) 
: 
 It is clear that the Green Party is opposed to the Corrections (Contract Management of Prisons) Amendment Bill. Tonight I want to set out a response to the economic arguments that have been put forward by Government members but first I will address the issue of Maori imprisonment and the profiteering from that imprisonment. 
Profiteering from the imprisonment of Maori is simply profiteering from institutional racism regardless of who profits. On this issue the Green Party and the Maori Party diverge and that saddens me terribly. I agree that the Department of Corrections has an appalling record with regard to involving Maori in prison issues and that the 50 percent of the prison population who are Maori desperately need interventions and the restoration of their mauri ora and mana that tikanga Maori within the prison environment can provide. But that will not be the case when the cash is going into the back pocket of some US corporation and when the cash is going into the back pocket of an iwi or runanga feeding off racism in the legal system. 
Racism in the legal system is a proven fact in this country. A 2007 report  
Over-representation of Maori in the criminal justice system 
 
 s 
hows that the analysis of data from apprehension through to prosecution conviction and finally sentencing confirms that Maori are more likely to be apprehended and more severely punished than non-Maori. Judge Becroft of the Youth Court confirms that young Maori are more likely to receive a harsher sentence for lesser crimes than those committed by their Pakeha counterparts. So now we know why the Maori imprisonment rate is five to eight times higher than that of Pakeha. For Maori the cost of this legislation is that more of us will end up in jail. 
Private profiteering provides no protection for Maori and incentivises a massive increase in prison population by the use of the full range of racist filters in the system. Having Maori managers of a prison at the end of systemic economic policy programmes specifically designed to put our people in jail is pointless. We cannot protect our people from that systemic racism if key Maori organisations support the economic levers that put our people in there in the first place. We urge Maori across the motu to condemn this legislation. 
The Government argues that private management will save public money; that is the key reason why it promotes this bill. Yet the facts prove the Government 100 percent wrong on that. The facts from the running of private prisons in the US and Australia clearly show that there are no real cost savings to the public purse. The United States Department of Justice report  
Emerging Issues on Privatized Prisons 
 clearly showed that the privatisation model simply mimicked the public sector in every practical and critical way. The promises from private companies in the US of 20 percent savings simply did not eventuate. Any modest savings that were made came at the cost of reductions in staffing and other labour-related costs. The report concluded that “This amount of savings will not revolutionize modern correctional practices.” which proves Judith Collins wrong. In other words privatisation has no practical impact on the cost of running prisons or on the practice of running prisons. 
An Australian paper “Privatisation and New South Wales Prisons: Value for Money and Neo-liberal Regulation” published just last year also showed that the privatisation of prisons did not result in value for money or a significant reduction in cost. In fact the paper showed that the rhetoric of cost-effectiveness undermined alternative criteria for assessment such as safety educational outcomes and reduced offending. That is where the National Government is duping the public. By misleading the public on the efficiency of private prison management it is diverting attention from the most important issue of all: the effective use of taxpayers’ money to keep our communities safe. Public scrutiny of private prisons will be severely limited. As the New South Wales example shows the actual internal operating efficiencies of the private operator are not made public. An Australian Public Accounts Committee report showed that the actual operating costs for the private prison are not available as GEO Group is a private company that is in competition with other operators in Australia and that information is commercially sensitive. 
Private prisons have a strategic advantage over the public sector because the public sector is required to make that information publicly available. The private sector however is not. This is how the contracts will be managed in New Zealand. This legislation does not protect the public right of scrutiny over privately run prisons. The company that runs the private prisons in the US and Australia—Wackenhut which became GEO Group—is the same company that ran the Auckland Central Remand Prison which John Key described as producing “very good results”. Of course we know that the Auckland Central Remand Prison was run as a loss-leader. So what are the results of the operations of GEO Group and Wackenhut? We can look to the detention centres in Australia and the US for an accurate picture of what our prison system will look like under these companies. 
In the UK Wackenhut received a placing in the  
Observer 
’s hall of infamy Golden Vulture Awards for amongst other things “sadism greed and frightening incompetence”. It has been subject to allegations of sexual abuse physical violence and unsafe work practices. In the US the GEO Group operates 11 immigrant detention centres youth facilities and adult prisons. Its record includes settling a case where it placed a woman in a cell block with male inmates who raped and beat her such that she later took her own life. One hundred and twenty-five inmates were removed from a prison by State authorities for inadequate staff training and inadequate health-care. The prison reportedly served rotten food knowingly made false and misleading statements to State officials failed to keep complete criminal record checks on at least 100 prison guards and violated domestic and international laws on due process and humane treatment. None the less GEO is worth more than US$1 billion and made US$61 million from the US taxpayer in 2007. 
