Corrections (Contract Management of Prisons) Amendment Bill — In Committee Speaker Recalled In Committee Third Reading 
Text is incorporated into the Bound Volume 
Corrections (Contract Management of Prisons) Amendment Bill — In Committee Speaker Recalled In Committee Third Reading 
[Sitting date: 24 November 2009. Volume:659;Page:8078. Text is incorporated into the Bound Volume.] 
Corrections (Contract Management of Prisons) Amendment Bill 
In Committee 
Part 1 Amendments to allow contract management of prisons 
Hon RICK BARKER (Labour) 
: 
 Seldom does this House get bills before it that are completely ideologically driven. The Corrections (Contract Management of Prisons) Amendment Bill is one of those rare bills. It is completely ideologically driven. There are no good reasons for supporting this bill; in fact all of the evidence is to the contrary. 
The right wing has as its philosophy cutting taxes privatising contracting out and deregulation. This Government is displaying all of the characteristics of an extreme right-wing view. This bill is one of those displays as it is about contracting out. The Law and Order Committee heard in submissions on the bill that the annual cost per prisoner to the public of operating the Auckland Central Remand Prison as a private prison was $33900 but the cost when the State ran it was $32000. As privately running it meant an increase in cost the committee was left wondering over and over again why we would do so. We heard no good reason other than simply ideology. When we look around the world at experiences in the United States Canada and Britain we see that all of the evidence shows that private prisons do not work. 
The second very important point is that we are considering contracting out one of the most powerful and fundamental rights that this Parliament takes upon itself which is to incarcerate its citizens. The executive arm of Government does not do that. The judiciary does not do it as of right. This Parliament sets the laws this Parliament gives the judiciary the power to put people in prison and deprive them of their liberty and this Parliament elects an executive to administer the prisons that undertake that work. It is not the executive that delegates power from the Minister of Corrections to the Chief Executive of the Department of Corrections; it is this Parliament. 
This matter brings us to several of the amendments that the Labour Opposition is moving. We have put forward three Supplementary Order Papers that would ensure that Parliament has direct scrutiny of the operation of prisons. The Government has put forward this bill on a “trust us we know what we’re doing” basis. It is saying that the chief executive of the Department of Corrections under the observation of the department’s own auditors will supply us with sufficient good information. Well I do not accept that at all. This Parliament has an Officer of Parliament in the form of the Controller and Auditor-General because it does not have complete faith in the audits that executives may choose to take. Some people think that once there has been an audit that is it all is done. But several names show the failures of auditors: Enron WorldCom and Arthur Andersen LLP. All of those firms were thoroughly audited yet collapsed and crashed spectacularly. The paperwork was perfect. That shows that independent scrutiny is important. 
One of the amendments we are moving Supplementary Order Paper 88 will give the Office of the Controller and Auditor-General the authority to go into prisons and ask directly for information. The select committee considered this matter and received advice that the existing powers are sufficient for the Office of the Controller and Auditor-General but Labour’s view is that the powers still leave the office at arms length with no direct ability to investigate for itself. One has to ask why this is. The answer is simple: the Department of Corrections driven by the ideology of the current Government wants to contract out prisons. If it does so it will inevitably contract them out to foreign companies from Australia the United States Britain—you name it. How this export of New Zealand dollars will be good for New Zealand I do not know. The Government has not explained this yet but no doubt the Minister of Corrections Judith Collins will tell us how the export of profits from our prisons is good for New Zealand. I can see no logical argument that would demonstrate that. 
The second thing is that these will be privately run institutions. Companies that run them under contract will not be subject to the scrutiny of the select committee and will not be subject to the direct scrutiny of this Parliament. We will give them the power to hold people in prison and deprive them of their liberty and we are expected to believe that we can trust them to do everything well. Well I do not believe that because the committee heard from submitters that figures had been massaged. Staff who were on the job in private prisons testified to the committee that they massaged figures to suit their employers—that is what they wanted—and to suit the administration of the day. I simply do not trust this Government with these matters. I believe very strongly that the Opposition and Parliament should have the ability to scrutinise these activities. That is why Labour is moving an amendment to ensure that the Office of the Controller and Auditor-General can on its own initiative if it so chooses go into private prisons interview staff and go through all the details itself rather than relying on the advice of the Department of Corrections or its auditors. 
We also believe as shown by our Supplementary Order Paper 87 that this amendment should apply to the Ombudsman as well. The argument has been put that the Ombudsman can get access to this information but again it can do so only indirectly; it cannot get it directly on its own motion. We believe that that is a weakness. 
The third amendment put forward by the Labour Opposition Supplementary Order Paper 86 will restrict the length of contracts. We are very mindful that we are dealing with public money. This is not the money of the Department of Corrections and it is not the money of the Minister; it is taxpayers’ money. The Opposition is very concerned to ensure that the money put into these contracts is well spent. We do not want to bind future Parliaments by having prison contracts that run for 12 20 or 25 years. We believe that the next Government that comes in in 3 years’ time must be able to examine such contracts to see whether they suit that particular Government. The contracts are hardly likely to suit it because the department’s own figures show that on every measure contracted prisons are more expensive to run than publicly run prisons. The American experience shows that they are more expensive and run worse than those run directly by the State. The Canadians experienced this and got rid of private prisons because they were poor performers. The British got rid of them also because they were poor performers. They do not work. 
If this Parliament gives power to the judiciary to deprive people of their liberty and gives power to the executive to hold people in our prisons then as a fundamental principle it should have the right to inspect and scrutinise that work directly. If a prison is run by a private company we will not have that power. The power will be held by the private company and we will not have the ability to haul the company before the select committee to interrogate it. We can talk to the Department of Corrections but of course the department and the Minister will have a vested interest in ensuring that the figures look good. They will work with staff to massage the figures as we have already been told by people who have worked in privately run prisons. They made sure that those prisons looked good—that is exactly what they did. 
Nothing we have heard so far justifies this legislation other than ideology. It is ideologically driven because all of the facts stand in opposition to it. It is ideologically driven because National believes in contracting out. There is no justification for it at all. 
If members look at the legislation that has been put forward they will see that it states in new section 199 to be inserted by clause 5 that in the contracted prison standards are to be “no lower” than in public prisons. The Minister in the chair says that the privately run prisons will all be better than public prisons. Well why would one not state in the legislation that contracted prisons must always perform better than publicly run prisons? Of course National will not write legislation to that effect because it cannot deliver on it. The only restriction on our prisons from doing better is a lack of resources. The people who run our prisons are very able very capable and very innovative and they will do better if we give them resources in every particular regard in terms of holding people in prison. The restriction on them has always been by way of resources. 
This legislation not only is ideologically driven but also lacks ambition. It lacks ambition because National wants to see privately run prisons do only no worse than those in the public sector. This lack of ambition will be at a cost to the taxpayer. Every figure that the Law and Order Committee received shows that privately run prisons were more expensive than State prisons. There is no question about that. National members of the committee tried to get figures to show that privately run prisons were better but they could get none—not one example of how they were better. The world experience shows that contract prisons are worse and inferior to those run by the State. 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 It is a pleasure to follow that member Rick Barker. It was particularly good to hear him talk about the wonderful work of the Department of Corrections. I am sorry to say that in the Law and Order Committee today during the review of the Department of Corrections Rick Barker did not show any confidence in the department at all. In fact he quoted extensively some terrible recidivism rates and he talked about how the department should be ashamed of itself. Then the member realised as one of our members pointed out that he had in fact been referring to the 2007-08 annual report all of which was under the previous Labour Government. So when that member now wants to praise the Department of Corrections I say good on him for doing so because there has been a massive turn-round this year under this Government and it is good to hear that we finally have a good Government helping and working with the department and great performance. 
That member also raised issues about cost. I did not realise that the Labour Party was such a low-cost option but obviously that is what it wants. Prisons are not just about incarcerating prisoners; they are actually about keeping the public and our staff safe and they are also about rehabilitation and that is why this Government is committed to the rehabilitation of prisoners. We know that when we have a prison being run efficiently along the lines so that we get the best value for money we have more money to spend on rehabilitation. We know from the Auckland Central Remand Prison experience that the member talked about that the prison was the only remand-only prison in New Zealand at the time it was running. Therefore comparisons with others are somewhat wonky. Frankly the Auckland Central Remand Prison contracted for 70000 hours of rehabilitation a year for prisoners and the last year the prison was in operation it actually produced about 120000 hours of rehabilitation—well above its contracted level. Yet at the same time remand wings in our prisons were not doing that. When we are looking at numbers it is important to be realistic about what we are talking about. 
The people who privately ran the Auckland Central Remand Prison brought iwi into prison management. They did a fantastic job. I went to see that prison when it was running—and as a lawyer I had been into other prisons before—and I knew that that prison was the best prison I had ever visited. The reason is that the whole attitude was about respect. When I went to the prison the staff said that they ran a culture of respect. Earlier this year I went to see four prisons in Australia. The member who has just resumed his seat Rick Barker says that this is all ideologically driven. Well the prisons I went to see in Australia were all in Labour-run states in Australia so I am not sure about the ideology there. In fact they have been Labour-run states pretty much since Adam was a cowboy. We went to see two in Victoria and two in Queensland. What I saw there were maximum security prisons where I could walk around with other visitors in amongst the prisoners in a situation where I actually felt safe. That is not something we could say about all of our maximum security prisons in New Zealand. I also saw rehabilitation and I saw rehabilitation working. 
Hon Lianne Dalziel 
: You’re talking about a remand prison. 
Hon JUDITH COLLINS 
: They were not remand prisons. These were actually maximum security prisons. 
Hon Lianne Dalziel 
: A remand prison is slightly different. 
Hon JUDITH COLLINS 
: No they were not actually. There was one that was; all the others were maximum security prisons. 
Grant Robertson 
: Oh one was—so all the others weren’t? 
Hon JUDITH COLLINS 
: Three were not of the ones I went to. I saw some rehabilitation and I saw some efforts being made towards securing the best outcomes for prisoners. We already do what we can in the corrections area. The Department of Corrections has really improved in its performance this year and it is great to be able to say that. But we can do better. One of the ways of doing better is to be able to benchmark ourselves against international standards and look at what we can do. 
The member who has just resumed his seat talked about cost cost and cost again. But private prisons in New South Wales cost 32 percent less per prisoner than public prisons. The member did not want to talk about that. In Victoria they cost 11 percent less than public prisons. So when we are talking about cost we should look across the ditch and see what has been happening in states where there have been privately run prisons for years. The member also talked about the State needing to take over this role because of a constitutional issue. Well actually we also have privately run and contracted transporting of prisoners. In fact that happened under the previous Labour Government. I did not hear Labour members talking then about it being ideologically impure and I did not hear them talking then about the need to have the State doing every single thing because otherwise it would not be right. 
One of the great things about having privately run prisons apart from benchmarking is the fact that we can actually have fines and incentives for programmes and for performance. That is not something we can really have in the State-run system. What we would like to be able to do is look at how we can make rehabilitation and a lessening in the rate of recidivism part of our contract management. Members also talked about the need to have the Auditor-General roaming through our prisons. I do not think that is necessary when we have it quite clearly stated in the legislation that there will be prison monitors appointed by the Department of Corrections who will be responsible to the chief executive. One of the other good things about that clause if the member wants to look at it is that it means those monitors have to be changed on a routine basis so that we do not get people who get captured by the environment in which they are working. I think that is incredibly important. 
Over the past few months people have said that we have been talking to people who have been running privately run prisons. Yes we have. A lot of people who have come to see us have talked about privately run prisons and we have been to look at them in Australia. I can say that every single one of the people who have talked to me has made it very clear that we want strong iwi involvement in prisons in this country. Fifty-one percent of our prison population is Maori. That is a shocking statistic and it is certainly not getting any better. I expect that we will have a great input of iwi in particular into rehabilitation. We think that is absolutely crucially important and that is why I would love to be able to see the Labour Opposition come out and support the work of my Associate Minister of Corrections Dr Pita Sharples—in particular in relation to the rehabilitation unit that he is putting together. Yet all we heard from the Labour Opposition—actually from Mr Cosgrove to be fair to the rest of its members—was about a race-based justice system. Actually that is the sort of nonsense we have heard from that party in Opposition over prisons. What we should be doing is looking at what works. 
Hon Lianne Dalziel 
: Do you want me to go and get the  
Hansard  
of every time you said that? 
Hon JUDITH COLLINS 
: No—well I tell the member to find one. In fact I think it is extremely important that people look at what works. That is why we are putting through this bill with the support of the ACT Party United Future and the Maori Party and I would like to thank those parties for their support. That is what we are doing. It is about good outcomes for people and good outcomes for all New Zealanders. 
Chris Hipkins 
: Tell us the evidence; there is no evidence. 
Hon JUDITH COLLINS 
: I know that Mr Hipkins does not think there is any evidence at all in relation to the Maori units that Dr Sharples is looking at but I say to Mr Hipkins that I think it is really important to give things a go and go for the best outcomes. We have 20-odd prisons in this country. We will have at least two that will be privately run. That is what we are looking at—not wholesale privatisation but a reasonable benchmarking against which we can benchmark ourselves. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Article 3 of the Universal Declaration of Human Rights states: “Everyone has the right to life liberty and security of person.” and that is what this debate is about. The reason we are debating this matter from a human rights perspective is that the implementation of the Universal Declaration of Human Rights is something we have responsibility for. That responsibility for the deprivation of liberty lies with the Crown and it simply cannot be contracted out to just anyone the Government of the day considers might be appropriate. 
I think that the Minister in the chair the Hon Judith Collins needs to think seriously about the consequences of a Supreme Court of Israel decision that came out late last week on Thursday 19 November. It is a very interesting case and I believe that it has relevance to this particular debate because essentially the Supreme Court of Israel has overturned the privatisation of prisons in Israel. It has done so on constitutional grounds because of the fundamental breach of human rights that the process recommends. I do not have the actual decision in front of me but I do have a report of the decision. It reports the President of the Supreme Court of Israel as saying: “Israel’s basic legal principles hold that the right to use force in general and the right to enforce criminal law by putting people behind bars in particular is one of the most fundamental and one of the most invasive powers in the state’s jurisdiction. Thus when the power to incarcerate is transferred to a private corporation whose purpose is making money the act of depriving a person of his liberty loses much of its legitimacy. Because of this loss of legitimacy the violation of the prisoner’s right to liberty goes beyond the violation entailed in the incarceration itself.” The president also argued that “in a prison run by a private company prisoners’ rights are undermined by the fact that the inmates are transformed into a means of extracting profit.” 
Sandra Goudie 
: Rubbish! 
Hon LIANNE DALZIEL 
: “Efficiency” the president wrote “is not a supreme value when the most basic and important human rights for which the state is responsible are at stake.” 
Sandra Goudie 
: What a load of rubbish! 
Hon LIANNE DALZIEL 
: I know that members opposite do not care about human rights. I understand that and the interjections coming from the chair of the Law and Order Committee I expect from her because she does not have the same background as her colleague next door to her who at least has picked up a law book and read it which could be surprising. But maybe the Minister of Education could read a book to her—maybe that would be a good idea; if it had enough pictures we would probably be away laughing. 
But the point that I want to make is serious and the serious point I want to make is that this decision is the beginning of the end of the international privatisation of prisons. It is the beginning of the end because I believe that this case will become the foundation stone for cases that will be taken to the International Court of Justice which will overturn what has been a fundamental breach of the Universal Declaration of Human Rights by the privatisation—for profit—of the deprivation of liberty. I am not arguing that any of the individuals concerned are not entitled to have their liberty deprived; they have committed crimes for which they will be held accountable. But this case says and puts it very well that the loss of legitimacy when profit is being made out of their incarceration is beyond that for what would otherwise be a violation of a basic human right. So I believe that the Minister does need to respond to this very recent decision. It is the beginning I believe of a series of cases around the world where the fundamental tenets that support our justice system in this country will be challenged in international jurisdictions and where those of us who have gone down this track will be held to account. 
The second thing that I will say is not so much in relation to that decision but to what happens when there is a change of Government because we have made it absolutely clear that this will end in the same way that it ended after Labour became the Government in 1999 and inherited the Auckland Central Remand Prison under private management. I would like the Minister to respond to the content of the report. I know that she has probably not read this part of the report back from the Law and Order Committee because it comes under the heading “New Zealand Labour Party minority view”. But I am assured and the footnote states that the source of the information—and it is reprinted exactly—is from the “Department of Corrections … request for further information from the Law and Order Committee”. So this information comes from the Minister’s department and I just want her to respond to these per prisoner costs as tabled in the report. 
When the Auckland Central Remand Prison was under private management from 1 July 2004 to 30 June 2005 the cost per prisoner was $35700 for operating costs only and $57280 inclusive of property-related overheads to look after a single prisoner. Remand prisoners held in other public prisons in that same period were only $32000 and $50208 by way of comparison. There are those who would say that the Auckland Central Remand Prison had particular additional costs so that in the year after it went back into public management it would of course have cost more because costs would have risen. But in fact no the costs went down. The comparable figures per prisoner were $33900 and $55853. 
I am really confused about the Minister’s comments that the private system is more cost-effective. Why then did it cost more when the Auckland Central Remand Prison was under private management from 2004 to 2005 than it cost from 2005 to 2006 under public management? Obviously at that time when other costs had gone up the system under public management still cost less than it had cost the year before under private management. That to me is the second element of the argument against the privatisation of the prison function. Although there are statements as to privatisation being more cost-effective in fact I cannot find examples anywhere of where it is. And the figures that the Minister has used to compare public with private of course do not mention that prison officers get paid less in a private prison and that the ratio of officers to prisoners is substantially lower as well. I do not think that it is reasonable to say that we are comparing apples with apples. I think we heard the comparisons from someone today about “apples and apples” “oranges and oranges” and “apples and oranges”. But the point is that no comparison can be made unless we actually have a clear statement as to the nature of the terms of engagement for officers. 
Officers do this important work on our behalf. This is not work that anyone would choose particularly to do and the fact that we have loyal prison officers within our corrections system willing to undertake that role on our behalf and on behalf of the State is something that we should value and not contract out to the lowest bidder. 
That brings me to my third point which is the ability to have genuine supervision over what occurs in our prisons. I totally support the Supplementary Order Papers that have been tabled by my colleague the Hon Rick Barker. The first is in relation to the Ombudsman; the second is in relation to the Auditor-General. I do not think it is good enough to have a prison reporting through a department. There is nothing better than to have the direct oversight of those who have the standing and the independence of both our Ombudsman and our Auditor-General in respect of ensuring both that the processes being conducted within the corrections system are being conducted in a proper manner and that there is accountability and transparency back to this House. That is where the accountability and transparency must lie. If it does not lie here then I really do think that the Government has lost the plot as far as our obligations go. 
The third Supplementary Order Paper that my colleague has tabled is to ensure that no contract is let for more than 3 years. That is a very good Supplementary Order Paper because it makes it very clear to anyone who is possibly even thinking about taking advantage of contracting for one of our prison managements that they will have that contract overturned after a change of Government. 