In Australia the Australian Medical Association and others have called for an independent inquiry into the private immigration centres based on staffing problems substandard services and child abuse. Privatisation in Australia was also used as a way to reduce the working conditions of corrections staff. Here in New Zealand we cannot afford more unemployment especially in some of the most dangerous institutions in the country where staff safety is severely compromised by staff reductions. New Zealanders need to know that this legislation will put our friends and family members who work in prisons at greater risk of both serious physical harm and unemployment. 
This evidence begs the question: can the free market be the solution to the problems of a prison system? The key to a successful business is repeat customers thereby providing a perverse incentive to minimise programmes that reduce reoffending yet a reduction in reoffending is the key to keeping our communities safer. Reducing reoffending is a reduction in crime. In an article in the  
Guardian 
 earlier this month George Monbiot talked about the case where two judges in Pennsylvania were convicted of jailing some 2000 children in exchange for bribes from private companies that ran the youth detention centres. Those judges were paid $2.6 million by private companies for helping to fill their jails. In one of the youth facilities run by GEO Group the facilities were so squalid that young people were stepping in their own faeces. 
There is no economic evidence that private prisons are cheaper for the public purse. The economic benefit lies with the corporation which will make a tidy profit from taxpayer money while providing no appreciable difference to the way that prisons are run or to their cost. In this legislation National is simply fulfilling its promise to its backers and the Green Party condemns this policy in the strongest possible terms. 
DAVID GARRETT (ACT) 
: 
 I rise to speak on the first reading of the Corrections (Contract Management of Prisons) Amendment Bill. I am very pleased as an ACT member to speak on this bill. As members in the House know ACT and other parties have advocated for the private management of prisons for some time. Indeed I am told that in the last term of Parliament MPs from two different parties put up bills covering the private management of prisons. 
It is not as members opposite and members to my right might have us believe a hard-right initiative. In fact it is not ideological at all. I was reading  
Hansard 
 a couple of weeks ago. I do not have the quote in front of me but the former Green member Mr Tanczos said he agreed that on all measures such as suicides assaults on guards assaults on prisoners and escapes the Auckland Central Remand Prison was better when run by a private company. But because it was ideologically offensive to him he was opposing it anyway. This is what ideology is all about: “We do not care how well it is run how successful it is how many fewer suicides or attacks there are. If it does not fit Karl Marx we are against it.” That is what we are hearing from that side of the House. 
There is widespread support for the private management of prisons. It is the Greens and Labour that are out of step with public opinion. Mr John Key said “We support what works. We’re not interested in ideology. We’re interested in what works.” and I applaud him for it. Mr Simon Power whom I met with earlier this evening said the very same thing on a related topic. He said: “If you can convince me this works then I’ll be for it.” That is not ideology; that is called pragmatism. Ideology is found on that side of the House. We heard this ridiculous quote from the Labour Party: “In the US judges were convicted of sending people to jail for a bribe.” How many? Where? How many judges are there in the US—1000 50000 or 100000? Labour said: “If we find one judge in the United States who has taken a bribe then that disproves the entire system.” I think that is called a non sequitur. It is a bit like saying that my Uncle Harry smoked 80 cigarettes a day and he lived to be 95 so that proves that smoking is safe. That is what that kind of argument is. Labour said “We found two judges in Pennsylvania who did this and therefore the whole idea is useless; the whole idea is bad.” That is totally faulty logic. 
The Auckland Central Remand Prison was successfully run by a private firm for 5 years. It was not just run successfully but it was run better than public prisons. This was measured by fewer assaults fewer suicides fewer escapes—I will come to them in a minute—and fewer attacks on guards. On those measures that prison was better run. There were fewer escapes. But when there was an escape the prison had to pay. [ 
Interruption 
] A member over there said that there is no incentive. Well it is called a contractual disincentive. There are no lawyers on that side of the House at the moment but if those members asked then a lawyer would explain contractual disincentives to them. If the contract says that if someone escapes then the prison will have to pay it is called a penalty or a disincentive. That is why there were fewer escapes. 
Chris Hipkins 
: A disincentive to report. 
DAVID GARRETT 
: There was a disincentive to report escapes so they covered them up did they? I ask Mr Hipkins which escapes were covered up. 
Chris Hipkins 
: A disincentive to report anything. 
DAVID GARRETT 
: I am listening but there is nothing. A $50000 fine was paid by Auckland Central Remand Prison because of an escape. However State-run prisons could let however many they wanted to escape with no disincentive. We have seen the results of that in the Auditor-General’s report. Fines are a major disincentive to private prisons. Unlike the Labour Party I have not seen the contract that the Minister of Corrections Judith Collins has in mind. Those members have seen it and they know the contents of it. 
Hon Judith Collins 
: They must do. 
DAVID GARRETT 
: They must know that there are no disincentives and no penalties for escapes. I look forward to Ms Collins sending it to me so I can see it. 
The fact is that the private prison was better run. Despite that Labour says: “No we can’t have it. It’s against our ideology.” and Ms Turei said exactly the same only in stronger terms; she brought racism into it as well. 
At age 17 when I knew so much more than I know now I was convinced that the State could provide everything and do it well. 
Hon Darren Hughes 
: Ha ha! 
DAVID GARRETT 
: As I grew up as I am sure Mr Hughes will do one day I realised that the private sector was a more efficient provider of better-quality products whether they be roast chips cars or prison accommodation. It is interesting that members on the other side like to cite American studies. One thing I will do tomorrow is check Mr Parker’s reference to the two studies he mentioned. He has told the House that there are only two peer-reviewed studies. I will get the reference from  
Hansard 
. I say to Ms Mackey that I do not need to write it down. I will check those two studies but I will also look at the footnotes and at the other papers that are mentioned in those two studies. The member had better hope there are only two reports that confirm that private prisons in the United States have worse results. We will see. 
Competition will signal to our corrections system that efficiencies can be made. In that regard the hugely business-experienced Labour Party members have said that the only way we can get more efficient is to reduce costs by reducing services. Well hello? No there are many ways to become efficient. I will give just one example. Instead of prisons buying food from Foodstuffs or Progressive Enterprises at wholesale rates like my local Woolworths they could buy food with expiry dates of next week. That is why the Chinese general store near where I live out in the country is able to compete with the supermarket both in food and alcohol. If we looked closely we would see that the stuff expires in 2 weeks’ time so it is cheaper than the supermarket. That is good business and that is why we shop there. There are lots of ways of increasing efficiency. It is not just a question of reducing services. 
I was very pleased to hear Judith Collins confirm in this House that the days of flat-screen TVs and underfloor heating in prisons are over. What prisoners are entitled to and what they should have is a secure place to sleep do work or train and an adequate diet. It makes my blood boil to know that while pensioners and hundreds of thousands of other New Zealanders shiver in their homes this winter the criminals in our prisons will enjoy the luxury of underfloor heating. I get very angry when I read in the paper about old people having to eat a crumpet for tea and go to bed at 7.30 p.m. because they cannot afford to heat their homes. Criminals who are in prison have committed crimes against our society. They have said: “Your rules don’t apply to us. We’ll do what we like.” The previous Government treated criminals better than law-abiding citizens. This National-led Government has said and Judith Collins has confirmed it in this House that those days are over. 
This bill will not fix our Department of Corrections. As we have seen all too often lately and most notably in the Auditor-General’s report there are deep-seated problems in this department that only a new chief executive can fix. Under the employment law put in place by the previous Government no one can be held responsible. If we read the Auditor-General’s report and the State Services Commissioner’s report we could paraphrase them in one sentence: “There are a heap of egregious failings here. It’s absolutely shocking but no one is responsible”. We are happy to support this bill. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Kia ora tatou katoa i tenei po. On behalf of the Maori Party I say from the very start that we believe we have to do things far better in returning those who are in prison back to the community to stay and to live positive and productive lives. We have to look at new models and new ways of doing things and this bill the Corrections (Contract Management of Prisons) Amendment Bill is a part of that effort. 
Should Maori have the opportunity to bid along with others to run prisons which could be tikanga-based? Hell yeah! If members did not know this bill is an idea that has been around for some time; it has been a long time coming. As others have said just over a decade ago in March 1999 a Northland iwi Ngati Hine talked with the Corrections Corporation of Australia regarding the proposed site at Ngawha near Kaikohe. The proposal was a joint venture to participate in the administration of a prison. The Australian corporation would run the prison for 5 years and then Ngati Hine would take over the management. The Labour Government pulled the rug out from under the feet of Ngati Hine pushing them to the margins while the State came in and set up Ngawha prison right under their eyes. 
A year later New Zealand’s first privately run prison Auckland Central Remand Prison was opened. Auckland Central Remand Prison was managed by Australasian Correctional Management and lasted a glorious 5 years. I know that “glorious” might be an unusual word to describe anything to do with prisons but we think there was something to celebrate. For once the way in which our prisons are run and managed and how they treat and rehabilitate Maori was being undertaken in a way that was at long last effective for Maori. 
I want to make it quite clear that our support for Auckland Central Remand Prison or indeed for the concept of private management of prisons is motivated purely and simply by the concept of Maori solutions for Maori problems driven by Maori philosophies. We are interested in three key questions. Will private management of prisons be effective in addressing and reducing Maori offending? How will Maori management be different from State management; will iwi be profit-driven? Is something else altogether required—a whare oranga a rehabilitation centre which might be consistent with the policy of restorative justice? These are the questions that we look forward to having responses to during the select committee consideration of this bill. 