SANDRA GOUDIE (National—Coromandel) 
: 
 After listening to the Opposition one would think that the end was nigh. I just cannot believe how overblown it is making this whole issue. I want to make a few comments and I will quote from a report around contestability. There are three things I want to talk about. One is the Australian study comparing two new-generation public sector prisons where the operating arrangements in the industrial award have been negotiated by the state Government under an explicit threat of market testing with two old-style prisons. 
Grant Robertson 
: Take it slowly Sandra. 
SANDRA GOUDIE 
: Well there are three quotes here so it could take a while. I would be surprised if the Opposition members are listening actually even though they need to learn a bit. 
Hon Member 
: They don’t understand Sandra. 
SANDRA GOUDIE 
: Well that is the problem and I guess this issue is mostly around union protectionism really. The bottom line is that competition actually does work. 
The Australian report states: “The authors of the study compared overtime and sick leave which were regarded as major sources of inefficiency in the traditional prison estate and found significant improvements. To our knowledge this is the only study that has explicitly explored the efficiency gains from threatened competition.” Well that is what Labour members do not like. They cannot stand competition—the idea that somebody might make one dollar more than somebody else. They cannot stand that. They would rather have inefficiency because they cannot stand competition. They cannot stand the fact that competition generates innovation and new ideas and a new way of exploring how to do things. 
The report goes on to state: “One of the most significant impacts of introducing competition into custodial services has been to force prison managers to explore new service designs and management regimes. … A national survey of 65 private correctional institutions across the United States … found that on average staffing levels were … lower … Moreover where public prison operators were exposed to competition this was one of the most common ways in which they strove to reduce their costs.” Then it goes on to say—and this is the final quote I will use—“Competition has played an important role in the adoption of innovative new approaches to prison management”. Is the Opposition listening to this? 
Hon Darren Hughes 
: No. 
SANDRA GOUDIE 
: Well the Opposition members should listen because time and time again they miss the point. 
Jonathan Young 
: It’s all about ideology. 
SANDRA GOUDIE 
: That is right—it is all about ideology. It is not about the reality of the situation. The Opposition is driven solely by its ideology and its love of unions. The Opposition wants to protect union members’ jobs and make sure they are secure. Competition does bring in new ideas and new approaches to prison management and brings the dissemination of best practice across both the public and private sectors. The two sectors actually benefit each other. 
The last argument put forward by Ms Dalziel was about the lack of monitoring and accountability. Well the fact is that there is a tonne of it in the bill as the Opposition members will see if they look at it. Some of that monitoring and accountability was generated through good discussion from the members of the Law and Order Committee. There were times when we had reached consensus on some of the ways forward but there were other times of course when we could not possibly do so because the ideology was a bit of a roadblock. There is plenty of monitoring and accountability. A monitor is to be appointed for each contract prison and the chief executive can appoint further monitors for different and particular purposes. There are also assistant monitors. So there are primary monitors monitors for particular purposes and we also have assistant monitors. We actually have three levels of monitoring. 
Hon Darren Hughes 
: It’s a land of opportunity this country. 
SANDRA GOUDIE 
: Just how much oversight does this Opposition—this Labour Opposition; the nanny State party—need? The Labour members just cannot get away from the fact that they are not happy unless they have a whole heap of monitors. [ 
Interruption 
] That is absolutely right; they do not trust anyone. 
What is the next Opposition argument? The next argument is that it is wrong that the running of prisons should offer the potential to make a profit. Well for goodness’ sake! If it were not for a bit of profit we would not survive in the economic world today. The Opposition members just do not understand business. They do not understand how to make a buck and we can understand why that is the case. 
DAVID GARRETT (ACT) 
: 
 It is rather surreal sitting here and listening to this debate about ideology from the other side of House. Let me get this right. I will go slowly. Your ideology is like this: State control good— 
The CHAIRPERSON (Eric Roy) 
: Order! 
DAVID GARRETT 
: I am sorry Mr Chairperson. I meant Labour—and the Greens even more so but I will come to them in a moment. Labour’s ideology is: State control good private enterprise bad. So to say that this measure is driven by some sort of mad right-wing privatising market ideology is really quite amusing. I expected far better from the Hon Rick Barker whom I happen to respect considerably as a man of integrity and experience. But my incredulity was increased even more when the Hon Lianne Dalziel got to her feet. She is a graduate of the same law school I went to. 
Hon Darren Hughes 
: She got better marks. 
DAVID GARRETT 
: I doubt that actually I say to Mr Hughes. We can compare academic records any time the member likes. When I was at law school our court hierarchy went like this: the District Court the High Court the Court of Appeal and the Privy Council. Now thanks to a—thankfully departed—politician who is now on the far side of the world our hierarchy of courts is like this: the District Court the High Court the Court of Appeal and the Supreme Court—that monstrosity over the road. 
Ms Dalziel was at law school before me and at no time to my knowledge—and I have done a wee bit of legal history—has the Supreme Court of Israel been part of our court hierarchy. I find it very amusing that Ms Dalziel stands there brandishing a judgment from the Supreme Court of Israel and cites it with approval. If I am not much mistaken I have heard that party over there Labour and certainly that one down there the Greens bagging the country of Israel at great length and on many occasions. Those parties say they are Zionists and have oppressed the Palestinians. Well I happen to agree with them. Israel did not come into an uninhabited desert as they would have us believe and make orange groves out of nothing. They came in and drove the Palestinians out. So for Ms Dalziel to be quoting the Supreme Court of Israel is as her colleague Mr Cosgrove says frequently a bit rich. So that is point No. 1. 
Now talking of ideology the more ideological party here is the Greens. Former Green member Mr Tanczos has admitted in this House that although the Auckland Central Remand Prison had better indicators on suicide suicide attempts violence to guards and violence by prisoners against each other—he admitted that all that was true—the Greens were against it. He admitted that even if that result were repeated in spades the Greens would be against it. That is ideology is it not? Let me ask the Green Party a question. Let us say for example that a private prison run in conjunction with an iwi reduces Maori recidivism from 70 or 80 percent as it is now to 25 percent in 5 years. I ask Mr Clendon whether the Green Party would still be opposed to private prisons. The answer is yes because of ideology. It does not matter what works. It does not matter what the indicators are. The Greens would be opposed to it. What about Mr Hipkins? If we establish a private prison—and it will happen as the member knows—and if in 5 years the recidivism rate is 25 percent less than it is now will you still be opposed to it? 
Chris Hipkins 
: There is no evidence. 
DAVID GARRETT 
: No just answer the question—it is quite simple. Would you still be opposed to it? 
Chris Hipkins 
: It’s completely hypothetical. 
DAVID GARRETT 
: You obviously have not read the Standing Orders. You are allowed to ask hypothetical questions in here even in question time. 
Hon Darren Hughes 
: I raise a point of order Mr Chairperson. When the member starts lecturing other members about reading the Standing Orders 
 
 and his entire speech consists of references to “you you you”—“you” being the Chair—I think that is sailing pretty close to the wind. He should come back to Part 1 of the bill. These references to “you” are just unbecoming. 
The CHAIRPERSON (Eric Roy) 
: I did actually call order there before but I had in my excitement muted myself. So I take responsibility for not being able to impart that. But the member must mind his pronouns. Any member gets a 5-minute call. If members seek another call and I think they have not made best use of their time it is my judgment as to whether they will get an additional call. That is my methodology—I probably should not be giving away secret information but members in the best interests of the Parliament ought to be making the best use of their time. 
DAVID GARRETT 
: I stand corrected Mr Chairman. Thank you very much. I simply make the point that on the limited experience we have private prison operation works. We will give it a go. We will see. ACT is supposed to be the ideological party but on this occasion we in ACT say “Let us see what works.” 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 Part 1 of the Corrections (Contract Management of Prisons) Amendment Bill is fundamentally wrong in principle and fundamentally wrong in practice. Mr Garrett wants evidence and I will come back to that shortly. 
We need to be absolutely clear that what takes place in our correctional system and the taking away of liberties are fundamental responsibilities of Government. If we want to go down the path of privatising the taking away of individuals’ liberty we are on a very slippery slope in terms of the kind of society we will live in. It is a core function of Government to take that liberty away—a core function. 
Jonathan Young 
: The courts do that. 
GRANT ROBERTSON 
: No I say to Mr Young that it is a core function of this Parliament to make laws. When we make a law like this we go down a very dangerous path. We have to accept that when we pass laws in this Parliament there is accountability and responsibility. I want to return in this call or perhaps in another one to the Supplementary Order Papers that Mr Barker has put forward on the matter of accountability. If the driver of our prison system is profit the safety of our communities and the safety of the people who work in our correctional system will be compromised. If the driver is profit the driver is not the safety of our communities. That is the evidence from around the world. It is fundamentally wrong in principle to go down this path. 
I do not think members opposite should dismiss the decision of the Israeli Supreme Court quite so quickly because it is quite clear that those people who have driven the opposition to private prisons in Israel know that this is an issue that will be taken up globally. This is a major legal challenge to the rights of private prisons to actually exist and it will be picked up. Whether or not members opposite agree with that legal challenge or think that Israel should not be considered in this debate the challenge will be picked up by the opponents of private prisons. The opponents of private prisons in New Zealand do not come just from the Labour Party and they do not come just from the Green Party; they come from right across the sectors of society. The Catholic Church in New Zealand opposed it. The Howard League for Penal Reform— 
David Garrett 
: There must be another lawyer over there somewhere who knows something about the law surely. 
GRANT ROBERTSON 
: I say to Mr Garrett that this bill is actually about a fundamental responsibility of this Parliament. Lawyers are not the only people who have an opinion about this. It is a vitally important law and it will be taken seriously on this side of the House. 
The Israeli Supreme Court said quite clearly that the right to enforce— 
David Garrett 
: Who cares? 
GRANT ROBERTSON 
: I say to Mr Garrett that people will take this case up and the Government needs to have a response. I want to know whether the Minister of Corrections knows about this decision. Has she been briefed about it? Can she take a call and let us know whether this Government is ready for the legal challenge that will come in relation to the right to have private prisons? That legal challenge will be coming in New Zealand and around the rest of the world and the Government needs to know how it will respond to it. 
This bill is also fundamentally wrong in practice. Sweeping statements have been made throughout this debate about how private prisons will be more efficient and more effective yet the evidence right around the world is that that is not true. In the United States we know that from a report in 2001 describing what happened when prisons were privatised. It makes absolutely clear that the quality of services and safety was compromised. Abuses found in privately run prisons included low wages for staff poorly trained staff bad food and overcrowding. That is from Project Censored of the Sonoma State University in California. It describes a destructive pattern of extensive inmate idleness a lack of correctional experience on the behalf of almost all staff and a search procedure that could fairly be described as a reign of humiliation directed indiscriminately at the entire prison population. That is the evidence from the United States of America. 
We could go to the United Kingdom where in 2008 10 of the 11 private prisons in the United Kingdom were in the bottom quarter of prisons. The United States National Council on Crime and Delinquency said—and here is the evidence; this is its quote—there was “no data to support the contention that privately operated facilities offer cost savings over publicly managed facilities.” The privatisation of prisons is wrong in principle it is wrong in practice and it does not save any money. 
We can go to Australia. In fact the Minister has told us already that she went to Australia to look into this. Firstly the briefing the Minister herself got for her trip to Australia from the Department of Corrections advised that there was no compelling evidence to demonstrate privately managed prisons provide higher-quality services better outcomes or significant cost savings in the correctional system. That is what the Minister was told by her own department. But when she went to Australia she could have perhaps looked into the Metropolitan Women’s Correctional Centre in Victoria. It was privatised. After an inquiry in 2000 found widespread drug use deaths in custody poor training and cover-ups the Victorian Government was forced to take that facility back into public control. In Canada in 2006 the Government returned the country’s one private prison to the public sector because there had been no appreciable benefit to the country and to the correctional system. That is the problem with this bill: it is wrong in principle but it is also wrong in practice. 
When we come back to the situation in New Zealand we know what we have experienced. We had that time with the Auckland Central Remand Prison. My colleagues have already spoken about the fact that from a financial point of view it provided no benefit whatsoever. It also did nothing in terms of the wages or safety of staff. None of that was improved by going down this path. In fact as Mr Barker has said already the bar is set so low in Part 1 of this bill that the prison does not even have to be better or provide a better service in terms of New Zealanders’ safety. This is a mistaken piece of legislation. It is driven by ideology; it is certainly not driven by evidence. It is certainly not driven by evidence globally or evidence within New Zealand. 
I will refer to the Supplementary Order Papers because I think one of the critical elements about why incarceration is a State responsibility comes down to transparency and accountability. In the bill we can see that the Law and Order Committee realised this because it did include a provision for the Public Records Act to apply to the contracts that are entered into under the bill. That material about prisoners will now be treated as if it were produced by the Department of Corrections. The natural corollary to that is to allow Parliament to have some scrutiny via the Ombudsman and the Auditor-General so that we can see what is going on and look at how resources are being used. I simply cannot see why if the Government is prepared to accept that the Public Records Act should apply the Ombudsman and Auditor-General should not be given the same ability to come forward and look into and analyse those things. 
The Supplementary Order Papers from the Hon Rick Barker will do just that. They will allow the Office of the Auditor-General to have complete and unrestricted access to all aspects of any contractor prison as if it were a prison run by the Department of Corrections. The Minister needs to tell us what is wrong with that. What is wrong with Parliament having the ability to have some scrutiny over these things? The same applies with the Ombudsman. Although the Ombudsman may have some indirect ability Parliament needs some reassurance if we are going to go down this mad path of privatisation in prisons that we can look into what is happening in those prisons. Supplementary Order Paper 87 “authorises the Ombudsman to have complete and unrestricted access to any contracted prison prisoner prison records and prison staff to carry out the duties and responsibilities of the Ombudsman’s Office …”. They are two very sensible Supplementary Order Papers that attempt to make some kind of transparency and accountability available to the people of New Zealand. The Minister must tell us why she is not—I presume she is not—supporting those Supplementary Order Papers. Could we get some indication from the Minister? 
Chris Hipkins 
: She obviously thinks they are quite funny. 
GRANT ROBERTSON 
: She does seem to find it quite funny. In fact National members seem to find the whole debate quite funny. I would like to hear her take a call on those Supplementary Order Papers and let us know what she wants to do with them. The third Supplementary Order Paper that Mr Barker has put forward amends section 198 to make sure that no contract for running a prison under this Act will be more than 3 years. This is a very sensible amendment because it will not bind a future Government; this bill will be repealed under a future Labour Government. 
This bill and this Part 1 are fundamentally flawed in principle and in practice and they simply do not stand up to the scrutiny of international evidence. If we really want to enter into this brave new world as Sandra Goudie said to give it a go and give it a whirl I say that it is too important for that. The safety and security of New Zealanders will be compromised. The safety and security of staff will be compromised. It simply is not good enough to say that we are just going to give it a go. It has not worked elsewhere; it will not work here. 
CARMEL SEPULONI (Labour) 
: 
 I am on the Law and Order Committee with a few other members who are in the House tonight. For the whole time the Government has pushed the idea that private prisons are safer better and cheaper. But I know like every other member on that select committee knows that the vast majority of the submissions that came through on the Corrections (Contract Management of Prisons) Amendment Bill were opposed to private prisons. 
One submission that was not opposed—that was in support of private prisons—was from the GEO Group. We all know that that group has a vested interest in making sure that we privatise prisons because it wants to make profits out of our prisoners. John Key is reported as saying that private prisons produce very good results and he was talking with regard to the GEO Group and the private prisons that exist in Australia. The GEO Group is part of the Wackenhut Corporation—the owner of 13 correctional facilities 11 of which are operated by GEO Group. The group has immigration detention centres youth facilities and adult prisons. GEO Group’s value now apparently exceeds $1 billion. 
If it is really as good as that why did it recently settle a case where staff had placed a woman in a cell block with male inmates by whom she was raped and beaten and she later took her own life? If it is really as good as that why were 125 inmates removed from a prison by state authorities because of inadequate staff training and inadequate health care? GEO Group’s facilities have been reported as serving rotten food. They have knowingly made false and misleading statements to state officials they have failed to complete criminal record checks on at least 100 guards and they have violated domestic and international laws on due process and humane treatment. Mr Key says that private prisons have shown good results but I ask members whether they think those are good results. We do not think so on this side of the House. 
Prison officers who worked for the Auckland Central Remand Prison when it was under private management made a submission to our select committee. They said that serious dubious things had gone on with regard to cover-ups the way in which they were paid and working conditions. They pointed out that in order to get bonuses it was important that they made sure that they reported in a way that did not show up anything untoward; otherwise they would not collect the money. Those concerns were raised with the select committee yet the Government is still pushing for us to privatise our prisons. 
The Minister in the chair the Minister of Corrections was earlier talking about the fact that privatisation is not all about cost but unfortunately not long ago the Minister was the one saying that private prisons would be cheaper and it was all about the fact that they would be safer better and cheaper. We already know when we look at the evidence that I just discussed that private prisons are not safer. Cost has been discussed by some of the members on this side of the House and when we compare it with the cost of State prisons we see that private prisons are not cheaper. We know that they are not safer not cheaper and not better. So there is absolutely no reason for this Government to go ahead and privatise our prisons. 
Among the Supplementary Order Papers that have been discussed is Supplementary Order Paper 86 which was put forward by the Hon Rick Barker. It states that the contract for the running of a prison shall last for no more than 3 years. The problem at the moment with this bill is that the length of the contract is unlimited. The Minister will decide the length of the contract. Our concern on this side of the House is that if the management of the prison goes wrong New Zealanders will have to fork out money to pay to get out of that contract. We cannot determine for how long the Minister will decide that the contracts run. For Mr Rick Barker to put forward an amendment that would limit the contracts to 3 years is completely reasonable. At the end of the day whoever is in Government can decide whether private prisons are working and decide whether those contracts are to be extended. There is absolutely no reason why the term of the contract should be at the discretion of the Minister and there is no reason why we cannot legislate for a certain term so that on behalf of New Zealanders we can check on how privatisation is going and can make sure that they do not have to pay out when things go wrong and we desperately need to get out of a contract. 
With regard to the evidence that I discussed earlier it is obvious that things go wrong with private prisons. They have done in other countries; they have done in New Zealand in the past. It is a real issue. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I want to do several things in the next few minutes. First I would like to agree with some of the comments my colleagues have made in respect of their disagreement in principle with the idea of the privatisation of prisons. Then I would like to talk a little about what it might mean in practice and about the evidential base that we might draw upon when making that decision. 
In principle I absolutely disagree with the idea that any private firm should make a profit out of the incarceration of people. I think it is a morally repugnant that somebody should make a profit out of incarcerating a prisoner. It is simply in my view— 
David Garrett 
: Ideology. 
CHRIS HIPKINS 
: It is ideology; it is ideological. I find the idea that someone would make a profit out of somebody else’s suffering—whatever the cause of that suffering—simply wrong. I do not agree with it. But let us look at the evidence. 
I have been sitting and listening to this debate. I am opposed to this bill—and that is my ideological view but I am willing to listen to a good argument based on evidence. I have not seen any evidence from the Government from the ACT Party or from anybody else who is in favour of the private operation of prisons that actually suggests it will be better and that it will work. 
The Minister in the chair Judith Collins used two main justifications for it: that it would be cheaper and that it would have an impact on prisoner rehabilitation. If we measure the effect on prisoner rehabilitation by the rate of recidivism it is worthwhile looking at the very limited amount of peer-reviewed academic research that has been done overseas. 
My colleague David Parker during the first reading of this bill referred to two peer-reviewed studies that were done in the United States. Very few peer-reviewed studies have been done on the private operation of prisons. I will quote from the first one which is called  
The Effectiveness of Juvenile Correctional Facilities: Public versus Private Management 
. The authors are Patrick Bayer from Yale University and David Pozen from Oxford University. Their study concluded: “for-profit management has a statistically significant impact on recidivism …”. 
The unfortunate fact for the Government is that the statistics go the wrong way. The 1-year recidivism rates are 5 to 8 percent higher for those juveniles who were in a privately run prison facility. That is some of the limited international evidence about the effectiveness of private prisons. It suggests that recidivism rates are higher in for-profit private prison facilities. So we can discount what the Minister has said about that on that ground. 
The other study is called the Bales report. Again it was a peer-reviewed study and it was about the experimentation of private prisons in Florida. That study found no empirical justification for the policy argument that private prisons reduce recidivism any more than public prisons do. So we can discount the idea that a private prison will be any better for prisoner rehabilitation. In fact when we look at the motivations behind how a private prison will operate and the motivations for why someone would go into running a private prison we see that there will not be the right incentives for effective prisoner rehabilitation. 
The second argument the Minister Judith Collins put forward was one on cost and it was simply wrong. The limited experience we have in New Zealand shows that in fact private prisons are not cheaper. We can compare public and private management figures in relation to the Auckland Central Remand Prison. The rate for a public prison is $50208 which is $7000 less than the New Zealand experience in the private prison sector when we had a private prison. So we can discount that as well. The New Zealand experience shows that cost simply is not a factor. So the two justifications that the Minister put forward for wanting to push this bill through Parliament have already been discounted. 
I have a couple of technical questions that I hope the Minister will address. I refer her to new section 198 in clause 5 “Management of prisons under contract”. Rick Barker has put forward an amendment limiting any contracts to 3 years and I support that but what this bill does not do is establish any criteria under which a decision may be made as to why a prison may be contracted out to private management. 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I think it is only fair that I answer some of the questions raised by the Opposition members. I am happy to do so. 
In relation to Mr Barker’s Supplementary Order Papers I say that Mr Barker has never once referred those matters to me or to our caucus and I am afraid we will not be supporting them. 
Mr Hipkins has been talking tonight about several issues. I hope I have this right. I think one of the things he has raised is that effectively no one should make a profit out of someone else’s unfortunate circumstances. Is that a reasonable rendition of what the member said? 
Chris Hipkins 
: In the case of prisons. 
Hon JUDITH COLLINS 
: On that basis we would not have private hospitals. We would not have dentists outside of the hospitals. We certainly would not have grocery shops because basically food is all privatised in this country. We certainly would not have insurance and we definitely would not have schools that were private or privately owned. The fact is that the State provides the funding and as long as it is monitored and the chief executives are in charge it is another matter who runs it. I have not yet heard Labour members refer to the fact that under their watch it was quite all right for prisoners who were sent from the court to prison to be transported in privately run prison vans. How does that work with the Opposition’s theory that only the State should be in charge of that area? Why should that be? 
The fact is that Opposition members are ideologically driven as long as it works for them. But unfortunately we have found that sometimes the State is not always the best performer on every single measure. I heard a lot from Miss Sepuloni tonight about the terrible things that have happened in private prisons. I have news for that member: really terrible things have happened in State-run prisons too—quite a few of them when Labour was in Government. In fact some of the things we have had to fix happened when it was in Government. 
One of the good things with a privately run prison from our point of view is that we can put performance measures on it. We can have accountability that means something. When Auckland Central Remand Prison was privately run a clause in its contract said that if there was an escape it would pay a fine of $50000. This was at a time when there was a very high escape rate in New Zealand prisons. There was one escape from Auckland Central Remand Prison and it was fined $50000. One of the great things was that it never happened again. 
Simon Bridges 
: Simple but effective. 
Hon JUDITH COLLINS 
: It is very effective. Miss Sepuloni has also said that there have been cover-ups. Well let us see the evidence of that. She has talked about wholesale privatisation. Well we indicated that we are looking at one-tenth of our prisons being privately run which is hardly wholesale privatisation. 
I heard tonight from the Hon Lianne Dalziel about the Supreme Court of Israel. The member quite truthfully said she had not read the case but someone had told her about it. I am sorry but I will need a bit more evidence than that. I have never been to the State of Israel but I am confident that our record on human rights would stack up pretty favourably against that of the State of Israel—or against most other States frankly. 
When we look at the cost—the Labour Party goes on and on about cost—we see that it is a fact that rehabilitation costs money. Auckland Central Remand Prison was contracted to perform 70000 hours of rehabilitation when no other remand wing in this country at that stage was doing it and yes it did cost. In fact it did not just produce 70000 hours; it produced 120000-odd hours. It over performed and did not get paid extra for that either. 
She talked also about the loyal prison officers. It is nice to hear a member of the Opposition saying something nice about prison officers. When I became the Minister of Corrections I was the first Minister of Corrections to ever turn up to a graduation ceremony for our loyal prison officers. Corrections Ministers under Labour which was in Government for 9 long years never once did so—not once. So it is nice to hear that now Labour likes the prison officers. 
Grant Robertson MP spoke about liberties being taken away by private prisons. Well I have news for him; I know he is not a lawyer. It is actually the courts that remove people’s liberty; the Department of Corrections does not. We just receive them. I think most of the issues have been dealt with. 
METIRIA TUREI (Co-Leader—Green) 
: 
 How funny it is to listen to this Minister Judith Collins talk about iwi involvement in prisons. How terrible it is to listen to her talk about how great that would be. Do we remember that when this Minister was a new MP she went to a powhiri—a Department of Corrections powhiri if I remember correctly—and she had a big “waa” because she had to sit in the second row of the powhiri instead of in the front row. She stormed out of the powhiri and made a huge big row about it all through the country. She walked out in a huff possibly with tears streaming down her face because she had to sit in the second row and not in the front. And here she is now supposedly crowing about how private prisons—international corporations—will be able to make a wonderful profit from the imprisonment of those Maori whose powhiri she might have been part of. She is really pleased that international corporations will make money out of the imprisonment of Maori. Her own behaviour has clearly demonstrated her absolute failure to respect Maori and Maori process yet she stands here and tries to say contract management is a good thing for Maori people. It is a terrible day to hear the Minister talk about that in this context. 
My colleague Nandor Tanczos and I went to visit a number of prisons including the Auckland Central Remand Prison when it was being run by GEO Group—by Wackenhut—and he and I talked with Dom Karauria who was there at the time and with the iwi involved with the management and running of that prison. It was very innovative. The prison was a wonderful building built with public money and designed for that purpose and the management was very engaged with trying to find ways to involve Maori. But that came down to the fact that Dom Karauria was in charge. It had nothing to do with the ownership of the prison. It was about this one guy who had had experience in Australia of working for other prison organisations that did not have respect for indigenous people and he himself had made a commitment to do so. Nandor and I were both very pleased to have worked with him and to have talked with him about his commitment and we celebrated that. But that was the commitment of just one person. It had nothing to do with whether the prison was privately run or publicly run. It was because of the commitment of individuals: the people that Dom Karauria built around him to support Maori. 
It surprises me a great deal that the Maori Party in particular supports the Corrections (Contract Management of Prisons) Amendment Bill and does not recognise that that was the case—that it does not recognise the special skills of Dom Karauria and instead buys into the misleading information and misleading rhetoric about private prisons being essentially good for indigenous people. We know that is not the case. We can look at the experience of the private prisons in Australia and at the significant abuse and damage that is done to indigenous Australians to Aboriginal people in those prisons. 
Carmel Sepuloni 
: Absolutely. 
METIRIA TUREI 
: That is right. We can look at the example of the prisons that GEO/Wackenhut has operated in America and my colleague Carmel Sepuloni has described some of those things. Again a huge proportion of the prison population are black people Mexicans Hispanics and the indigenous people of that country as well. In those countries we can see that there has been an ongoing exploitation of indigenous communities by these companies which make a profit from the systemic racism inherent in their legal systems. That systemic bias that systemic racism exists in this country as well and the Maori Party knows that. The Maori Party knows that that is the case. 
I hope that Tariana Turia is doing all right. She was reported a few months ago in the  
Wanganui Chronicle 
—it should be Whanganui with an “h” I have to say—talking about this issue. She stated: “Our people continue to go to prison and many of them have spent a long time not functioning well in society. They need the opportunity to have their mauri ora and mana restored. No one is going to do that in a public prison.” She stated: “Absolutely we are not in this to make money. I am a firm believer in redemption.” She went on to state: “Our people have been deeply affected by the inequalities of the system and the current system does not address the reasons that people go to prison.” She said the Maori Party support was about not just rehabilitation but also habilitation and Maori could be part of their own solutions to these issues. 
I agree with Tariana Turia about that; Maori can be part of the solutions to imprisonment issues. The fact that more than 50 percent of the prison population is Maori is a disgrace and more needs to be done about that. But there is nothing to prove that privately owned prisons will make any difference to that situation. In fact if we look at the overseas evidence we see there is ample evidence to prove that privately owned prisons will do more damage to indigenous communities. They will do significantly more damage than public prisons do to the Maori population because of the use of that population as a cash cow with which to make money. That is the basis behind the thinking around privately owned prisons. There is money in it. 
The prison staff who came to talk to the Law and Order Committee talked about that. They showed us that in great detail putting themselves at risk by doing so because one or two of these guys had worked in the private prison and they will not get a job there now even though they knew this legislation would be passed. They came and talked to us about the financial incentives for the managers the owners of the private prison to avoid their obligations in order to protect their financial bottom line. They talked about incentives not to find drugs about staff being not disciplined but encouraged to resign in order to avoid the reporting of those problems and about inadequate drug-testing. The only way to describe it is I guess as the company actively hiding information in order to appear to be complying with its contract so it will retain the performance bonus. Those are the kinds of things that the Minister in the chair the Hon Judith Collins was talking about when she said privately run prisons were a good thing. The Minister said those things were good about private prisons because they would have financial incentives to behave better. 
Privately run prisons have financial incentives to hide information. That is one reason why the Green Party will be supporting the amendment to provide for the Auditor-General to have a great deal more oversight over private prisons. There needs to be a means by which the public can investigate the financial incentives the financial issues behind these companies and their operations. If we do not do that there is no means by which that can happen through the contact. The owners and managers of the private prison can hide their financial information by using commercial sensitivity as a barrier. The only way to find out whether they are incentivised to hide information and whether they are actively preventing their staff from doing drug testing from finding drugs and from being involved in all of the issues that those staff brought to us will be by making the Auditor-General able to investigate those matters. That will provide the best possible level of scrutiny over those issues. 
It still remains a mystery to me as to why the Maori Party supports this bill and why the Associate Minister of Corrections Dr Pita Sharples instead of supporting private prisons was not able to negotiate with the National Government for Maori to be able to be involved in the running of public prisons. That could be done just as easily. In fact if private prisons will comprise only 10 percent of the prison management in this country then 90 percent of the Maori prison population will still be in the public sector. If there is no reform of the public sector then how can we possibly expect that anything will be made better or that anything will be done to resolve the issues around the Maori prison population? There has been no effort to deal with the public sector. What the Maori Party has done and what the Minister has allowed to be done is the diversion of attention again from the issues around the Maori prison population. The real need that should be met in the public sector is to be diverted to the private sector as some kind of panacea or some kind of magic bullet solution because that is what it is meant to be in the end. 
Contract management is meant to be a magic bullet solution to the issues around dealing with the Maori prison population. It will not work for the vast majority of those Maori who are in jails. We know that jails increase recidivism and that jails cause enormous costs to whanau to family and to children. None of that will be resolved through the private prisons. None of that will be resolved by the Maori Party’s support for this legislation. Private prisons cost more than those in the public sector. That argument is based on evidence not on the fallacies put out by the National Government. The private sector will profit from the systemic racism in the system. 
JACINDA ARDERN (Labour) 
: 
 Anyone watching this debate from afar might be somewhat baffled I think by some of the arguments that have been put forward—in particular by the Government members. People would certainly be baffled by the fact that the Minister in the chair the Hon Judith Collins somehow thinks that dentistry and grocery stores have some relevance and are a point of comparison for some of the arguments that we have been putting forward. 
Government members have continued to claim that the fact that some part of Labour’s arguments are based on a principle and on a principle that we hold very strongly is somehow repugnant. I find that quite bizarre. I make no apology for the fact that we are applying a principle in this case. I make no apology for it whatsoever. The difference between the way that we have presented our argument and the way that Government members have presented theirs is that we are willing to explore our view. We are willing to talk about where our principle comes from. We have quite clearly stated that we do not believe that the removal of someone’s liberty—a fundamental part of our justice system—should be carried out by a private citizen. We do not believe that the removal of someone’s liberty—an action that is either enacted by a court or carried out on a day-to-day basis by a prison service—should be put into the hands of a private citizen who enacts that action on behalf of shareholders. We do not believe that. We are fundamentally opposed to the State being directly removed from that responsibility. 
I have not yet heard from the Government members a willingness to stand up and directly articulate their ideology on this bill. I have not heard from any Government member who has been willing to stand up and plainly state that he or she believes that private citizens should be able to make profit from our prison service and from this fundamental role of the State. I would be very interested as to whether any of those Government members have the same courage of conviction to stand up and directly state that. 
It is not just principle that we have been talking about. In this case we are backing up our principled argument with evidence. Over and above the question of whether private companies should be operating in this role the evidence demonstrates that in the past when we have allowed that to happen it has not led to an improved service. In fact it was far from it. We need only go back to a very very basic question. It is the same kind of question that we could apply to accident compensation for instance. Why would a private company seek a contract from the State to administer a prison unless profit was involved? We do not hold objection to the notion of profit but we do hold objection when it comes at the cost of a fundamental service. 
Let me break it down. Where will the profit come from? Where is the incentive for private companies to enter into this? We have seen it before. One way to make a profit is to lower staff-to-inmate ratios. That has a natural implication: often prisons end up making lockdowns longer. There is less time out of the cells participating in things like education that will reintegrate a prisoner into society. Auckland Central Remand Prison was one of those that lowered its staff-to-inmate ratio so we have the evidence already. Having fewer rehabilitative services is another way that prisons could enact a few cut-backs; a reduced range of services is another. Again we saw the Auckland Central Remand Prison take part in that. In fact there are reports that the Auckland Central Remand Prison refused to take prisoners after 6.30 p.m. because the majority of its staff were off shift at that point. Cuts in staff pay and conditions are also a possibility. 
In a nutshell profits in this case have often compromised service delivery and this is an area where we cannot afford cut-backs in service delivery. Some of those reports came directly from prison officers who had worked at the Auckland Central Remand Prison both when privately and when publicly managed and they submitted that when it was privately run decisions were made on a day-to-day basis that were intended to protect the reputation of GEO Group and to ensure that performance bonuses provided under the contract were obtained by GEO Group. 
MELISSA LEE (National) 
: 
 I move  
That the question be now put 
. 
Hon RICK BARKER (Labour) 
: 
 I will pick up on a number of points. Firstly I will come back to the point made by David Garrett as to why private profit is not always the best thing to have in situations like this. I will do that by picking up on the points made by Sandra Goudie and the Minister the Hon Judith Collins which basically seem to say we should do this just to have a try at it—we should give it a go and see what happens. It seems to me to be a cavalier approach to making public policy. Give it a go! This a laudable Kiwi attitude. It has done us well in the bush on the sports field and in those sorts of things but I would suggest that it is not a good principle for developing public policy. 
Public policy has for a long time understood the importance of separating the powers. This Parliament does not make decisions about individual court cases for very good reason. There are a whole range of things where we separate the powers. Parliament has separated its power from the executive for very good reasons. Parliament should not try to run things. We separate the powers of the Minister and the chief executive for very good reasons. There are accountability reasons. 
One of the important points about this is that in having the State itself run the prisons there is no opportunity whatsoever for private interests to get into play with the operations of a prison. I will give a very good example and that was in the United States where recently a judge had thousands of decisions overturned because the judge was making decisions about where prisoners were being sent and for how long and they were going to a prison in which he had private interests. His private interests overlapped with his public policy duty. If we have private prisons we put that principle at risk. 
David Garrett 
: How many corrupt judges are there? 
Hon RICK BARKER 
: The member can interject as much as he likes but by ensuring— 
Chris Hipkins 
: And he will. 
Hon RICK BARKER 
: —which my good colleague here Chris Hipkins has said—that the incarceration of prisoners is done by the State there can be no private interests and there can be no profit motive in it. When we have contracted out we have allowed people who have private interests whilst carrying out public duties to have an overlap of interests and these are not always good things. 
Secondly— 
David Garrett 
: Chubb does that doesn’t it? 
Hon RICK BARKER 
: Well let me just deal with Chubb. Chubb runs a few buses and trucks around the place. It does not carry all the prisoners. It was there long before the Labour Government was in place and it is not responsible for the prisoners. Chubb is effectively a specialist taxi service. A prison has control of the prisoners 24 hours per day 7 days per week. It has absolute control of them. It picks a person up and takes him or her to another place where he or she is then placed in the control of the police who have absolute control of them. 
The point I will come back to is about the role of Parliament and the Auditor-General in ensuring that these things are done properly. This is a fundamental weakness. What the Minister is saying to us is that the chief executive and the monitors and auditors whom the chief executive appoints should offer this Parliament sufficient assurance. I say to the Minister that the interests of the chief executive can overlap with the interests of the particular prison. No chief executive will allow a contract to be arranged where one will say after a short period of time that this is a failure this is wrong and it has gone terribly bad because it reflects badly on him or her. The chief executive will be very tolerant of any private contractors because their success will reflect on him or her personally—a contractor’s failure will reflect on the chief executive badly. 
As we heard in evidence before the select committee the private prison that we have tried in New Zealand was massaging its figures. There is no doubt that it was massaging its figures with the— 
David Garrett 
: There were allegations. We did not hear evidence. Get one of the lawyers to explain the difference between allegations and evidence. 
Hon RICK BARKER 
: We heard directly from the people who turned up at a risk to themselves and they told the select committee. I have no reason to disbelieve them. There were a number of them and they said that they were massaging the figures. They massaged the figures because that was in the interests of their profit-driven employer. The interests of the chief executive and the contractor do overlap. The interests overlap in that they do both have a commitment to ensuring that they can show a success on paper. That is why this Parliament should have an independent oversight of that through its auditor our Parliament’s auditor the Office of the Controller and Auditor-General. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I move  
That the question be now put 
. 