But before we get there I want to return to this concept of Maori solutions for Maori problems driven by Maori philosophies which Iwi Whanui o Tamaki-makau-rau promoted as the cornerstone ideology of their relationship with Auckland Central Remand Prison. I think it is important to spend some time refreshing our memories about the achievements that Maori experienced at Auckland Central Remand Prison as it is absolutely central to our support for this bill. Iwi Whanui o Tamaki-makau-rau as referred to by Sandra Goudie was a board representing the six local iwi who were recognised in a formal relationship with the management of the Auckland Central Remand Prison. The six iwi—Ngati Whatua o Orakei Te Kawerau-a-Maki Ngai Tai ki Tamaki Tribal Trust Ngati Paoa Ngati Te Ata and Te Waiohua—were the mana whenua tribes that signed a formal memorandum of partnership with the Department of Corrections with regard to the establishment and support of Auckland Central Remand Prison. 
The detail of the memorandum is actually quite innovative. There is a focus on consultation with iwi and there is a provision to measure the impact of cultural and spiritual values on the design and construction of the buildings. There are procedures relating to the discovery of any wahi tapu koiwi or taonga on the site. Four guiding principles form the very basis of the partnership and they are: establishing relationships with Maori stakeholders recognising and providing for Maori interests being responsive to Maori concerns and ensuring equality of opportunity for Maori. Why on earth would the Maori Party speak against that? 
I want to take us back in time to the basis of the relationship enjoyed between Iwi Whanui o Tamaki-makau-rau and Auckland Central Remand Prison because I think it stands as an example of standards that were set that could and should motivate all of our prisons to lift their game. I do not need to drill too far before we see the ongoing and compounding dysfunction in the current prison system and all of us in this House know only too well that Maori make up just over half of New Zealand’s 8229 prisoners. The question is why we would not look for new ideas for new solutions to encourage innovation and for excellence in the management of prisons. 
The standard that was set at Auckland Central Remand Prison was about improving performance in service provision cultural safety community consultation and attitude right across all levels of management. It was not as some have warned about thinking of prisons as a profit-making industry. There was not a heap of breaches and problems emerging from poor compliance in upholding standards of safety. In fact in practice Auckland Central Remand Prison raised the benchmark in many areas. 
After 150 years of prisons in New Zealand Auckland Central Remand Prison was the first prison to employ a Maori general manager and I take a moment to acknowledge the contribution that Dom Karauria made. It was an institution where the Treaty of Waitangi was not reserved for the library shelves; the principles of partnership protection and participation underpinned all operations and all procedures of management and delivery. I remind the House that the State has legal obligations to strive to respect the rights of incarcerated persons including the protection of their safety and well-being. What we saw with Auckland Central Remand Prison was that it was actually possible to have a penal institution where the emphasis was on rehabilitation and working with inmates to address crime. 
Our colleague Dr Pita Sharples in his role as Associate Minister of Corrections has also suggested that a private Maori prison could build on the work being done in the five Maori units at facilities across the country. We would never say that it is the ultimate answer or the only solution. Our preference of course would be that the chronic issues confronting the State system could be addressed that the risks and safety issues that plague our prisons could be managed and that the well-being and safety of inmates could be upheld. But achievements of this nature are far from a reality at the moment. And so we look to the possibilities of contract management to know that we can actually believe that it is possible to create a culturally safe and appropriate prison. 
Dr Greg Newbold an associate professor in criminology at Canterbury University has publicly confirmed the high standards that were upheld at Auckland Central Remand Prison. In his view the success factors that are associated with private management are that private companies will not tolerate the types of policy failures and management mistakes that we regularly see in our public prisons. Private companies are focused on accountability and credibility and there is nothing wrong with that. Perhaps another surprising source of support was that of Corrections Association National President Beven Hanlon who has acknowledged the current penal system does not work well and also says that there needs to be more accountability. 
The Maori Party is aware that Te Puni Kokiri has been consulted in the process of drafting this bill. Its recommendation was that there should be explicit and measurable performance objectives and standards relating to the rehabilitation of and the reduction of recidivism by Maori inmates. It saw that as a key element by which accountability could be achieved so much so that it should be legislated for and regularly reported on. 
The Maori Party will support this bill being referred to the select committee. Our bottom line is of course that we are opposed to the building of more prisons whether State or privately managed. Our entire aim in fact is to reduce the use of prison as a priority response to offending. But if there are to be prisons and there are Maori inmates then why not also consider opportunities for Maori to manage guide and lead us as partners in the management of prisons? It is an idea that surely is worth considering. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 I also rise in support of the Corrections (Contract Management of Prisons) Amendment Bill. May I say that I was fascinated by the speech given by the previous corrections Minister now Leader of the Opposition—unkindly described by some of his colleagues as “Phil-in”. He is now the Leader of the Opposition no less and I guess one could argue that he is also the person in the House most likely to have some knowledge of this topic as he was the previous Minister with the corrections portfolio. He said that the whole thing was driven by ideology. I just could not believe it. He was followed by colleagues who spoke on the same theme: that ideology is driving this amendment. To suggest that is to suggest that the status quo is the perfect outcome. It is to suggest that what we have now cannot be improved on and that therefore any suggested change will be a backward change that should not be considered. 