CARMEL SEPULONI (Labour) 
: 
 It has come up over and over again but we cannot say it enough: one of the main reasons that Labour members oppose the Corrections (Contract Management of Prisons) Amendment Bill is that we believe that prisons are a core function of the State. 
Hon Member 
: Oh God. 
CARMEL SEPULONI 
: They groan whenever we say that. Do members know why the Government members groan? They groan because they do not understand what we mean when we say that prisons are a core responsibility or core function of the State. The reason they do not understand what we mean is they would quite happily privatise anything. They would quite happily privatise all the functions of the State—education prisons health accident compensation and perhaps even our welfare system. Who knows? They are quite happy to privatise. They do not understand what a function of the State is. That is one of the reasons why Labour members oppose this bill. 
We understand given some of the things that have happened in the last year since this Government came in why the Minister of Corrections and the National Government would want to shift the responsibility for this function. We understand given what has gone on under their watch. Let us look at what happened over the last year that might explain why the Minister and the Government want to shift responsibility for our prisons to hand over the accountability to private managers. Let us look at what happened. Under the Minister of Corrections’ watch over the last year two prisoners broke out of a police van at Palmerston North District Court on 15 January. Three remand prisoners broke out of a prison van in Hamilton on 19 January. Ărai Hema fled from an outside work party at Auckland’s Paremoremo prison on 21 January. 
Sandra Goudie 
: Hello? We’re doing Corrections not the Police. 
CARMEL SEPULONI 
: I say to that member that she should hang on—there is a lot more to go. I might have to take two calls on this one. Storm Hughes fled from a work party outside the Spring Hill Corrections Facility in North Waikato on 11 February. Robert John Wikaere escaped from Te Awamutu’s Waikeria Prison on 17 March. Ollies Siaea walked out of the Manukau District Court after he claimed to be another prisoner on bail on 20 March. Three prisoners were caught on a roof at Mount Crawford prison on 13 September trying to jump over a prison wall. A fourth who had already managed to successfully escape that way was caught by police less than an hour later. William Katipa aged 43 escaped from a medium-security unit at Waikeria Prison after scaling a security fence on 29 September 2009. On 23 October police were seeking help in locating Ernie O’Neal Paul a high-risk offender who was wanted for breach of bail. Christopher Watkins 46 escaped from Tongariro/Rangipo Prison on 22 October. 
These things happen and they are happening more so—the research shows this. All of the submissions that came through the selection process except for the one made by GEO Group supported what Labour members are saying. These things happen more in private prisons but the point of difference is that when prisons are privatised the Government no longer has to be accountable for them. The Government can put the blame entirely on the private company that is managing the prison. We can see why the Minister would like to shift the responsibility. The Government does not want to take responsibility for this. It would rather see the private companies cop the flak so that it is not the Government that is held to account by New Zealanders. That is the issue. 
I will go back to the proposition that private prisons are safer better and cheaper. Everything that has come up tonight from this side of the Chamber and from my Green colleagues demonstrates that they are not safer better and cheaper. As my Green colleague Metiria Turei said earlier in respect of prisons all of a sudden the Minister of Corrections is concerned about iwi. This issue was discussed in the submissions as well. We saw a submission from prison officers who had worked in both State-run prisons and the Auckland Central Remand Prison when it was under private management. They said that cultural factors were not taken into account when that prison was privately run. They brought up the fact that at one point Australian prison officers were brought over to New Zealand to work in the prison. There were issues with regard to how much they were being paid compared with our local prison officers. There were issues with regard to the ability of the Australian prison officers to understand the cultural background of some prisoners. They gave examples in respect of Pacific Island prisoners. 
SIMON BRIDGES (National—Tauranga) 
: 
 I move  
That the question be now put 
. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I will come back to some of the technical provisions of the Corrections (Contract Management of Prisons) Amendment Bill. I have a number of points that I am hoping the Minister in the chair Judith Collins will address. I turn to new section 198 “Management of prisons under contract” set out in clause 5. The point I was beginning to raise when I so unfortunately ran out of time concerned the criteria the Minister will use when determining whether a prison should be put out to private contract and what process there would be around public consultation in doing so. 
The Minister mentioned in her speech that she envisaged that 10 percent of current prisons if I understood her correctly would be put out to contract management. I think that a number of New Zealanders who live in areas where there are existing prisons will be interested to know how the Minister will determine which prisons will be put out to contract and which ones will not be. The bill is completely silent on that point. The only thing that new section 198 does is allow the chief executive of the Department of Corrections to put any prison out to contract management with the Minister’s prior written consent. It does not give any criteria or establish any grounds upon which the Minister will give that consent. I think probably the Minister in the chair will be the Minister who would make those determinations so I will be very interested to hear exactly how she will do that. 
I represent the Rimutaka electorate which shares its name with the country’s largest prison Rimutaka Prison. The vast majority of constituents—78 percent I think—who completed the constituency survey that I put out were opposed to having a contract manager for Rimutaka Prison. Interestingly enough though there was some support amongst the local population for expanding Rimutaka Prison which surprised me. It is not that Rimutaka constituents are anti-prison—we appreciate that we need a prison—it is that the vast majority of residents are opposed to the idea that it should be run by a contractor. 
Hon Judith Collins 
: Not going to. 
CHRIS HIPKINS 
: The Minister is not going to do that. I wonder whether for the sake of the residents of my electorate the Minister may stand up to take a brief call and put that on the record of the House. The Minister has at least indicated to me before all these witnesses that she is not going to put out Rimutaka Prison to private contract. I am very heartened by that and I thank her. But I imagine that every other area in the country that has a prison will want to know whether their prison could be put out to private contract. New section 198 is very silent on that point. I am pleased that the Minister has obviously thought about whether Rimutaka Prison would be put out to private contract but I would quite like to hear about the other prisons in the country. 
I turn to new section 199(1)(c)(ii) set out in clause 5. It talks about “sufficient suitable staff members to enable the contractor to carry out the contractor’s statutory and contractual obligations in relation to the prison;”. Obviously the Minister will be involved in determining what goes into these contracts when she is dealing with the chief executive who will have the primary responsibility. One of the questions that I have is whether she would envisage for example minimum staffing levels being in a contract. If hypothetically Rimutaka Prison were to be contracted out—and I accept the Minister’s word that she will not do that—the people in my electorate would want to know that any private contractor of Rimutaka Prison had some specified minimum staffing levels that it had to meet. Obviously the safety of the people who work in the prison and the safety of the people in the community around the prison is very much dependent on the number of staff who work in the prison. I would like to know a little more from the Minister as to how she envisages the requirement under the provisions of that new section being put into practice. 
I turn to new section 199(3) set out in clause 5 which is basically a catch-all provision for any other provisions that the chief executive and the contractor see fit. The bill provides a fairly comprehensive range of criteria that any contractor will have to cover. I wonder whether this section is necessary and if necessary what types of clauses and provisions the Minister envisages being captured by it. 
The final point I raise concerns new section 199B set out in clause 5 which limits the liability of the Crown in relation to the contractor. In particular this section provides that the Crown is entitled to be indemnified by the contractor. 
METIRIA TUREI (Co-Leader—Green) 
: 
 I know that I have Labour Party colleagues who have not yet had the opportunity to make a contribution to the debate on the Corrections (Contract Management of Prisons) Amendment Bill so I appreciate the opportunity to do so. 
I refer to a comment that the Minister in the chair Judith Collins made. She compared a prison to a grocery store or the local dairy down the road. I do not know what a Minister of Corrections—a Minister who is responsible for one of the most serious parts of the Public Service and responsible for the policy that deals with some of the most serious issues of safety and the rehabilitation of those who are involved in criminal offending—could possibly have in her mind such that she could compare a prison to a grocery store. I guess that is just what we have to live with with a National Government that puts a person who would think like that in a position of such responsibility. There has been some discussion—[ 
Interruption 
] The Minister herself said it. If the public are to have any sense of security about who is running the policy behind one of the most important parts of the Public Service and the machinery of Government it is important that they know. If the Minister is prepared to stand up in this Chamber and compare prisons to grocery stores be it on her own head if other members in this Chamber then make it obvious— 
Carmel Sepuloni 
: Talking about apples and apples and apples and oranges. 
METIRIA TUREI 
: Yes she was talking about apples and apples and apples and oranges. It is her own fault if other MPs make sure that that is highlighted for the information of the public. It is after all their community. It is after all their machinery of the State that is being messed around with by this Government. 
There has been a lot of discussion about the economics of private prisons. We know for a fact that private prisons are more expensive in this country. We know from research overseas that there has been a failure of private prisons either to be cheaper or to both return quality services and be cheaper. The United States Department of Justice report that I have referred to in other contexts  
Emerging Issues on Privatized Prisons 
 clearly showed that the privatisation models simply mimicked the public sector in practically every way essentially saying that there was no innovation at all in the private sector. All of the new innovation and all of the new ideas were coming out of the public sector and they were simply mimicked by the private provision. 
The report also said that promises that were made by private companies in the US of 20 percent savings did not happen. Those savings were not provided despite all of the promises. Although there were some modest savings of less than 20 percent they were made by reducing staff conditions and other labour-related costs. The Minister said earlier that one of her priorities was keeping staff safe but we know that the policy of the Minister and the Government includes double-bunking for example. She is now engaging with private prisons where staff will find it more difficult to work in an environment where their conditions and their pay are the priority. They will not be the priority for the private company; the bottom line will be the priority for the private company. The way the company gets access to a bigger bottom line to more profit will be hidden from the public. One of the things that will be hidden from the public is the staffing conditions and wages. 
We can see that that is the case not only in the evidence from the United States Department of Justice but also in reports from Australia. The “Privatisation and New South Wales Prisons: Value for Money and Neo-liberal Regulation” report showed that privatisation in New South Wales did not result in value for money or a significant reduction in cost. So even closer to home just in Australia we know that the economic arguments do not pan out. 
David Garrett was yelling out earlier about how staff of the GEO Group - run Auckland Central Remand Prison brought to the select committee views and information that there was hiding of their contractual requirements in order to avoid getting fines and penalties for failing to meet those requirements. He said there was no evidence. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Lindsay Tisch) 
: The question is that the question be now put. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. I was out in the lobby when I heard the closure motion being moved by the Government. It is standard practice for the Government to begin to move closure motions but the House is in urgency on this matter. We have completed Part 1 in Committee faster than we would have done under ordinary time for a bill where the main policy decisions are in Part 1. Under urgency normally there is a longer period for the Committee to consider that part of a bill. This is faster than normal. 
The CHAIRPERSON (Lindsay Tisch) 
: I certainly thank the member for his comments and I have taken them into account. We have gone for an hour and 43 minutes on this. I have a list of who has spoken. There has been a lot of repetition; there has not been any new material that has come out in the last 40 minutes. I decided to accept the closure and I have put the motion. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. I realise that you have to take into account a number of factors. 
The CHAIRPERSON (Lindsay Tisch) 
: I have ruled. 
Hon DARREN HUGHES 
: There are members who have been calling who have not had the chance to contribute to the debate. 
The CHAIRPERSON (Lindsay Tisch) 
: I understand but I have ruled. We have Part 2 coming up and then we have the other—[ 
Interruption 
] I have ruled! We have Part 2 we have the commencement and the other debates are still to continue. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Lindsay Tisch) 
: I hope you are not going to litigate the decision I have made. 
Hon DARREN HUGHES 
: I am reluctant to do it but we are in urgency. I think you have truncated this bill; all of the policy decisions are in Part 1. I move  
That the Speaker be recalled. 
Motion agreed to. 
House resumed. 
Speaker Recalled 
The CHAIRPERSON (Lindsay Tisch) 
: The Speaker has been recalled because Opposition members and the senior Labour Whip the Hon Darren Hughes believe they had other members who wished to speak and that I did not give adequate time for Opposition members to be part of the debate. My reasoning for accepting the closure motion was that this debate had been going for an hour and 43 minutes. Twelve Labour members three Green members and two Government members had spoken and the Minister had spoken three times. There was a lot of repetition; no new material was being debated. It was my view that the debate had run its course. I accepted the closure motion. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 Mr Speaker you have been recalled on the motion of the Opposition which is not something that we have at all made a practice of. The reason is that in the normal course of parliamentary business there is an unspoken tariff for how long a Committee stage should take and how long the debate on parts should take. The formula is set down in both  
Speakers’ Rulings 
 and the Standing Orders. There is also an understanding between the Government and the Opposition about how long the debate on different parts should take. In urgency it has always been accepted that a longer period will be given for the fact that normally Parliament would be moving through on a much slower process. Urgency brings that into a much tighter focus. A longer period of time is normally allowed for that. 
What makes it so critical on this particular bill is that the bulk of the bill sits in Part 1. The bill makes enormous changes to an important part of the State’s responsibility putting aside the different political differences. Everyone agrees that this is important legislation. We believed that there were members on this side who had not been given a chance to make a contribution. The presiding officer is under no obligation to call every single member but there were members who had been called ahead of those who had not yet made a contribution. 
The Opposition has put up amendments to this part—not a ridiculous number in order to slow things but a serious number for a bill on which there are sharp differences across the House. Government members began taking the closure motion quite early and it is well within their rights to use their call in that respect. But we would assert that the Chairman accepted the closure motion far too early given the importance of the bill the fact that the House is in urgency the fact that members of the Opposition had not spoken and the fact that we have put up amendments that we wish to speak to. 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I have been watching proceedings this evening from my office in the Beehive. I think the difficulty we have here is that the presiding officer has made a determination about the value of the debate continuing. I think it would be very unfortunate if that were to be in any way discussed or should I say overturned as a decision. There may be a way through this matter though because I do appreciate that members have pretty strong views on this issue. It is probably one of the strongest ideological divides that we have had in the House almost all year. I think it is important that all views are canvassed. 
I suggest Mr Speaker that you make your decision based on the pleadings that are in front of you. I suggest that if the whips were to confer we may well be able to make the debate on the next two parts quite wide ranging with the questions taken at the end of that. That would facilitate people being able to express their views without impugning the integrity of the officer in the Chair who has made in his opinion a proper decision that the Committee should accept with regard to the debate so far. If the Committee grants leave for the debate to be wide ranging then that is another matter. I do not know what the shadow Leader of the House thinks but we may confer and be able to come to some arrangement around that. 
The ASSISTANT SPEAKER (Eric Roy) 
: I thank members for their contribution. Let me address these matters in no particular order of importance starting with the last point. Of course the Speaker cannot make an assumption based on an interaction between whips or anything else but I think the House is appreciative of the comments made by the Leader of the House the Hon Gerry Brownlee. 
With regard to the expectation about how much of an urgency motion will be devoted to a debate that is the sole prerogative of the presiding officer. Irrespective of the stage a bill is at it has always been tradition that members who would like to continue to debate have to by their actions persuade the presiding officer that the debate will be relevant not repetitious and a whole range of other things. It is solely the presiding officer who determines whether to accept a closure motion at a particular time. Ultimately the test is when the House has to vote on that motion. There have been times when closure motions have been defeated. When the House has seven parties as it does now that is more likely to occur. 
I will acquaint the House with a couple of Speakers’ rulings that I think are quite pertinent on this occasion. Speakers’ ruling 77/1 states: “The chairperson is judge of all matters arising in committee and the Speaker will not interfere …”. The ruling goes on with some points about that. There is particular reference to closure in Speakers’ rulings 65/3 and 65/4. Speakers’ ruling 65/3 states: “The [chairperson] is the sole judge as to whether or not he ought to sanction the putting of the closure motion and it must be left entirely in his hands. The [chairperson] who has been presiding and has listened to the debate in committee must be the best judge whether the closure ought to be put.” There is a bit of a rider: “I can only express the hope that it will not be applied too harshly.” The Leader of the House has given some indication that there is some flexibility to address the desire of the House going forward. In that case I report to the House that I will not interfere with any decision made by the Chairperson in determining whether the closure motion should be put. 
In Committee 
Debate resumed. 
Part 1 Amendments to allow contract management of prisons ( 
continued 
)  
A party vote was called for on the question  
That the question be now put. 
Ayes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Motion agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 86 in the name of the Hon Rick Barker to clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to.  
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 87 in the name of the Hon Rick Barker to clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 88 in the name of the Hon Rick Barker to clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Part 1 agreed to. 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I seek leave for Part 2 and clauses 1 2 and 3 to be taken as one debate with all the arrangements that previously existed for speaking times; for the debate from this point to be a wide-ranging debate across the full scope of the bill; and for two questions to be posed upon closure of the debate so that we vote on the provisions consecutively. In the meantime let us debate freely the matters covered in this bill. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for that purpose. Is there any objection? There is no objection. I remind members what this means. We will debate Part 2 which comprises clauses 7 and 8 and the schedule and clauses 1 2 and 3. This will be a wide-ranging debate. As agreed earlier today members may take two consecutive calls of 5 minutes each in order to make a 10-minute call—that is what we have agreed to. Are we all comfortable with that? Very good. 
Part 2 schedule and clauses 1 to 3 
MOANA MACKEY (Labour) 
: 
 I thank the Chair and the Leader of the House for allowing us to continue this very important debate. I am very pleased to take a call. I was not able to take a call in the debate on Part 1 but I am very happy to be able to do so now because I have a number of concerns and questions for the Minister in the chair Judith Collins that I hope she will take the time to address. 
I endorse the comments made by my colleagues thus far— 
Simon Bridges 
: She knows about everything. 
MOANA MACKEY 
: I say to Mr Bridges that I just care about everything. 
Simon Bridges 
: That’s a beautiful thing. 
MOANA MACKEY 
: Well that is what the Labour Party is about; we think about people other than ourselves. That is where I am going with this. I want to comment on one of the things Sandra Goudie said when she got up. She went on about how important competition is in innovation in the prison sector and how important innovation is within our prison system for getting great new ideas. Evidence from around the world has shown that although private companies are very very keen on showing how great they are when they are trying to get a contract there is no competition when it comes to follow-on contracts. In fact the bill as far as I am aware does not even stipulate a length of contract time. So on the one hand we have a situation that my colleagues have outlined where a private prison management company could get a contract for 50 years then it all goes pear-shaped the Government needs to get out of the contract and it will have to pay out for a very very long contract. 
Carmel Sepuloni 
: New Zealanders. 
MOANA MACKEY 
: That is right; it is taxpayers who will pay for that. 
The flip side of that argument is that when there are short-term contracts the contracts are not given to other companies. There is no competition overseas when it comes to follow-on contracts. There are arguments about how great it is that sustained competition throughout the sector will create these wondrous results but that does not actually happen. It only occurs at the point when companies are trying to grab contracts and then it all falls by the wayside and follow-on contracts often do not follow. That is what evidence from overseas has shown and I would like to know what protections have been put in this legislation to make sure that the claimed benefits of this law will eventuate. 