 There is an old saying and it goes like this: “If you always do what you’ve always done you’ll always get what you’ve always got.” If people are happy with what they have that is probably the best position for them to take. But I for one am not happy—and a lot of members on this side of the House are not happy—with the status quo in regard to our penal institutions in this country. We are absolutely dissatisfied with the outcome. 
One example that many have spoken of—and my colleague Te Ururoa Flavell who spoke just before me very eloquently described it—is the situation with the Auckland Central Remand Prison. It was an experiment it was something new and it was something we could look to for guidance to see what worked what did not work and what could be done better. We find when we go back and look at that example—and here is the irony of the Leader of the Opposition’s comments—that it was done away with on the purely ideological ground that we cannot have the private sector involved in the management of our prisons. Members should understand that; it is what the explanatory note of the bill states. We could not have the private sector involved in the management—not the ownership general direction or policy but just the management—of our prisons. The Labour Government did away with that. It introduced legislation to wipe it out when it was just starting to bed in and when its advantages were starting to become evident. 
We know for a fact that about 50 percent of our prison population is Maori. We have to ask some very basic questions about why that is. Why is it the case? What can be done about that? Is the current system working? Is there opportunity through individual management policies for Maori to have a greater role in what is clearly a problem within that racial group? Is that a question or not? The answer is clearly yes there is potentially an opportunity for something to happen. If we look again at the example of the Auckland Central Remand Prison and ask what happened during the private management period we see that Maori themselves took much greater ownership of what was going on in our penal system and the outcomes were overwhelmingly good. 
So why would Labour which has for years purported to represent this sector of society be so vehemently opposed to the notion of contract management of prisons? Why would it? The only explanation—and my colleague Te Ururoa Flavell overwhelmingly stated this—is that Labour wants to keep Maori in a lower socio-economic group in society so that they will keep voting for Labour. Well it is over. That show is over. It ended in 2008 and Labour needs to get used to it. That was the end of that. 
So what is proposed? The proposal in this bill is to introduce private management along the lines of what was in place in the Auckland Central Remand Prison back in 2000 when that prison was built and opened and to allow the chief executive of the Department of Corrections to have oversight of the management of it. 
David Garrett 
: There’s a frightening idea! 
SHANE ARDERN 
: Well that is what is proposed. Everybody has the opportunity to raise those issues in the select committee and I am sure the ACT Party will contribute substantially to that. 
David Garrett 
: A rhetorical observation. 
SHANE ARDERN 
: I know but it is a legitimate concern based on some of the discussion that has gone on in recent times. 
The bottom line is that what is happening now is failing. So what are we going to do differently if we do not accept this proposal that has been put forward? What is being proposed is to put this bill through the select committee process to allow for open scrutiny and proper study a proper survey of what is happening internationally. 
I was interested in some of the comments from the Green Party which used the American example and implied that the judiciary was able to be corrupted. I guess one could find some examples somewhere in the world where that has happened but New Zealand has a proud record. I stand to be corrected but I do not think there has been a single case anywhere in New Zealand where there was evidence of corruption at the top level of our judiciary. So to imply that it could happen by our allowing private management of a prison facility is a step well and truly beyond where most of us are able to leap in our thinking at this stage. 
At the end of the day it is a question of what is next and how we are going to improve the status quo. Here is an opportunity for those on the other side of the House to observe be involved be positive and perhaps have a look at what can be done and not just oppose on an ideological ground. Even though the previous Minister must have evidence that what we have been doing in New Zealand could be done better he certainly will have plenty of evidence that private sector operations in other fields operate well. 
Are Labour members suggesting that our dental services in this country are second-rate? Are they suggesting that in health our general practitioners do not operate to the standards that doctors do in the State part of our hospital system? Their Labour Government used private sector providers to transport prisoners and some shortcomings were found. Are they suggesting that all prison transport should now be managed by the State? Are they suggesting for example that all of our farms in New Zealand should be run by the State? That was tried in Russia many years ago and it did not work. Are they suggesting that all of our roading in New Zealand should be managed and funded entirely by the State? When Labour was in Government it could not do that itself. The Labour Government allowed the private sector into roading despite many of its members having said it never would. Are Labour members suggesting that the private sector has no role to play anywhere in any part of Government policy? 
I agree with Mr Goff that one of the core activities or principles of a democracy or a Government is to protect its citizens and to provide the right set of standards and services particularly in our penal institutions. We agree on that; that is absolute. But is Labour saying that as a result of our allowing private management of some of those services we will see a much lower standard or potentially a hazardous situation? Well there may be an example somewhere where that will be the case but as we know there are plenty of examples in our current system where the State has failed. The worst cases of constituent abuse that I have had to deal with as a constituency MP have been those carried out by Government departments not by the private sector. There is plenty of evidence on both sides of this argument that one is as good as the other provided that the policy framework the regulation and the things that need to be put in place to make sure it is run well are there and are administered. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I have been listening to the Government members opposite speaking on the Corrections (Contract Management of Prisons) Amendment Bill and I have yet to hear any of them put forward a real justification with any evidence of why this bill is necessary or why there will be any advantage in privatising our prisons. I have yet to hear them put anything forward. There has been no compelling justification. International evidence suggests that there is not any compelling justification. In fact this bill will do the opposite of what they claim it will do. The nearest we got was David Garrett arguing that it would be cheaper because the private prison operators could go around all the dairies in Auckland and buy all of their stale food that was past its use-by date and serve that to the prisoners. That was the closest we got to an argument in favour of the bill—that it would be cheaper because they could serve stale food to the prisoners. That was the nearest we got to an argument from the National - ACT - Maori Party Government on why it thinks it is a good idea to privatise our prisons. 
Is it not interesting how as the weeks roll on the sheep’s clothing starts to slip off more and more and the wolf beneath is revealed? This is yet another bullet in the National Government’s gun in its assault on our public services. It is another brick in the road toward privatisation which we know in their heart of hearts National members really support. Last year the National Party travelled the length and breadth of the country saying that if people voted for a change of Government not much would really change; there would be some new faces but not much else would change. But now we know that privatisation is still firmly part of the National Government’s agenda because National has not changed since Max Bradford carved up the electricity sector in the 1990s. It has not changed since it sold off New Zealand Rail in 1993 to crooks like Fay and Richwhite. It has not changed since it privatised the Wellington Airport and now it wants to privatise the prisons as well because that is what National Governments do—they privatise things. 
They do not call it privatising though. The Government is calling this one the “contract management of prisons”. That is a little bit like saying about the accident compensation scheme that it will not privatise the scheme but just open it up to competition which is effectively the same thing. The Government is being very tricky with words here in trying to deceive people into thinking that it is not privatising things when that is exactly what it is doing. The National Party is all about privatisation and this National - ACT - Maori Party Government has no mandate to do that because it went up and down the country last year saying that it would not privatise. Well that is exactly what it is doing with this bill. It is privatising. 
I can tell the House that my electorate of Rimutaka as the home of the largest prison in the country will have a keen interest in this bill. I am very proud to come from Rimutaka. 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the member. Interjections should be rare and reasonable. There is a lot of noise. I would like to hear what the debater has to say. Please continue. 
CHRIS HIPKINS 
: Thank you Mr Deputy Speaker. I have to say that the residents of Rimutaka will be very interested in this bill because we have had a rapid growth in the population of Rimutaka Prison in the last few years and I think that that is something the community is concerned about. There is absolutely nothing to celebrate about locking more people up in prison. There is absolutely nothing to celebrate about building more prison beds and more prison cells and locking more people up inside them. There is nothing to celebrate about the idea of turning the incarceration of criminals into a profit-making venture for private businesses which is exactly what this bill does. 
We know that the National Government is keen to start hocking off State assets. Because National members promised everyone they would not sell anything this term we know that their agenda in this term of Parliament is to get things all ready so that they can hock them off next time if they get the chance. They just cannot wait to do that. I can tell them that I have news for them—there will not be a second term for this National Government so they have nothing to worry about. They will not get to sell them off because the public of New Zealand do not support privatisation and they do not support the privatisation of our prisons. 
This bill is an integral part of the National Government’s agenda to shrink the size of the State and therefore to shrink away from ministerial responsibility. We can see it coming already: the first private prison escape the first murder in a private prison the first rape in a private prison. The Minister of Corrections “Crusher” Collins will stand up in this House talk tough— 
Hon Judith Collins 
: I raise a point of order Mr Speaker. It is outside the Standing Orders to refer to members of this House by names other than their real names. 
Mr DEPUTY SPEAKER 
: That is correct. The member will call the Minister by her correct name or refer to her as “her”. 
CHRIS HIPKINS 
: Thank you Mr Deputy Speaker. The Minister will stand up in this House talk tough and say that it is not her problem it is the private prison company’s responsibility. That is what this is all about. It is about abdicating the State’s responsibility. Maintaining law and order is one of the most fundamental responsibilities of any Government and this Government thinks that it should be contracted out. The National - ACT - MaoriParty Government thinks that maintaining law and order is a Government responsibility that can be contracted out to the private sector. What is coming next? Will the police be next? Will the Government privatise the police force as well? Will it privatise the Defence Force? 
Grant Robertson 
: Will the Minister privatise the police force? 
CHRIS HIPKINS 
: Perhaps that would help her avoid the little issue she has in Upper Hutt where she is trying to do away with the Upper Hutt police force by merging it with the Lower Hutt police force which she is very quiet on. 
Private prisons are accountable only to their shareholders. Public prisons are morally and fiscally accountable to taxpayers and that is the way it should be. In their quest to turn a buck the private prison companies would be encouraged to cut costs and to cut corners. They would be cutting costs and cutting corners and serving food to prisoners that is past its use-by date. I tell the House right now that that is a bad thing and that the people of Rimutaka would not support the privatisation of their prison. 