There are also concerns that the quality of these services may be reduced in an effort to maximise profits. I know that National members have rubbished this argument but it is an incredibly important point. I point out that private companies are fundamentally responsible to their shareholders. More than that they would be acting against their fiduciary duties if they engaged in projects that they knew would disadvantage their shareholders. To me that seems very much to run against the public interest in prisons being run properly. I would like the Minister’s comments on that as well. If these private companies are required to maximise profits for their shareholders how does that sit well with the public need for safety and the levels that the public may be expecting. 
I also know that the ACT member David Garret rubbished Labour members for saying that private prisons are bad by saying we are just ideologically opposed. I am and I am quite open about that. I think that it should be the State that incarcerates people not private companies. I think it is particularly repugnant to be making money off imprisoning people and the evidence backs that up as well. I am one of those people who think we should have an evidence-based approach to these things and in the area of law and order under this Government we absolutely have the opposite. I believe the evidence does not back that up. I want to say to the ACT member in particular that even if he does not believe in that moral argument—and of course ACT does not—how does he feel about a situation where the privatising of a prison may jeopardise public safety if there is a major emergency a riot a breakout or a strike? 
Hon Gerry Brownlee 
: Come on put the notes down. Say something you think yourself! 
MOANA MACKEY 
: I say to Mr Brownlee that I want to get it right because he is here and I really respect him and want to impress him. Government-run institutions are able to more effectively coordinate safety measures and emergency procedures than private companies. This is an important point and I would like the Minister in the chair Judith Collins to explain what she is doing to ensure that the private companies will have the same contact and the same ability to respond to an emergency as the State system because that has been a concern overseas. 
I notice that clause 199H of the bill “Control of contract prison in emergency” raises another issue: where there are concerns about public safety or other matters or emergencies the chief executive of the Department of Corrections can step in and take over. That raises the question that when things are going great the private prison gets to keep the profit but when things go pear-shaped the State has to step in pay the money and clean up the mess. How is that a good deal for the taxpayers of New Zealand? We saw this in the United Kingdom where a private prison company got into significant trouble within months of opening. It made all these claims about all the wonderful things it could do and all the targets it could meet. Within months the company had practically fallen over and it was the UK taxpayer and the UK prison system that had to step in to clean up the mess and pay for it. 
We have another case here of privatising the profits and socialising the losses. I would really appreciate the Minister’s comments on that as well because it is an important point. There is also the issue which members have rubbished but it has happened in the United States that it creates opportunities for corruption such as bribes kickbacks and political promises. We have seen political parties get a lot of money from these private prison organisations. They come up with “tough on law and order” policies because the more people there are in prison the more money those organisations get. 
If we look at Pennsylvania in the United States we see an absolutely terrible case that happened in 2007. Judges were being paid to put children into correctional facilities because the correctional facilities were privately run and the more children they had the more money they got. One kid threw a sandal at her mother I think and ended up being put into a correctional facility because the judge was getting a kickback. I ask the Minister what there is in this legislation to make sure— 
Hon Dr Jonathan Coleman 
: Where was this? 
MOANA MACKEY 
: —it was in the United States in Pennsylvania in 2007—it does not happen here. 
Before I finish I want to read a submission. We have heard a lot about New South Wales and a lot about Australia and I thought this submission was particularly good. Do members know who the submission is from? It is from the Police Association of New South Wales and this is what it had to say this year in its submission on the privatisation of prisons: “Private companies fundamentally are responsible to their shareholders to generate a profit on funds invested. Indeed company directors would be acting contrary to their fiduciary duties if they were engaged in projects they knew would be likely to not be profitable. It cannot be said that the interests of the shareholders and the public interest may always coincide—indeed all too often we know that this is not the case. The current world economic crisis is as a direct result of the clash of interests of private organizations and the general public.” 
That raises a number of questions that I would also like to ask the Minister. What will suffer as a result of the need to make a profit? How can there be a guarantee that corners will not be cut to meet the economic demands of making a profit for shareholders? If contracted services are remunerated on the basis of the size of the prison population what incentives would there be for the provider to rehabilitate offenders? Will the financial imperatives of filling prisons lead to overcrowding? How does the provider become accountable beyond the terms of the contracts and contract law? Private contractors are insulated from public scrutiny; they are not subject to the same controls and oversights that apply to the Government and public sector employees. 
Is there a real possibility that the safety of both inmates and the public will be jeopardised through inadequate staffing training and resources in order to increase profit margins? Will there be a higher staff turnover with private contractors meaning less experienced staff with less preparedness to respond to riots fires and escapes and what is the increased risk of opportunities for corruption within private companies that are not subjected to the very rigorous oversight and training of government prison officials? And what is the risk and potential impact if the private company goes bankrupt? Those were the questions put by the Police Association of New South Wales and I think they are questions that deserve to be answered before any member of this Chamber supports this legislation. 
David Garrett and the Minister in the chair said we should just give it a go and see how it goes. We are not talking about changing one’s hair colour or about getting a new haircut. We are talking about a significant shift in the way we run corrections facilities in this country. We are talking about a system that overseas has seen increased violence and prison deaths and lower reporting. If something is not reported the private company does not get pinged with the penalties and we have seen lower reporting in the private sector. Ten out of the 11 worst prisons in the UK were private prisons. I visited Her Majesty’s Inspectorate of Prisons for England and Wales when I was over there and I was told that the private prisons were diabolically bad and they cut corners at any cost. When MPs go through them the red carpet is rolled out and they are shown everything they want to see. It is like when we get that Microsoft Windows demonstration software that is nothing like the real thing. When we finally purchase the real thing it is very very different. We were told “Don’t go there.” 
JONATHAN YOUNG (National—New Plymouth) 
: 
 The private management of prisons is a forward step to improve our prisons to encourage innovation in ways in which we can ensure a better result for all New Zealanders which is why we are in Government and others are not. Private prison management provides an opportunity for innovation and service delivery which will support better outcomes for Maori and Pasifika and the public. Provisions will also be included in contracts for each prison to respond to the unique needs of people. Other significant nations have taken this step some time ago and I mention a comment made by Mr Mel Smith a former Ombudsman: “I can say categorically that the ACRP was very well managed and certainly lost nothing in comparison with overseas examples in Australia the USA and Great Britain.” 
I want to speak about what has been presented to us by members of the Opposition regarding the core function of State. They have said it is their philosophy that the incarceration of prisoners is a core responsibility of the State and should not be contracted out. That view is obviously not supported in Victoria New South Wales Queensland the United Kingdom and the USA. Those states and nations are very similar to us here in New Zealand. One could equally say that health and education services should be the core function of State because these are human rights yet we see and accept private providers. What about one of the most important of all needs: feeding the population. Should that not be a core function of State? Well Labour Governments have told us what we can eat and what we cannot eat; that is about as close as we allowed them to get. What about housing New Zealanders? Should that not be a core function of State? Where does it stop? That is the question. The truth of the matter is that in the modern world all these essential provisions come as a mix of private and public provisions. What makes a prisoner any more important than a law-abiding citizen to attract such support from the Labour Party? Is it the fact that prisoners have lost their freedom? What about the loss of freedom felt by the victims of their crime? We need to understand that a private manager has only delegated authority to act on behalf of the State. To say that a private manager is incarcerating a prisoner is a mistruth. The fact is that Parliament in its laws and the courts in the enactment of those laws incarcerate a crime-breaker. What the Minister of Corrections has said in presenting this legislation is that in order to deliver the best corrections system for New Zealand this Government believes that we should not limit our choices. By changing the legislation to allow private management of prisons we are giving ourselves a choice. 
This legislation is not about the Government offering profits to private enterprise. This legislation is about seeking best outcomes for the New Zealand taxpayer which may or may not be about costs. Let us talk about quality. A reported comment from Te Warena Taua who chaired a group that represented six iwi in a formal relationship discussion with Australasian Correctional Management said that under a contract with a private provider “we have seen more progress and innovation in a prison than we have seen in decades from the public prison service. The private management of prisons does lead to innovation in management. This is a good example of that particular case. 
Let me just read out a quote from a Labour MP from Great Britain Gerry Sutcliffe. He said: “The first private prison opened in 1992 and there are now 11 such prisons operating in England and Wales holding about 10 per cent of the prison population.” Listen to what he says: “The companies that provide those services have developed a strong track record of delivery and are driving forward the decency agenda as well as introducing innovation and increasing value for money in public sector prisons.” Members opposite do not want to hear that. “Martin Narey the former director general of the Prison Service has said that if it had not been for the private sector the decency agenda would not have moved at the pace that it has.” To say that private management of prison is all about profits is obviously and totally incorrect. Labour says that profit motives will compromise service quality. The evidence is to the contrary. In fact Gerry Sutcliffe from the UK went on to say that there were “barriers to the best provider being selected.” This legislation will remove the barriers so that merit can be the determining factor instead of monopoly. Prison staff also have the comfort that this bill ensures that their superannuation entitlements will be protected if they move to work for a private manager of a prison. 
I think that Labour members have somehow become lost in the fog of their ideology. I respect that they have that view but I just disagree with it. They have lost perspective on what really counts. It is not about who provides; it is about what is provided and also for what cost. It is not about the cheapest; it is about the best outcomes for New Zealanders. 
Carmel Sepuloni 
: It’s about transparency and being accountable. That should be the test. 
JONATHAN YOUNG 
: Let me tell members opposite what their leader Phil Goff said. He agrees with us. He said: “The point I am making is that it does not matter a damn whether one has private or public prisons in that sense. What really matters is the way in which those prisons are operated.” That sounds sensible. I do not think that members opposite have an open mind to consider the opportunities that this bill will present. The concerns that they have are answered in the proposed legislation. The requirements of prison management contracts are covered in new section 199 in clause 5. Subclause (1) states: “Every prison management contract must provide for—(a) objectives and performance standards for the contractor in relation to the management of the prison that are no lower than the standards applicable to prisons managed by the department; and (b) objectives and performance standards for the contractor in relation to the management and care of prisoners in the prison that are no lower than the standards applicable to prisoners in prisons managed by the department;”. I believe that this is solid legislation. I believe that this legislation opens up opportunities for innovation to come through. We know that improvement always comes when contestability is able to be entered into and we also understand that a monopoly closes that down. 
There is accountability in this legislation. The commentary notes the amendment to clause 5 where it replaces section 199E(1): “This amendment would require the chief executive to appoint at least one monitor to each privately-managed prison and allow the appointment of one or more additional monitors to assist that monitor.” As the Minister has said those monitors are moved around from prison to prison so they do not become captured. I remember that when I was a teacher many many years ago these monitors whom we would call “inspectors” would come to look at what we were doing and there certainly was a very strong degree of independence in their work. Labour members are concerned about what they state is a lack of accountability and transparency. They state that the Auditor-General’s office and the Office of the Ombudsmen will not be able to hold a private manager to account. Let me just explain once again that these people are “acting” as delegated authority under the chief executive that they have contracts with provisions that there are very strict criteria and that there are ample opportunities for wide scope for accountability in this bill. The Auditor-General’s office stated to the Law and Order Committee that additional power to access information was not necessary for the office to obtain information from a privately managed prison as it already had the power to do so. We do not hear that point from the Opposition—that the Auditor-General’s office is already satisfied that it has ample provision to be able to get the information that it requires to hold privately managed prisons to account. Other significant nations have taken this step some time ago. It is time for us as well. Thank you. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am very grateful to the Leader of the House and our chief whip for negotiating the opportunity to have a debate such as this. Everyone has said it and it is true: there is a huge philosophical divide between the two sides of the House on this matter. The National Government seems to have it fixed in its mind that if it is public it is bad; if it is private it is good. The Labour Party on the other hand takes a different view. We say that if it is public it is good; and if it is private it is good in its place. 
Sandra Goudie 
: You don’t like privatisation. 
Hon LIANNE DALZIEL 
: I actually do not think that anyone on the other side heard what I said. I said that on this side of the House we tend to believe that when it is public it is good; when it is private it is good in its place. We are not debating the efficiency of business generally. That is not what this debate is about from the philosophical point of view. Those who claim that members on this side of the House do not understand business are not picking up on the essential point that we are making. We are challenging the very use of private business to undertake the nature of this work. That is what we are challenging and that is a fundamental difference. 
But I will get on to the efficiency of this business anyway because it does not stack up even on that ground. In terms of dealing with the philosophical divide we have here we have heard members opposite absolutely mock the concept of the State. We have heard the ACT Party come to the fore as usual and say that the State really has no core function at all and that anything the State does can be contracted out. Government members simply do not accept that there are certain core functions that should never be contracted out from the State. They are absolutely clear-cut about their view. We had a lecture from David Garrett. It was interesting to be lectured by someone who touted the fact that he completed his law degree some time after I did at Canterbury University. He mocked the landmark ruling of the Supreme Court of Israel by pointing out that it does not appear in our hierarchy of courts. Well hello! He obviously was at law school because to know that takes exceptional intellect. 
The point I was trying to make—and I think the one he deliberately ignored—was the potential impact of that decision across jurisprudence internationally. I think that it has an incredible capacity for making a significant change. In fact the article I was quoting from said that the ruling would be studied not only in Israel but that it will also doubtless generate a conceptual revolution worldwide. I think that is absolutely true. I think it is unfortunate that we have not had any debate about this in the House in the context of what we are talking about here. 
The petition that started this particular case argued two things. It argued that transferring prison powers to private hands would violate the prisoners’ fundamental human rights to liberty and dignity and second that a private organisation would always aim to maximise profit—and yes that is what private organisations are designed to do—and would therefore seek to cut costs by for instance skimping on prison facilities and paying its guards poorly thus further undermining the prisoners’ rights. I think these are serious issues that the court was required to address. 
When considering this particular matter the president of the court stated that normally the court would not intervene in economic policies decided upon by Cabinet and the Parliament in Israel in that particular case and that is certainly the case here. But in this case the president wrote that the legislation harms basic constitutional rights thus the amendment’s economic aspect was not a decisive factor that the court must weigh in exercising its power of judicial review. I think that the fundamental issue that the court has raised in this particular case is that by transferring the power to incarcerate to a private corporation whose purpose is making money the act of depriving a person of his or her liberty loses much of its legitimacy. I think that will be the basis of the many cases that I believe will be taken around the world. It is not just in New Zealand that this is an ongoing debate. This is being challenged all around the world and indeed at the heart of prison privatisation the United States of America we are seeing these things being challenged all the time. 
We have listened to National Party MPs talking about feeding people and housing people. We have heard all sorts of different things as being fundamental so therefore why does the State not do all of those? Again the Government completely misses the point which is that some things are the core functions of the State and they cannot be contracted out. Maybe National members think a private police force would be a good idea Actually the Minister in the chair Judith Collins is also the Minister of Police. I ask the Minister whether that is a line across which we would go. Is that thin blue line going to get a little thinner as the price of those who provide protection for our communities is dropped by the private sector? This is never mentioned. 
The courts could be privatised completely. The military—the defence forces—could all be completely privatised and of course we could get that for much better value. A few mercenaries could take up that role in defence of the realm. That I think is what we are not having a debate about. We are ignoring the fact that there are some fundamental issues in respect of human rights where we cannot ignore the obligation of the State and the fact that these things should not be contracted out. 
Jonathan Young brought to the House the example of the United Kingdom. He quoted the number of private prisons that had been developed in the UK. I do not think he mentioned the fact that 10 of the 11 private prisons in the UK rank in the bottom quarter of all the prisons in the UK. So the UK example is not a very smart argument to be raising because in fact private prisons do exponentially worse than most others. In fact 75 percent of the prisons do better. The members opposite love league tables. I tell members that that is a league table that the private sector does not look very good on at all. 
The Minister also failed to respond to the point that I have raised in this House more than once now and that is the cost differential in the provision of per prisoner management of the Auckland Central Remand Prison which was under private management from 1 July 2004 to 30 June 2005. We had the comparative cost which was $35700 per prisoner when it was under private management. The comparable figure for remand prisoners in public prisons at that time was $32000 per prison. The comparable price with the remand prison when it came back under public management—a year later so the price should have gone up—was lower than the private management cost of $33900 per prisoner. 
Why is nobody stating the obvious? Is the emperor genuinely wearing some clothes here? It seems to me that what has been overlooked is that the one actual example that we have of private sector prison management in New Zealand shows that it is more costly to run prisons within the private sector than it is within the public sector. All the international evidence points to detriment to those who are being imprisoned and detriment for the prison officers who are usually paid less and are at greater risk of attacks and other things happening to them. Of course there is the whole question of the cost to the taxpayer. In actual fact a lot of that is hidden additional costs. It blatantly cost more for the private sector to run the Auckland Central Remand Prison in the one instance of private management that we had. That is why as a Government coming in we had no problems overturning that contract and saying that we were not going back there. It simply was not even cost-effective. On every level this fails. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise in this debate to take a short call to talk about some of these things. It is interesting that we actually agree on both sides of the Chamber that there is a huge divide in our ideological differences—the things we believe in. That is a given and we agree and that is fantastic. But I would like to talk about perspective. The members opposite lack perspective. It was very very interesting to listen to some of the members opposite talk about numbers. Do they not even understand the numbers when they quote numbers from the history of the Auckland Central Remand Prison? It was in fact the former Labour Government that came into power and decided to get rid of it because it did not agree with it. There was an ideological difference. But the prison worked better. It had better outcomes. The prisoners had better outcomes. They were getting a better rehabilitation process yet the previous Labour Government got rid of it because it simply did not agree with the idea. 
Let me just answer the Hon Lianne Dalziel who has just resumed her seat. What she said about privatising different things—the police the military—was very interesting. I think the only person in this House who has ever agreed or talked about privatising the military sits on the other side of the Chamber and belongs to the Labour Party. His name is David Shearer. Goodness me! 
I will bring up some of the things that some members have talked about. Talk about propaganda! Apples versus apples apples versus oranges! There have been no other remand centres that they could compare the Auckland Central Remand Prison with but they keep continuing to bring up the costs. They keep continuing to compare the numbers. Do they not understand even basic numbers—maths? I am so glad the Hon Anne Tolley is introducing maths and numeracy properly in our schools. Perhaps Labour members should all go back to school. 
I will talk about what Mr Barker said earlier during the debate. Mr Barker said that the Minister of Corrections and the Department of Corrections have vested interests and hence could massage the figures. But I say that perhaps that is what happened when Labour was in Government. Perhaps that is the reason he is suggesting it. Massaging the numbers—my goodness! There are no numbers with which to compare Auckland Remand—I cannot even speak now; I am so excited—Auckland Central Remand Prison. 
Carmel Sepuloni came up with all those numbers of people who are escaping from prison—so many of them—yet she opposes this bill. That is unbelievable. She cannot come to grips with the fact that perhaps we have a really really—as Mr Barker would say—woeful performance by the Department of Corrections under the previous Labour Government. Let me say that escape numbers have halved since this Government the National Government has taken over. Yet Labour members are opposed to the idea that perhaps there would be a better choice and a better option for the public and for safety and better outcomes for prisoners’ rehabilitation. I cannot understand why Labour members would oppose that. 