I challenge Paul Quinn who is trying to interject to come out to the Hutt Valley—he might find it on a map—and tell those people why he thinks it is acceptable to privatise the management of Rimutaka Prison. He would not get a single vote in Rimutaka if he came out and said he thought that privatising Rimutaka Prison was a good idea. Private prisons would encourage the operators of prisons to cut costs and to cut corners. We would see a lower staff to inmate ratio much less of a focus on rehabilitation cuts in staff pay and conditions and cuts in the level of staff qualifications and staff training. Ultimately if it is about a profit they will cut costs wherever they possibly can. 
Overseas experience in Australia the United Kingdom the United States— 
Hon Judith Collins 
: Aw! 
CHRIS HIPKINS 
: I know that the Government does not like evidence from overseas; it does not like any evidence at all. But the evidence shows there are huge flaws in private prison systems—ranging from bribery corruption and increased violence to increased drug abuse and avoidable suicides. The Government does not want to hear about any of that. 
Private prisons would create huge conflicts of interest. Where would be the incentive for prisoner rehabilitation when the company that incarcerates them has a financial incentive to keep them in there for as long as possible? As David Parker said prison management plays quite a significant role in determining who gets released who gets paroled and so forth. Yet the Government will try to create a profit-making incentive for those prisons to keep people in there as long as they possibly can. Surely we should be talking about ways to reduce the number of people we lock up. We should be focusing on the fence at the top of the cliff rather than putting more privatised prison buses at the bottom of the cliff which is what the Government seems interested in doing. 
There is no evidence that private prisons can be run more cheaply or more effectively. Although the cost per inmate may have been slightly less at the Auckland Central Remand Prison it did not have the larger costs associated with providing maximum security and it had fewer prison officers per inmate and paid them less than the Department of Corrections paid at other prisons throughout the country. The private prison provided a reduced service. It did not admit prisoners after 6.30 at night so if one was looking to having a prisoner admitted after 6.30 at night one would not go to any of the private prisons. Labour passed legislation in 2004 making jails solely the job of the Crown— 
H V Ross Robertson 
: I raise a point of order Mr Speaker. I am sorry to interrupt my colleague but you have already on one occasion raised the issue of interjections being out of order unless they are rare reasonable and relevant. We have had a continual barrage from the other side of the House which is not permitted in the debating chamber. The members should come to order. If they want to make a speech they should take the opportunity next time and do so. That is covered by a ruling from Speaker Statham in 1923. 
Mr DEPUTY SPEAKER 
: Thank you for those comments. 
CHRIS HIPKINS 
: Labour believes that prisons are a public service. National does not. Labour believes in public services is opposed to privatisation and will not support the bill. 
Mr DEPUTY SPEAKER 
: Before I call the next speaker I refer to the points that were made earlier about interjections. They should be rare and reasonable. Although it can be a robust debate I ask members to keep the level of noise down because other members do want to hear what is being said. 
CHESTER BORROWS (National—Whanganui) 
: 
 This is a robust debate. We have to bear in mind that each side of the House has a philosophy. The previous National Government brought in private prison management at the Auckland Central Remand Prison and that remand centre was run by a private provider. That was canned by the previous Labour Government for a purely philosophical reason and the purely philosophical reason it gave was that the State should be the only body to run prisons in this country. That was the only reason. At the time that Labour canned the private running of prisons its members did not go on about what was happening in the United States and they did not go on about what was happening in Australia or anywhere else in respect of the private running of prisons. All they said was that it ran counter to their philosophy so they were going to shut it down and do things differently. Now we have had a change of Government. This particular Government campaigned heavily on the use of private managers to run State-owned prisons because of the benefits that they afford to inmates and the taxpayer. 
I take the previous speaker up on a number of points that he made around the private delivery of prison services within this country. One point he made fairly late in his speech was that we should concentrate on providing fences at the top of the cliff instead of privatised buses at the bottom of the cliff. Who actually owns and operates the buses in the prison system at the moment and who did under the last Government? It is and was Chubb. Chubb was contracted by the Labour Government to provide transport services for correctional institutions. It has done so for years and it continued to for 9 long years under the Labour Government. Labour thought that was a really really good idea. 
Labour members also talked about the privatisation of police services. Of course we know that in this country we have private provision of core police services right across the whole range of police services. If we look at who is driving police prisoners to and from the remand centres and the courts whom do we see doing that? And who did that under the Labour Government? It was private providers. When we needed scene guards at the scene of a serious crime who was doing that? It was security guards. Who was paying their bills? It was a private provider paid for under contract by the police. 
All around our provision of Government services in this country whether it be in the area of health education police corrections or justice we have private providers. I tell members to look at the New Zealand record that is there before your eyes if you care to look at it—I apologise Mr Deputy Speaker before someone jumps up and takes a point of order; I was not intending to draw you into the debate. If we looked at the provision of services at the Auckland Central Remand Prison what would we find? We would find that rehabilitative services were offered at the Auckland Central Remand Prison that were not offered anywhere else for remand prisoners in this country. Under the previous Labour Government if someone was in prison for fewer than 2 years he or she got nothing absolutely nothing in terms of rehabilitative services within a State prison. I am pleased to say the National Government is looking at introducing those rehabilitative services at an earlier stage than that. In fact if people were in prison for a longer period than 2 years they got nothing until they had been there for two-thirds of their sentence. 
Last week I was privileged to attend Rimutaka Prison and the graduation of people from a Sycamore Tree programme run by a private provider. Who is the private provider? It is Prison Fellowship. It was very interesting to speak to some of the prisoners there and to one particular person who was able to tell me how easy it was for him for several years of his prison term to access drugs at any time. They appeared through the flap in his prison cell at 2 a.m. There were no prisoners wandering around the corridors at 2 a.m.; the people doing that were all prison officers who were employed by the State. 
When we look at the way the only privately run prison has been operated within this country we see there were fewer escapes from that remand centre than from prisons run by the State. It had fewer beatings fewer problems fewer people put on report and better outcomes for the people who were there. It was so much better than what was being offered within the State system that when the Labour Government renationalised that particular facility what did it do? It took over all the rehabilitative services that were previously being offered in the private prison because they were so good and because the prison had had such a fantastic record with them. 
Some very good points were made by my colleague Te Ururoa Flavell from the Maori Party in respect of the ability of iwi to be able to contract as private providers of prison services. I was interested last week when I attended the Te Ihi Tu project in New Plymouth. It is currently on its last legs but it is contracted to provide services to the Department of Corrections. The measures that were run over that iwi-based programme were so stringent that when we stack up the review ordered by the Department of Corrections with the response from Te Ihi Tu Trust we find it seems to be very much wanting. I have some real fears regarding the ability of iwi-based programmes to be able to compete on a level playing field with others who are competing for the same contracts as they are being run by the department at the moment. I look forward to the further work that the National Government will do to maintain the level of service delivery across all the needs of the prison population.  
The point that we need to bear in mind is that the owner of the prison facilities will continue to be the State. The fact that we have private providers contracting to provide services is really based on one premise and one premise only: we must get value for money out of the money that we put into the corrections system and the people who go into jail should always come out better than they were when they went in in terms of their ability to live a rehabilitated life within society. If people go to jail having literacy and numeracy problems then before they come out someone should have addressed those problems. Well under the previous Labour Government that did not happen. If a person is one of the 83 percent of people in prison who have a drug or alcohol dependency problem then someone should address that. Whether a person is in jail for more or less than 2 years someone has to address that problem and it was only in the last 18 months of the previous Labour Government that we had anywhere near the number of drug and alcohol rehabilitative beds that we needed in order to be able to cater to that problem. Only 44 people attended drug and alcohol residential rehabilitative services in the year 2006. That figure rose to 174 in the last year that Labour was in Government yet we have a prison population of 8500 people. That was absolutely disgraceful! 
It will be a much better record when we turn around and look at the record of the private provision of penal services in this country. I am proud to be standing here in support of the Corrections (Contract Management of Prisons) Amendment Bill. 
CARMEL SEPULONI (Labour) 
: 
 I stand to oppose this Corrections (Contract Management of Prisons) Amendment Bill along with all of my Labour Party colleagues. Just as Mr Hipkins said earlier I have heard absolutely nothing from the National Government to give us any reason to think that there is a rational explanation as to why we might support this bill at all. The No. 1 concern obviously from members on this side of the House is that National’s desire to privatise prisons is basically déjà vu. Here we go again: privatisation privatisation privatisation. 
Moana Mackey 
: The answer to everything. 
CARMEL SEPULONI 
: The answer to everything. Let us privatise the corrections system and let us privatise our prisons. Let us privatise our police force next! Let us privatise accident compensation let us privatise education and let us privatise health. It is just privatisation privatisation. The agenda is very clear now and New Zealand knows it for sure. Labour said before the election that National would be out to privatise everything and here we go. We have had 4 months of a National Government and the agenda has been made very clear. 
The Labour Party is fundamentally opposed to this move with the No. 1 reason being that we believe that the prison system is a core public service. Given that it is a core public service it would be completely inappropriate to turn it over to the private sector to make a profit from it. I ask why we would want the private sector to make a profit out of people who are offending. Those people are putting public safety and everything else at risk. Why would we want people to make a profit out of that? 
Metiria Turei from the Green Party made a good point earlier with regard to what happened with the Auckland Central Remand Prison when it was managed by the GEO Group which was previously known as the Wackenhut Corporation. She raised the point that basically the prison was a loss-leader and that yes things went OK but the reason that things went OK under that leadership was that the corporation had big plans— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the member but the time has come for me to leave the Chair. 
Debate interrupted.