Somebody else over on the other side talked about transparency. When they try to say that the Auditor-General and the chief executive cannot control a privately managed prison do they actually know what they are saying? That is just utterly ridiculous. The chief executive of the Department of Corrections this morning in the Law and Order Committee said that he is the boss of the Department of Corrections and that yes he will be able to monitor the private management of a prison—as I said private management. We are not lumping up all the prisons and selling them. It is not the privatisation of all prisons. We are actually saying that best international practice could be adopted to improve the situation in this country where the Department of Corrections has failed in its duties—which is woeful as Mr Barker has said. You know perhaps we might have a better benchmark against what has happened in the last 9 years of the previous Labour Government. It is improving since the current Minister of Corrections took over. 
There is also something else that somebody on the other side of the Chamber said. Lianne Dalziel also said that business in the private sector could be bad but in the public sector it is good. We all work in the public sector. We are all members of Parliament. We are here to do good for the public. We have never actually said that public is bad. 
Hon RICK BARKER (Labour) 
: 
 I come back to the contribution made by Melissa Lee and I will talk about numbers. Let us come back to the numbers that the Hon Lianne Dalziel put forward. I just repeat them for Ms Lee because she heard them when they were given to the Law and Order Committee by the Department of Corrections which is responsible to the Minister of Corrections. These are the numbers that are given by the department. The department says that the Auckland Central Remand Prison under private management had operating costs of $35700 which inclusive of other costs were $57280 which was higher than for remand prisoners held in public prisons. The cost was $35700 compared with $32000 in public prisons and $57000 was the cost inclusive of related property costs in the private sector whereas it was $50000 for the public sector. So the public sector was cheaper. These are figures from advisers to the Government; those people can count. These are audited figures. This is solid evidence. This is not rhetoric. The member says she can count and she supports numbers but they are the same sort. 
This is the same attitude from National that it had when Treasury said that the emissions trading scheme was going to cost New Zealand $110 billion. Nick Smith said no it will not. Well who are we to believe: Nick Smith who counts on his fingers and his toes or Treasury filled with highly skilled highly trained people who can count and can do numbers. The Department of Corrections’ own numbers show that the Auckland Central Remand Prison run under the private sector was dearer than it was under the public sector. Every piece of evidence whether we look at it from Australia from Canada or from Britain shows that privately run prisons are poorer. 
There is another part—members should trust me and I will come to Part 2 here which will surprise the Minister—that shows some concerns. If members have a look at clause 7(2) they will read: “the contractor and the chief executive in the name and on behalf of the Crown may make any arrangements that they consider necessary or desirable to determine the respective liabilities of the Crown and the contractor in relation to any matter …”. A private cosy deal will be done between the chief executive and the contractor. 
Then we can go to section 199B of the Corrections Act substituted by clause 5 of the bill: “(1) The Crown is entitled to be indemnified by a contractor—”. It does not say “shall” or “must be”; it says “entitled to be”. That is permissive. So we can have a cosy deal by the chief executive and the contractor. Who will carry the cost of that? It will be the taxpayer. The point about that is that we have to rely—according to the Minister and the Government’s legislation—on the chief executive’s responsibility and integrity about that. I have no doubt about the responsibility and integrity of the chief executive. But I want to have oversight by an external audit carried out by an external agency and that is why I want the Office of the Controller and Auditor-General to be in the legislation. I want it to be compulsory that those things are done. This is by trust. 
When the member Melissa Lee says that Labour members are talking about ideology I say to her that we are not talking about ideology from our perspective; we are talking about ideology from the National Party’s perspective. This provision is simply an article of faith: National members believe that private contractors will do better when all of the evidence points in the opposite direction. Even when the Minister’s own department says that it is more expensive for a prison to be run by private enterprise than it is to be run by the department she is still going to go ahead and proceed with this legislation. When Treasury says it is going to cost $110 billion for the emissions trading scheme and Nick Smith says “That is not correct. We have got other figures.” whom do we believe Treasury or Nick Smith? In this particular case whom do we believe the Department of Corrections or the Minister of Corrections? I say that the department is correct. A private contract was more expensive before so there is no justification for it. 
The next point I come back to in this debate is that the Minister got up earlier and said how wonderful the Auckland Central Remand Prison was before because it introduced programmes for Maori. It was innovative—the first prison in the country to do that. Well I tell the Minister that that is not correct. That is simply not correct. The programme was started in Hawke’s Bay in Mangaroa Prison and all of the other prisons followed that. So we have now a fallacious argument being put forward to justify an innovation of a private sector prison. It was not a private sector prison that introduced that innovation; the facts show that to be the case. 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I need to answer a few of the questions that have been raised. The member the Hon Rick Barker has just resumed his seat. He said I had said the programmes for Maori were first introduced in the Auckland Central Remand Prison. But I said that was the first programme for remand prisoners. He should listen. 
The member also made some points there about costs. All through the debate tonight we have heard from Labour members but not one of them has talked about the need for rehabilitation or the fact that rehabilitation costs money. Unfortunately they continue to ignore the fact that the Auckland Central Remand Prison as a remand centre—the only one that was fully a remand centre at that stage—actually provided rehabilitation. It was contracted for 70000 hours. That was not something that was prevalent in the remand wings of our public prisons at that stage; that prison was in fact a leader on that. Those members ignore the fact that that contract cost money. Well this party is not going to ignore rehabilitation which is why we have doubled the number of rehabilitation places for our prisoners in our first term. 
Some questions have been asked about ideology. What is our ideology? It is pretty simple really; it is whatever works. Whatever works in corrections is what we are going to do. We will not do what the Labour Party does which is to say it has an ideology of being against the private sector. But here is a little question for the Labour members to answer; Mr Barker may like to answer it. If Labour members are so against the private management of prisons why was Chubb which Mr Barker called a glorified taxi service the company that under Labour responded to all the home detention call-outs? I ask Mr Barker why that was the case. It was because of course it is OK for Labour to call on the private sector when it feels like it but Labour will not have the private sector anywhere where Labour can make a point out of it. It was quite safe to do that when National was Opposition because the Labour members knew that National actually— 
Hon Lianne Dalziel 
: That is because it was home detention not incarceration in a prison. 
Hon JUDITH COLLINS 
: Oh Lianne Dalziel says it is not incarceration. Well she should tell that to the courts. I think it is extremely important to ask those questions. 
There have been some questions from Moana Mackey. She asked why the terms of the contracts are not in the bill. It is a good point except that the terms of contracts are in those contracts. That is a sort of basic fact. If she had looked at that she would understand it. 
Moana Mackey also said there would be corruption. She talked about judges being corrupt and sending prisoners off to jails. 
Hon Lianne Dalziel 
: In America. 
Hon JUDITH COLLINS 
: That was in America. Let us just look at this. Moana Mackey is saying judges in New Zealand could be corrupt. Well I actually do not have one instance of knowing of a judge in New Zealand who could be corrupt. 
Grant Robertson 
: She never said that. 
Hon JUDITH COLLINS 
: If she did not want to raise it why did she bring it into this debate? The other thing she said was that judges could collude with private prison managers. She said that happened in America so it is obviously applicable here! Well in New Zealand— 
Hon Member 
: So the Minister admits it happened. 
Hon JUDITH COLLINS 
: No no. If the member wants to know about it she should answer this question: who decides to which prison a prisoner goes? It is actually the Department of Corrections. Is she now going to say the Department of Corrections is corrupt as well? Is that what she is going to say? When it comes to incarceration this is a completely different system than that which operates in any of the states of America. We do not have politically elected judges; we have appointed judges who are appointed until their retirement age. The vast majority of our prison population will be in the State-managed prisons. 
Chris Hipkins has asked about Rimutaka Prison and about how many prisons would be under private management. I wish he had listened because I have said time and time again all year—and I have put out a number of press releases on this—that we are looking at two: the new prison being built at Mount Eden and a new prison possibly being built at Wiri which is in Auckland. So we are not talking about wholesale privatisation. 
Metiria Turei 
: Who pays for the buildings? 
Hon JUDITH COLLINS 
: The member from the Greens likes to pipe up and make her voice heard now. She said she went to the Auckland Central Remand Prison. What did she say? She loved the innovation. She said it was all because of Dom Karauria who was the manager. She then went on to allege corruption in that prison. She said the people were fudging the statistics. That is what she said about the manager of that prison and she should be ashamed of herself for making that allegation. That man is a very impressive manager of prisons and she would be very lucky if he came back here. 
What are some of the other things? Oh yes—Lianne Dalziel. She talked about the core functions of the State. I am actually with Phil Goff on this one: when it comes to prisons it does not matter who owns them and it does not matter who manages them; what matters are the outcomes. The outcomes from privately managed prisons and our State-run prisons should be all about rehabilitation: preventing people from being re-victimised out in society and making sure that we do not simply lock people up and leave them there. When Labour came into Government— 
Metiria Turei 
: You’re wasting time and money on private prisons when you should be dealing with the public sector. 
Hon JUDITH COLLINS 
: If Miss Turei would listen she would learn something. 
Simon Bridges 
: She doesn’t listen. 
Hon JUDITH COLLINS 
: I know she does not listen. She could listen to this: when Labour came into Government there were— 
Hon Steve Chadwick 
: I raise a point of order Mr Chairperson. Is it not the usual format for the Minister in the chair to actually answer questions raised by previous speakers rather than give a political diatribe from the chair? 
The CHAIRPERSON (Eric Roy) 
: Leave was sought for a wide-ranging debate on the remaining parts and I think the Minister is having a wide-ranging debate on the remaining parts. 
Hon JUDITH COLLINS 
: Thank you very much Mr Chair. It shows that those members do not like the answers do they? They really do not. Miss Turei has made all sorts of comments about the integrity of the people who worked at Auckland Central Remand Prison. She has said from hearsay evidence given to her in a select committee that the place was corrupt yet she has at the same time said the manager there was one of the most impressive people whom she had met. She also said that prison was innovative. That is what she said. So that member is extraordinarily confused. However in amongst her ideology against privately run prisons she has now said we should have a partnership with iwi in the public sector. I am glad to hear that the Greens have come round to public-private partnerships. I look forward to their support when we build the new prison at Wiri because I think that will be very very interesting. 
Generally I ask the Opposition members to please stop ignoring the 70000 hours of rehabilitation that Auckland Central Remand Prison put in and to please stop denigrating the people who did good work at that prison. They were good people they did good work and they should not be denigrated just because the Opposition has an ideological problem. The only ideology that we are bringing to this issue is whatever works and I am very proud to see that. 
JACINDA ARDERN (Labour) 
: 
 I am pleased to take a call. I have to say though that I am somewhat disappointed to follow what can only be described as an absolute trivialisation of some really significant points that had been made not only by the Labour Opposition but also by my colleague Metiria Turei. I will touch on a couple of points that the Minister in the chair raised. In particular she tried to defend private prisons by stating that rehabilitation programmes had taken place under private contractors in remand prison. Remand prisons are for prisoners on remand! Fifty percent of those on remand are subsequently found not guilty; they are under the presumption of innocence. And we are operating rehabilitation programmes on some of these prisoners? No wonder we have inefficiency problems with the private sector! 
I would also like some clarification perhaps if Jonathan Young would like to take another call on what exactly is meant by the decency agenda that private prisons are operating. I was confused by this term and perhaps he could shed some light on the decency agenda. 
The UK is an interesting example to bring up—the UK and its large number of private prisons. I am not sure whether Mr Young heard the Labour Opposition point out that 10 of the 11 worst-performing prisons in the UK are private prisons. In fact that might be the very reason why in the UK they established something called independent prison monitoring boards. 
I would like to spend a little bit of time talking about the independent prison monitoring boards because it is a point raised by my colleague Moana Mackey. I guess parallels could be drawn between what was established in the UK and the monitors that the Minister has raised in Part 1. But I will go through some of the technical differences because I think the monitors that are set out in this bill are actually inadequate in comparison with what the UK has set up; I want us to keep in mind that the UK set them up because of the dire circumstances under which some of these private prisons were operating. 
I want to go back to new section 199E and the monitors. New subsection (1) of that section sets out the number of monitors that could be appointed at any one time and I ask the Minister whether she has any expectations over what is an adequate number of monitors for any given prison. The responsibilities for these monitors as set out in this bill are significant. In fact in the UK the independent prison monitoring boards have multiple members on them in light of the fact that they deal with such weighty issues and they are frequently called to report to the Home Office on the operations of the prisons so I would like to hear whether the Minister has any expectations in that regard. 
I would also like to refer to section 199E(1A) in clause 5 which sets out that the chief executive may appoint one or more monitors under the State Sector Act. New section 199D(2) in clause 5 then states that the monitor is responsible to the chief executive for the assessment and review of the management of that prison and must report to the chief executive “at any intervals”. I want to draw out the question of independence at this point and it is something that has been raised by my colleagues. Again there is a significant difference between the independent boards that we see operating in the UK and those we see here. The chief executive appoints the board and it reports to the chief executive. New section 199E(4) states that “The office of the monitor may be combined with any other office appointment or position if the chief executive is satisfied that the duties of that other office appointment or position are not incompatible with the duties of a monitor.” 
That is a huge amount of discretion placed upon the shoulders of one individual person. The fact that the chief executive can appoint however many monitors he or she chooses and makes a decision over whether there is any conflict of interest with that individual and can call the monitor to make reports at any time is a high concentration of power in one individual and potentially for the one or two individuals whom he or she may appoint. 
One of the reasons I have such an interest in independent prison monitoring boards is that when I was resident in the UK I made an application to become a member of one. I had an interest in the way those boards operated and the fact that they drew on lay people—members of the community—who had no conflict of interest in the way for instance Brixton prison was managed. I was one of those individuals. I had no vested interest in any regard. The chief executive would not have been the one making my appointment to that board. I would have been entirely separate to the process. My only interest therefore would have been the transparent and correct operation of that prison as set out in legislation. I think that is in stark contrast to the way these monitors are set out in this legislation. I would be interested to know whether the Minister took into account any comparisons such as the way the UK for instance operated which is an area I have some interest in. 
I would like to go on to a couple more provisions as they relate specifically to the monitors. New section 199F(2) states “Every contractor must ensure that any monitor has free and unfettered access at all times”. That actually confers on the monitors greater powers than the Auditor-General has. The Auditor-General has an independent responsibility—a responsibility not invested in the Auditor-General by the chief executive—yet the monitors have greater powers than the Auditor-General. I think that is an oversight and therefore I am disappointed that we have not adopted today what I think are very reasonable Supplementary Order Papers put forward by my colleague Rick Barker. Those Supplementary Order Papers would have rectified and clarified that situation. 
I come to new section 199G(2A) which within that context states that a monitor is also able to “investigate any matter relating to that prison or any prisoner in that prison”. I think that raises an interesting point over the subject matter of the reports that will come from the monitor. For instance the independent prison monitoring board actually spends a lot of time taking complaints from prisoners about the abuse of very very basic rights. I do not want to get into a debate over whether we are granting too many rights to prisoners but the independent prison monitoring board did have a role in ensuring that there were basic standards in those prisons. Often those were kept in check only by complaints made by prisoners themselves. Will a monitor be able to accept complaints and investigate matters raised by prisoners directly? I accept that I may have missed that detail in the bill but I would be happy for the Minister of Corrections to clarify that for me. I do note that the Minister is quite busy but I suspect that the Hon Nathan Guy is not raising with her matters related to the bill; perhaps he is discussing designs for the next passport because that is obviously a weighty issue that the House has spent significant time on today. 
I would like to get to another important issue and that is what happens to the reports—the very important reports—being produced by the only one with access and apparent transparent access to the private prisons. What happens to the reports generated by the monitors? There are lots of provisions relating to what they can do how they can get the information and how they can be tasked by the chief executive but I did not feel that there was enough consideration of what then happens to those reports. The Opposition has already requested that access is granted under the Official Information Act. I do not feel there is quite enough clarity at this point that they will be covered by the Official Information Act and that we will be able to gain access to the reports produced by monitors. Again that is perhaps something the Minister could clarify for us. I think that would be a great service to us. 
There is a provision under section 199I that says that prison management contracts are to be presented to the House of Representatives. We will then in comparison have greater transparency around the content of contracts than we will around whether the contracts have been abided by and fulfilled and I think that is an inconsistency. It is one thing to know what is included in a contract but it is another thing to know whether we have the powers and tools to ensure that those contracts are being abided by. It would be only right to have consistency between those two provisions. I request that the Minister draw out her reasons why she believes that the reports produced by monitors should not be subject to section 199. 
Hon Dr PITA SHARPLES (Associate Minister of Corrections) 
: 
 Tena koe Mr Chairperson. I will take a call on the Corrections (Contract Management of Prisons) Amendment Bill. To make it very clear I say that I am the Associate Minister of Corrections. I asked for the portfolio because I have spent a lot of my time since the 1970s working in prisons in New Zealand and Australia and I thought that maybe I could offer something to the prison service by being involved in that capacity as a Minister. There are good prisons and bad prisons in terms of their administration and treatment and of the duties they perform. I have found good prisons in a private capacity and also in a public capacity and poor prisons in both as well. 
I favour the introduction of private prisons in the sense that it can give Maori an opportunity to be more involved in looking after their own and perhaps rehabilitating them. The role of a prison in the first place is really to incarcerate people and to make the public safe. I believe that the role can be extended to rehabilitation but it needs a particular programme and culture within it in order to perform those tasks. 
A variety of Maori programmes have been introduced in prisons for ages. Mention has been made of the Maori focus units. The first one was in Hastings; I was one of the three people who designed that prison. It did not perform how we wanted it to and that is what I want to talk about. In New Zealand we have more prisons and more people in prison than we should have for our population. As a result the prisons are finding it difficult to cope so they are putting conditions on each other. There is a lot of interaction between prisons which stops the units from running in their own rights as single prisons. In the Maori focus units for example suddenly there may be no more beds left in the matua prison—the senior prison—so they put people into the Maori focus unit who do not want to be there sometimes who are not Maori and who do not fit into that programme. It erodes the value of the programme that is operating. There are other factors too but unless a programme is set up and is protected so that it can run in accord with why it has been set up then it is very difficult to carry on. 
My own preference is that we build more rehabilitation centres. We have designed some that we are hoping to launch next year. The value of the rehabilitation centres is that they will bring the recidivism rate down which doubles the amount of beds available. If there is a rehabilitation centre with 60 beds and we manage to keep most of those people out of prison that means that 60 beds are available in the main prison as well as in the rehabilitation centre because those people are not coming back. It is good to try. We have tried quite a few things in prison but it has been very difficult to maintain them. 
Hon Lianne Dalziel 
: But they’re not-for-profit aren’t they? The ones that work are not-for-profit. 
Hon Dr PITA SHARPLES 
: I cannot answer that because I have seen rehabilitation centres run both in private prisons and in public prisons and I do not think that the profit thing needs to come into the equation myself. I think it is up to the manager. 
The member is right about Dom Karauria and the good job that he did at the Auckland Central Remand Prison but that came down to the manager and the freedom that he had to operate. He saw our P programme and he saw that P was a problem in his prison. He gave $13000 towards our P programme and he asked us to come into his prison and present to all of his staff. He made his entire staff except those few who were holding the keys at that moment observe the programme. At the end of it he stood up in front of them and said that he did not want to see any of them involved in P trafficking or helping to get P. He mentioned a guy who had left the week before who was sacked because he was involved in P and he said that he did not want to see it happening there. So I was pretty impressed with the prison that he ran. He also had a cultural arm at the prison which Peter White ran. He had elders in there by the dozen and those elders were able to interact. I am not saying that this cannot happen in a general prison but it is harder in New Zealand because of all the layers of culture that have happened in our prisons. 
During my first 3 years in Parliament sitting on that bench over there I noticed that quite a few Ministers of Corrections passed through. Corrections was regarded as the portfolio from hell. That was the korero. But you see it need not be like that if we are able to effect some change and some difference. Most of the people working in prisons are well motivated and I mean that having worked in that area since 1972. Also most of the inmates start on little offences like sleeping in a truck bay in town smashing a bus seat or something like that. It builds up to a welfare home then a low-security prison then a medium-security prison and then a maximum-security prison. 
I visited some private prisons in Australia. I thought they were pretty good because they had a case management system where every inmate had a personal case manager and every staff member had a number of inmates for whom he or she was responsible. That case management gave people an opportunity to aspire to privileges. They had a privilege system. The inmates would get more visits more leave and stuff like that depending on their behaviour and how they operated in the prison. I think that those sorts of things can come in more easily in a private prison than they can in the mainstream prison because our mainstream prisons are connected to each other. We might have to move people. We have a programme of trying to relocate inmates near to the town where they come from and that causes all sorts of complications as well. 
There is a case for private prisons. I think though that if we do that then we have to have a public debate. I think we have to look at things like security escape and so on and we have to make sure that people have had the chance to have that debate. We have to look at the human rights—the rights of inmates to appeal and to have their appeal heard properly. All of these things have to happen if we are to extend into the private capacity. At the end of the day I think we should try it because the way we are doing it now is not working despite really good attempts being made in the Department of Corrections. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 I came down to the Chamber and I was not inclined to say anything on this Corrections (Contract Management of Prisons) Amendment Bill but in a way I could not help myself when I listened to the Labour members. When we listen to Labour members these days whether the issue is prisons education health or accident compensation it does not really matter because what they are about is means. They are about public delivery irrespective of whether the outcome is any good. Those members do not start with objectives and goals and then ask what the best way to deliver them is. Where they start is with the means and it has to be the public delivery. It would not matter whether private prisons rehabilitated 50 percent of prisoners and public prisons rehabilitated only 10 percent because the members opposite would still favour public prisons. That is a tragedy; that is a real tragedy. 
I suggest to Labour members that they are going nowhere until they focus on objectives and goals and not on means. They are in favour of a public system in accident compensation that will lose $4 billion this year. They are not actually interested in delivery. They are interested in a public education system where 30 percent of our young kids come out unable to read or write properly. They are not interested in the kids but they are interested in public delivery. At the end of the day that is what this is all about. It is a question of whether we can introduce a measure of competition. Without doubt competition is vital. It is just as vital within the public sector as it is within the private sector. 
It would be fair to say that competition amongst Government enterprises and between Government enterprises and private organisations helps to ensure that the Government is the servant of the people and not the other way round. Whether or not the Labour Opposition likes it the fact is that competition is a disciplinary force. It provides consumers with a protection against poor quality services. I suggest that some private sector competition in the field that we are talking about—prisons—would do exactly that. The difficulty for the Labour Party I think is that those members have locked themselves so much into the means that they have lost sight of the people whom they are trying to help. Until they get back to focusing on people rather than on means they are going nowhere. 
A recent publication on education by their former Prime Minister which she sent to a lot of parents mentioned public education in that letter 12 times and never mentioned a child once. That is where Labour has got to which is a great tragedy. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I will talk about some aspects of the Corrections (Contract Management of Prisons) Amendment Bill where I think the Minister in the chair the Minister of Corrections would agree that we are basically on the same page. What she has been trying to achieve particularly in the new section 199 which is in clause 5 is about safety and accountability. I ask the Minister whether it would be fair to say that what we are talking about within this bill is an attempt to establish some parameters for safety and accountability in this process. Yes I think we have some nodding from the Minister. 
The question I then have is to do with for instance new section 199(1)(c)(ii) which states that one of the requirements of the contract is that there be “sufficient suitable staff members to enable the contractor to carry out the contractor’s statutory and contractual obligations in relation to the prison;”. What we know from private prisons internationally is that they drive down the ratio of staff to prisoners. We know that. The statistics from America tell us that. A report from the US National Council on Crime and Delinquency said that privatisation led to a 15 percent lower ratio of staff to inmates. That is supposed to make us safer. That is supposed to make communities safer. That is supposed to make our prisons safer. That clause is in this bill. I am sure that the intent of it from the Minister of Corrections’ point of view was to support some kind notion of safety within our prisons and safety for our community but we know from overseas evidence that it goes the other way and that we will end up with fewer staff and more problems within our prisons as a result. 
The Minister stood up earlier and said that the problem with Labour was that we did not understand and we were interested only in ideology but that National was after what works. The problem is that privatisation has not worked in the United States of America. It has not worked in Australia. It has not worked in Canada. It has not worked in the United Kingdom. I have great respect for Dr Sharples and I think given his experience that he should be the Minister in the chair right now. I think we would be a lot further advanced if he was. But we know that empirically privatisation does not work. The Minister simply stands up and says that the Labour Party does not understand what works. We have not heard from the Minister what measures that have actually worked have driven her to do this. We have not heard that. The only evidence presented about the performance of private prisons has come from this side of the House. I think that these particular parts of this bill try to establish a framework that will be safe but we know that that framework has not worked internationally. 
The other aspect that I think the Minister is trying to establish is some sort of accountability of private prisons. The problem we have is that this bill decreases the transparency and accountability of the prison system. Earlier on tonight we discussed the fact that the Law and Order Committee obviously had some inclination towards the importance of accountability and transparency because it had included within the bill that the requirements of the Public Records Act be met in terms of the prisons and the prisoners. That means that the Chief Archivist can get in there and find out what is going on in the prisons. Why then would we not let private prisons be exposed to the Ombudsman or to the Auditor-General? Why would we not want those agencies which are closely related to Parliament and to ensuring transparency and accountability to be involved? 
In the end what we are reduced to here in terms of accountability is monitors appointed by the chief executive. We are in fact reducing the ability to hold private prisons to account. We know that we can question the Minister and the Department of Corrections through the select committee process through oral and written questions and through inquiries. We cannot do that with a private company. So the clauses within this bill that are trying to create some kind of regime of accountability are simply lacking. We heard earlier tonight from the Minister that the reason she was not supporting the Supplementary Order Papers that would have done that that would have brought this legislation into line was because they had not been considered by her caucus. That is simply not on. Ms Goudie will tell us that these matters were raised—and I have checked with Labour members—at the Law and Order Committee. 
Sandra Goudie 
: What matters? 
GRANT ROBERTSON 
: Having better accountability arrangements and better transparency and involving the Ombudsman and the Auditor-General. These things could have been dealt with but the Minister airily dismissed them saying that they were not discussed at her caucus so she was not prepared to consider them. That is unacceptable. What we have here are accountability and transparency arrangements that will make it less possible for New Zealanders to know what is happening in their prison system. 
The Ombudsman’s role is critical within the prison system. Anyone who has dealt with complaints at all at any time in his or her role as an MP or outside this House will know the important role that the Ombudsman can play in the prison system. To not have that fully available as we go down this unknown path of private prisons is very very dangerous. Then we come to the Auditor-General. The Law and Order Committee was told that the Office of the Auditor-General would not have the ability to scrutinise this new arrangement in the way that it normally would. The Office of the Auditor-General reported to the committee that under this bill it would not have the power to audit a private company and provide an opinion on the performance of that company. Once again we see this bill reducing accountability and reducing transparency. What I am trying to say here is that Part 1 is the accountability section. Section 199 is the new accountability section. We have the Chief Archivist involved. That is fantastic! The Chief Archivist can be there. But what we do not have is the ability for the Ombudsman the Auditor-General and ultimately Parliament to have the kind of oversight that is required. 
This bill is flawed in principle and it is flawed in practice. But from the Government members tonight we have simply not heard any justification or evidence. We have seen that there will be reductions in accountability and reductions in safety. This bill has gone through tonight without National members standing up and doing anything more than indulging in broad ideological statements. Members on this side of the Chamber have made sure that we have defended our principled position our ideological position and we have gone on to debate the practical implications of this bill. We have not heard that from the other side of the Chamber. That means we are passing a law under urgency that will decrease safety that will decrease accountability and that will decrease transparency and the National members cannot even get up to justify it. 
SIMON BRIDGES (National—Tauranga) 
: 
 I have to say that I have been frustrated while I have been sitting here throughout this debate by the misinformation that I have heard from the Labour members. I do not think it is wilful misinformation. Members opposite are not setting out to be duplicitous and to say things that are dishonest; I do not think that at all. A fog or a mist has come over those members’ eyes though through their ideology and dogma. When I think of their ideology I think of old men who died probably about 150 years ago and who were caught up in arguments about profit the proletariat and so on. When all that debate is boiled down that is what it comes to from those members’ perspective. It comes down to ideology. 
We have heard from Grant Robertson. I am simplifying it but I think he said that profit equals bad. Profit equals bad. That is what I heard. I admit that he fancied it up and he titified it but he made the argument that profit is bad— 
Hon Member 
: “Tit-ify” Harawira? 
Chris Hipkins 
: The National Party would know all about that! 
SIMON BRIDGES 
: I tell Chris Hipkins to look that one up. There are more meanings than he thinks and he should get his mind out of the gutter. Grant Robertson said that profit is bad. He said that if an organisation has a business imperative in the prisons and is making a profit then through those members’ leap of logic that compromises what those who are running the prison are doing. How ridiculous I say to Grant Robertson. That argument goes something like this if we apply it in other sectors. Toyota makes a profit from manufacturing motor vehicles and because it makes a profit that somehow compromises their safety record. 
Hon Members 
: No. 
SIMON BRIDGES 
: Well that is what the member said. He was making the argument that profit is bad. The members opposite do not like it. They say that when businesses make a profit that somehow compromises them. How ridiculous! 
We heard the same sort of ideological bunk from Lianne Dalziel who I admit dressed it up in a kind of human rights language of liberty and talked about the Israeli Supreme Court and so on. But again if we boil it all down it is ideology. 
We heard the same from Jacinda Ardern. She said that making a profit was somehow bad and that the reason it was bad was that prisons are a core Government function and service. Again I say that is absolutely ridiculous. How absolutely ridiculous! Firstly the Department of Corrections will be overseeing all these prisons. Secondly I do not think anyone in this House would argue that health and education are not core Government functions. Those members argue that having private schools and private hospitals corrupts the whole system when what they actually do is to add to the system. They free up public resources and enhance the system. That shows the ideology of members opposite. 
The Minister of Corrections Judith Collins is exactly right. What we have from this Government and from the Maori Party is a philosophy that says to do what works. Let us be pragmatic about it let us look at the evidence and we will do what works. We are beginning to see that under National and I think that is a very good thing. 
Another point that has come out in the debate concerns price. Those members argue that the evidence that the price is more expensive stacks up and that we would be paying more under a private prison contract. How ridiculous again! We are not comparing apples with apples for starters. We could get into the figures. I do not want to have a sterile debate on the figures but the reality is that when the Auckland Central Remand Prison was privatised it cost I think $57000 per prisoner as opposed to $61000 in the wider system. We have seen cost advantages in Australia and England. If we are talking price then the arguments go both ways. We could argue about the numbers but what is more important than that? This measure is not about the numbers; it is about having effective and safe prisons rather than having cheap ones. 
METIRIA TUREI (Co-Leader—Green) 
: 
 The first thing I say given the contribution we have just heard is that I make no apology for believing that profiteering from systemic racism is a bad thing. Making a profit is not necessarily a bad thing but making a profit from systemic racism is bad and this Committee should not be supporting any kind of legislation that does that. 
I will address some of the issues raised by the Associate Minister of Corrections because I thought he made a really important contribution given the argument that this legislation is supposed to be good for Maori and given the fact that the Maori Party is supporting it. The process of colonisation that has impacted on the Maori communities in this country is felt nowhere more obviously than in the oldest construction of the colonial Government which is the criminal legal system and penal policy. They are the oldest constructions of the colonial State. The results of the colonisation process and the systemic racism that has arisen out of that process are clear. More than 50 percent of the prison population is Maori and more than 50 percent of the female prison population is Maori. Wahine Maori are in jail in appalling numbers. The systemic bias in the system leads to Maori being more likely to be stopped searched arrested convicted and jailed than their Pakeha counterparts. Even those involved with the Youth Court have said that rangatahi Maori—young Maori—are more likely to face the Youth Court. 
Hon Member 
: The chair of the Law and Order Committee is shaking her head at what you’re saying. 
METIRIA TUREI 
: It is unbelievable that National cannot face the facts of the matter. Rangatahi Maori are more likely to face the Youth Court even though their offences are generally of less seriousness than the offences committed by their Pakeha counterparts. We see the evidence in the legal system everywhere and this is the system in which our whanau exist. 
I agreed with the Associate Minister of Corrections when he talked about the different kinds of options for dealing with Maori imprisonment and Maori rehabilitation. Habilitation centres are absolutely the way to go; not the continual building of prisons—habilitation centres that are whanau focused and deal with systemic issues as well as taking a whole whanau approach. The Maori focus units where they have been successful have done really well. The systemic problems within the Department of Corrections have made that more difficult but the example that the Maori units provide is fantastic. 
We absolutely agree with Maori involvement in the management of prisons. The only way to deal with the Maori prison population and to ensure that there is real rehabilitation from a tikanga point of view is by having Maori involved in the management of prisons and having kaumatua in the prisons. We agree with that completely. I do not agree with how we then get to the totally relaxed view that somehow the market will be able to provide those things where the Public Service has failed. On what basis can we say that the evidence is there that the market will provide that when the public system has failed? Jane Kelsey has a really good quote in her submission. She said that in the assumption that both market forces and our system of justice are colour-blind Maori are invisible. That is the implication of assuming with no evidence—not a skerrick of evidence—that the private sector and market forces will be able to provide these kinds of services for Maori and for the Maori management of prisons. 
Certainly nothing—not a thing—in the Corrections (Contract Management of Prisons) Amendment Bill will enable what the Associate Minister of Corrections was talking about to happen. There is no requirement for any kind of joint venture with any kind of iwi organisation. There is no Treaty clause in the legislation. There is no requirement for Maori to be part of the staffing of those prisons even though we know that more than 50 percent of the inmates will be Maori. There is no requirement for cultural training of the staff who will be in that prison. We heard evidence from the staff of the Auckland Central Remand Prison that they bring over from Australia staff who have no concept of how to deal with Maori prisoners or of the tikanga issues involved. But the bill does not say anything about requiring cultural training. There is no requirement in the legislation for tikanga Maori programmes to be managed within the prison. The Minister has talked in the past about that being part of the contract but where is the guarantee? 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Firstly I agree with many of the comments that Metiria Turei has just raised. I totally agree with her that it is really important that Maori are involved in the management of prisons and have a meaningful say in that. I totally disagree with the position put forward by the Associate Minister of Corrections Dr Pita Sharples that the best way to do that is to privatise prisons and put them over to the private sector. I think the public sector is perfectly capable of managing prisons. If we extended the Minister’s argument to its logical conclusion we would then start to ask why the public sector would for example have any role in schools in hospitals or in the provision of any other services. If we take that to its logical conclusion it simply does not make sense. 
I will respond to some of the comments that Simon Bridges made. He said that the notion that the incarceration of prisoners—the deprivation of people’s liberty—is a core role for Government was ridiculous. If it is not a core role for Government for whom is it a core role? It certainly should not be a core role of the private sector to deprive somebody of his or her liberty. Where do we stop if we start handing over the power to do that to the private sector? Do we stop at the police? Do we stop at the army? Where do we stop when we are dealing with issues around fundamental human rights? There are very few human rights that are more fundamental than the right to freedom and the right to liberty. So I think that Simon Bridges has completely missed the point. 
The member talked about the fact that he did not want to make this a sterile debate by quoting figures; that is because there are no figures to support the position that he put forward. The figures show that it is not cheaper for the private sector to run prisons. In fact in the case of the Auckland Central Remand Prison it was more expensive for the private sector to operate it which shows that private prisons are not more effective in reducing recidivism. From the few studies that are available from overseas—and we do not have any from New Zealand because of the very short period of time that we had a privately run prison—it becomes very apparent that the privatisation of prisons and the handing of their management over to private prison managers does not reduce recidivism at all. This is absolutely a very clear example of the stark differences between the Labour Opposition and the new National Government. As my colleagues have pointed out the National Government is fundamentally committed to a model that privatises profits and socialises losses. 
Finally I will talk about one technical point; I wanted to raise it earlier but this is the first opportunity I have had to do so. It is covered in Part 1 and concerns the liability of the contractor but it extends to the wider issues that we have been debating. Under the contract provisions in the bill the contract must ensure that “Every prison management contract must impose on the contractor in relation to the management of the prison a duty to comply with—” among other things “the New Zealand Bill of Rights Act”. Members will find that provision in new section 199(2)(b) in clause 5. Hopefully the Minister in the chair the Hon Judith Collins will talk about this matter in her final reading speech. But I ask in respect of new section 199B which is about the liability of the contractor what would happen if a private prison operator were to breach the human rights of a prisoner for example or were to cease to exist for whatever reason. Where would the liability fall for that? 
We have seen some examples in recent years of significant sums of money going from the Crown to prisoners when it has been determined that their human rights have been breached. So I am keen to know from the Minister where the liability for any breaches of that would fall particularly in light of section 199B in the bill—and I did not get a chance to raise that earlier in the debate. I will keep my comments very short because I am aware that the time for this debate has nearly expired. 
This is clearly a decision by the National Government that is driven solely by ideology. It cannot be driven by evidence because there is no evidence. I have sat through the entire debate this evening waiting for any member from National the ACT Party or the Maori Party to actually produce a single shred of evidence that a private prison will be more effective than a public prison in any way but all members opposite have been able to do is talk in very general terms. There is no proof. 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Part 2 agreed to. 
A party vote was called for on the question  
That the schedule be agreed to. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Schedule agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to.  
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to.  
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to.  
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Clause 3 agreed to. 
House resumed. 
Bill reported without amendment. 
The CHAIRPERSON (Eric Roy) 
: I move  
That the report be adopted 
. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Report adopted. 
Third Reading 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I move  
That the Corrections (Contract Management of Prisons) Amendment Bill be now read a third time 
. This bill puts in place the Government’s policy to allow competitive tendering for contract management of prisons on a case by case basis. The Government wants New Zealand to have a world-class corrections system. We believe that allowing for contract management of prisons will create much-needed opportunities for the entire system to benefit from outside-sector initiative and expertise. We want a contract manager to support and enhance the Department of Corrections’ overall performance in providing for safer communities and reducing reoffending. Contract management will allow learning to be gained and shared throughout the prison system so that all prisons become more effective and efficient as a result. We will ensure that real gains are made in providing opportunities to improve outcomes for Maori who encounter the prison system. 
The previous experience that New Zealand had with contracting out prison management at the Auckland Central Remand Prison earlier this decade was generally positive. In particular the Department of Corrections was able to retain many of the innovations introduced by the contract manager. This bill strikes a good balance between a flexible contracting framework that will encourage innovation and the protections needed to ensure public accountability. While providing for a number of different safeguards the bill also gives scope to contracting parties to negotiate the specific terms and conditions of their contracts with relative flexibility. This is important because the management of each of New Zealand’s prisons will differ depending on the unique characteristics of the prisoners at that prison its geographical locality and the interventions to reduce reoffending operating within that prison. Very few of our prisons are exactly the same and the bill provides room for contractors and the chief executive of the department to agree on how the needs of any one or more of our prisons can best be met. 
Much of the debate on this bill has focused on the safeguards needed to ensure that the contract manager is held accountable. It is worth canvassing the most significant of those again. Because the changes reflected in the bill will sit under the umbrella of the Corrections Act 2004 they must be carried out in a way that is consistent with the principles of that Act. Those principles guide the operation of all of the corrections system including contract-managed prisons. The principles include the maintenance of public safety as the paramount consideration and also involve the fair treatment of prisoners their rehabilitation and their reintegration. As with public prisons contract prisons will have to comply with all relevant New Zealand legislation. This includes contractual obligations to comply with the Corrections Act and the New Zealand Bill of Rights Act as well as all relevant international obligations and standards. 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. That will not change when a prisoner is held in a prison managed under contract. The performance management regime is set out in the bill. The contract must specify objectives and performance standards for the management of the prison and for the care of the prisoners in that prison. The bill states explicitly that they may not be any lower than the objectives or standards already required of prisons managed by the department. 
One of the primary features of the bill is the way in which it supports the chief executive’s accountability by establishing the role of prison monitors. That is one of the areas that received the most scrutiny when the bill was at the Law and Order Committee and the monitors regime now in the bill is comprehensive. The bill establishes three different types of prison monitor: primary monitors who are located at the prison and monitor its compliance with the terms of its management contract and with the law on a day-to-day basis; those who assist the primary monitors to undertake their role as and when required which means that there will always be sufficient staff resource available to properly oversee the activities of contractors; and specialist monitors with particular expertise in different areas who are appointed from time to time to investigate certain matters if and when they come to light. Examples of the sorts of monitors who might be appointed in this context include the department’s anti-corruption team; its national intelligence unit; specialist health care staff who could be appointed to review health services that might be run by the contract prison; or experts in the provision of services for Maori who could review the suitability of the contractor’s Maori-focused initiatives. 
All of these different types of monitors have significant powers of access to staff prisoners prison records and all parts of the prison itself at any time of the day or night. They are all appointed by and report directly to the chief executive effectively acting as his or her eyes and ears in the prison at all times. In addition contractors will be required to provide reports on all serious incidents within the prison involving escapes escape attempts or prisoner deaths to provide regular reports on the use of disciplinary powers within the prison and the outcome of all disciplinary proceedings taken against prisoners and/or staff and to provide reports providing the details and results of all random drug testing that has been carried out within the prison. 
During the select committee deliberations on the bill and subsequently during the bill’s second reading debate a number of concerns were raised about the issues of public accountability and parliamentary scrutiny. I would like to point out that prisons managed under contract will be subject to the terms of the Official Information Act 1982 in exactly the same way as the department currently is. Contract prisons will also be subject to the Ombudsmen Act in exactly the same way as prisons managed by the department. That means that prisoners will continue to have the right to complain to the Ombudsman about any aspect of their management or treatment and the Ombudsman will continue to have the power to conduct independent investigations into the management and treatment of prisoners where it is appropriate to do so. Furthermore the Auditor-General is able at any time to investigate the way in which the department is managing any and all of its prison management contracts and for that purpose has access to all relevant documentation held by the contracted prison managers. The bill also requires every prison management contract or variation to it to be tabled in Parliament within 12 sitting days which will ensure that all the detail of that contract or any variation of that contract is publicly available. 
The bill protects the interests of staff working for a contract manager. The bill requires contract prison managers to comply with the requirements of those parts of the State Sector Act that invoke the requirement to be a good employer. Under the provisions of the bill it will be a contractual requirement for each contract prison manager to appoint and train sufficient suitable staff to enable the contractor to carry out its statutory and contractual obligations. This is a very important qualifier. Not only must sufficient staff be appointed to enable the contractor to carry out its various obligations properly but also they must also be suitable staff. They must also be appropriately trained on an ongoing basis. The contractor must regularly report on appointments and training so that the prison monitor and chief executive can monitor their performance. 
The bill also makes a specific point of protecting 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. 
The treatment of prisoners is also well covered. The chief executive of the department will remain responsible for all prisoners in New Zealand and accountable for what happens to them. That includes prisoners held in prisons managed under contract. Contract prison managers must comply with the same obligations and standards as public prison managers. If they do not they will be in breach of their contract. Prisoners will also have the right of redress directly against the chief executive who remains answerable for what happens to them while they are in the custody of the private provider. The continuing role of the Office of the Ombudsmen also provides further protection for prisoners. 
The bill has been further enhanced during the select committee’s consideration by the committee’s recognition of the importance of providing prisoners with employment and skills development. Employment and skills development are essential activities that help prisoners with their eventual reintegration back into the community and the committee agreed that those things should be recognised in their own right. The bill now requires contractors to provide specific reports on the provision of employment and skills development to prisoners alongside the pre-existing requirement to report on rehabilitative and reintegration programmes. 
Finally the bill makes an important provision for the department’s ongoing relationships with other State agencies to continue unaffected by the fact that some of its prisons will be managed by private sector providers in the future. A number of other Government agencies such as the New Zealand Police the Ministry of Social Development and the Department of Labour rely on information about offenders provided by the Department of Corrections in order to perform their own statutory functions and duties. The bill ensures that that information will continue to flow as it needs to between staff at prisons managed under contract to the Department of Corrections and relevant Government agencies. 
Opening up prison management to tender will enable the Government to reap the benefits of innovation in the prison system as a whole. In keeping with the principles of the Corrections Act this bill will improve public safety and contribute to the maintenance of a just society by contributing to the safe secure humane and effective containment of prisoners. This bill will provide an effective statutory framework for the regulation and control of prisons managed under contract in New Zealand. I am committed to its successful implementation. I now commend this bill to the House for its third reading. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 The quality of the debate justifying the passage of this Corrections (Contract Management of Prisons) Amendment Bill has been very poor. Essentially Government members have taken every mention of the failure of the private sector internationally as a reflection being cast on the quality of our own judiciary and our own Public Prisons Service when in fact the opposite is true. Our position on this side of the House supports the integrity of our prison service and the independence and integrity of our judiciary. We have argued a philosophical view and it is quite clear that there is an ideological divide across the House. Our view is that the deprivation of liberty is one of those core State functions that should not be contracted out. 
I believe that international jurisprudence is coming in behind to support the view that we would present. I know that it is not popular with members of the Government because essentially they do not believe that any human rights arguments are available to be debated on this subject but that is not the case internationally. I have warned the Government of the implications of the Supreme Court of Israel’s decision to overturn the privatisation measures that had been undertaken there. But these warnings have been ignored by the Government. I want to remind members of what they say because I think it is worth writing it into the record. 
Essentially the argument was that the Supreme Court of Israel would not normally intervene in economic policies but in this case the President of the Supreme Court held that the legislation harmed basic constitutional rights. Israel’s basic legal principles hold that the right to use force in general and the right to enforce criminal law by putting people behind bars in particular is one of the most fundamental and most invasive powers in the State’s jurisdiction. Thus when the power to incarcerate is transferred to a private corporation whose purpose is making money the act of depriving a person of his liberty loses much of its legitimacy. Because of this loss of legitimacy the violation of the prisoner’s right to liberty goes beyond the violation entailed in the incarceration itself. Efficiency she wrote is not a supreme value when the most basic and important human rights for which the State is responsible are at stake. I know that members opposite do not like listening to the learned words of a Supreme Court judge but the point I was making was simply to warn the Government that this is a movement that is happening internationally and we cannot be impervious to those views that are being expressed because they will matter to New Zealand as well. 
The Government has said there is no core function of the State; it has said there is no such thing. There is nowhere that it would draw the line; anything is up for privatisation or competitive management. We were told by the Minister of Corrections that the only question we need to ask is “What works?”. That is the only question. Anything goes but it has to work. I make no apology for holding the views that I do but it would be a mistake for anyone in this House to argue that they conflict with the mantra “What works?”. I am actually a great believer in what works. It has been the driver behind the Opposition’s offer to the Government to work collaboratively on early intervention so that we can reduce our prison population. 
I was invited to a meeting with the Minister of Justice and the Minister of Maori Affairs on early intervention and I was really impressed with the quality of that meeting. I went back to the Labour caucus and told it that we had to offer up something that we had to work with the Government on that issue. Early intervention is where we all agree the most good can be done if we are genuinely to do something about our prison population. What has the Government’s response been to that general offer? Nothing. We are still waiting. I have had a letter asking that we work together on Sale of Liquor Act issues knowing full well that it is a conscience issue but there we go. A genuine offer was put on the table to work with the Government collaboratively on something that really would work. 
The Prime Minister of New Zealand has hired a scientist to sit at his right hand to guide the Government on an evidence-based pathway. Yet the approach that the Government is adopting here is not evidence-based at all. I really support the hiring of a scientist to sit at the right-hand side of the Government’s highest decision-maker; I just think it is really important that he is listened to. He is saying that an evidence-based pathway is the way forward. We have heard the Government tout the UK system when the league table shows that 10 of the 11 private prisons in the UK fit within the bottom 25 percent of all the prisons in the UK. The facts speak for themselves. This is not a seriously good argument that National members are proposing. 
The ACT Party blew the cobwebs off arguments that I thought had been buried in the crypt alongside its founding member but even he could not help himself. He had to get to his feet to argue that competition and profit were the only way that we could get value for money the only way we could get results. Competition is great for consumers. It is fantastic for consumers. As a former Minister of Commerce I am well aware of the anti-competitive measures that many in the private sector take particularly in order to take public sector contracts and milk them for all they are worth as we have seen in the newspapers in the last few days. They want the benefits to accrue to themselves because they are profit-making businesses and they would rather not see the benefit go to the consumers. That is what competition was designed to preserve—benefit for the consumers. 
It is a question of whether the profit motive is the driver we want in a service that benefits from keeping its business full of people. It is absolutely counter-intuitive that we would want the profit motive driving our prison service of all things. That has been the problem overseas. The incentives have been utterly and completely perverse: keeping people in for longer punishing them for minor infractions while they are in jail keeping them there for longer and longer ensuring that the prisons have their fodder that the prisoners keep coming back because of the revolving-door syndrome. Private prisons need to keep seeing them return because that is where the profit lies. 
I do not feel that way about the not-for-profit sector. There is an enormous difference and I disagree entirely with the Minister of Maori Affairs on this issue. I see the real role for the so-called non-public in the not-for-profit sector where a lot of Maori organisations work where a lot of Pasifika agencies work and where agencies like the Salisbury Street Foundation have made a huge difference in terms of really turning round the lives of people and ensuring that habilitation and rehabilitation take place. I think this is where the Maori Party tragically was sold a pup by National. It offered it a slice of the action when in fact Maori could have a much more important role in reducing the prison population and reducing reoffending rates. The Salisbury Street Foundation as I have mentioned stands testament to the value that the not-for-profit sector adds to the justice system. 
This bill is not about that. It is actually about carving off a profit centre in the shape of people who have offended against the laws of the State and allowing not only the cost of their incarceration to be passed on to the taxpayer but the provision of profit to the private sector to be passed on to the taxpayer as well. That is what I object to. The Minister did not once answer the question on cost. We know that the private prison experiment that we had in this country once before was more costly than the public sector alternative. It was more costly and there is no question about that. Overseas the costs have been higher the rates of suicide have been higher the rates of escape have been higher and the damage done to prison guards has been higher. The price we pay those prison guards has been lower and the price the taxpayer pays has been higher. This bill is on a hiding to nothing. It is not something that we stand for and the Labour Party will be opposing it vigorously. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to be speaking on the third reading of the Corrections (Contract Management of Prisons) Amendment Bill. That is exactly what the bill is about: contracting out just the management of prisons. It is about innovation new ideas and great leadership that provides great outcomes. That is the sort of leadership that National is providing and that is the sort of leadership that we are getting under a new Minister of Corrections who is actually making a difference in corrections which is long overdue. 
I commend my Law and Order Committee colleagues the select committee staff and also the officials who did an outstanding job in meeting the many demands placed upon them during the progress of the bill. I am delighted that we are supporting this bill that it is coming to the end of its duration in Parliament and that it will very soon be an Act. 
Hon RICK BARKER (Labour) 
: 
 We have listened now to two National Party speakers and we are still waiting to hear cogent reasons for the contracting out of prison management and for the purpose of the Corrections (Contract Management of Prisons) Amendment Bill. We heard the previous speaker Sandra Goudie say this bill is about innovation. Well where is the innovation? One of the items that was raised by the Minister of Corrections in the Committee stage concerned an initiative to bring Maori issues within the prison. But that was not brought in by private prisons; that was brought in by a public sector prison in Hawke’s Bay. That was where the initiative started. It was not a private sector initiative at all. The Minister learnt a second thing when she got advice from her own Department of Corrections about going to Australia to look at private prisons. The department said there was nothing good nothing new or nothing worthwhile there when looking at this issue. 
The previous speaker also said we had seen innovations by this National Government and I say that is probably closer to the truth than anything else. The National Government came to power with a sort of pragmatic view and said to New Zealanders that everything they had been given under the previous administration they would get from National plus more. People were told they would also get tax cuts and all sorts of other wonderful things. In fact piece by piece we are seeing the true face of National. It is a classic right-wing agenda. The right believes in minimum Government. It believes in tax cuts. We have seen tax cuts under the National Government but people who do not earn over $40000 a year did not receive anything. The tax cuts that the Government brought in saw over a third of them go to the top 3 percent of income earners. 
Hon Tau Henare 
: That’s worn-out scaremongering. 
Hon RICK BARKER 
: It might be worn out but the Hon Tau Henare knows that it is absolutely true. The other aspect of the right-wing agenda is deregulation and we have seen that happen in amendments to the Resource Management Act. Another aspect of that agenda is contracting out. These are ideological positions whether or not they make good sense. 
The point about this decision is that if it is not ideological and there is evidence for it then let us examine the evidence. I say to the House and to the National Government that there is no evidence to suggest that privately managed prisons are better safer cheaper or more innovative than State-run prisons. There is no evidence of that whatsoever. In fact the evidence is entirely in the other direction. In the absence of any concrete evidence we are able to conclude without doubt that this decision is driven purely by ideology. It is part of National’s programme of privatisation over time. National has said it is not going to privatise some things in this term of Parliament but it has not said to the public that it is not going to privatise at all. 
In fact when we look around the world and we look at the advice from the United States we find there is a terrible legacy from privately run prisons. The list goes on and on. A country that is much closer than the United States to New Zealand in its structure its history and its background is Canada. Just 3 years ago Canada ended the privatisation experiment and returned all of its prisons to the public sector saying after 5 years the Government could find no appreciable benefit from privatisation. Canada is very similar to New Zealand and after 5 years it could find no appreciable benefit of privatisation. That is the Canadian experience. The United Kingdom another country with which we share a lot of similarities had a similar experience. The report of the National Audit Office of 2003 some 6 years ago stated that the performance of the prisons was mixed but it said almost all of the bottom-ranked prisons were privately managed. It stated that the worst-performing prisons in the United Kingdom were in the private sector. That is the evidence. Canada and Britain have shown that the privately run prisons were amongst the worst-performing prisons. 
In New Zealand we have our own experience of privately run prisons. What did we have with the Auckland Central Remand Prison? Well the first thing we have been told by the Government is that private prisons are more efficient. But being “more efficient” would mean that they are more cost-effective. Well the facts from the Minister’s own department show that the Auckland Central Remand Prison was more expensive than the public prisons. On every measure it was more expensive. So we will have higher costs to the taxpayer. The Minister said privately run prisons would do better with rehabilitation. Well if the basic costs are higher then obviously rehabilitation costs will be on top of that. And we all know there will have to be a profit on top of that again. 
But there is worse to come. The Law and Order Committee heard directly from people who were employed in the Auckland Central Remand Prison—they were staff who turned up to the hearings—who said that by talking to the select committee they had put their future employment at risk. This was evidence that they knew could put their future employment at risk. They were people— 
David Bennett 
: Rubbish! 
Hon RICK BARKER 
: The member says “Rubbish!” but that is what they said. Everybody agreed that this was the case and that going on record was putting their future employment at risk. There was no doubt about that. Despite the fact that they were putting their future employment at risk they made it very clear to the committee that statistics within the privately run prison were massaged. They did not want to get bad statistics and they were encouraged by their management not to have them because that would put the contract at risk. 
And here comes the rub: if we have a privately managed prison and the determination that it will be privately managed is by the say-so of the Chief Executive of the Department of Corrections then the chief executive has a vested interest in ensuring that the statistics for the prison are good. The management of that prison has a vested interest in ensuring the statistics for that prison are good. What the Government is happy for us to rely on is the belief that the accounting systems run by the privately run prison and the accounting systems run by the chief executive are correct and will tell us with absolutely deathly accurately what went on in that prison. Well I say that is not good enough. I say that is not good enough because they both have a vested interest in ensuring that the outcomes look good on paper. 
A lot of people put a great worth and store on auditors. I happen to be someone who thinks that audits have a limited use. People want to think audits are great should look at two fabulous world companies: WorldCom and Enron both of which had fantastic audit reports. Those companies sucked in billions of dollars into them only to crash overnight and disappear with not a scrap left. They both had fantastic audits. One of their auditors was Arthur Andersen a company that did extensive business here in New Zealand but which disappeared completely. Let us be clear that audits are no guarantee whatsoever that things are right particularly when the auditors are chosen by the organisations themselves. 
Now Parliament has its own auditor the Auditor-General because over time Parliament understood that departments that chose their own auditors gave Parliament figures that it could not entirely rely upon. So Parliament made the decision to get its own auditor: the Office of the Controller and Auditor-General. This House has asked for and been denied by the National Government the right of the Office of the Controller and Auditor-General to have complete and unfettered access to all of the information on this issue. Well we have been turned down by the Government. I ask the Government members what they have to hide. 
The Minister of Corrections says the Office of the Controller and Auditor-General will have full access to all the information. Well yes it will have; it will have sheets of paper and information supplied by the contractor and by the department. She says the Office of the Controller and Auditor-General will have access to the department’s staff. Yes it will have but that does not mean that the Office of the Controller and Auditor-General will have access to the staff of the privately run prison. It will not necessarily have that because those staff will be employees of a private company. The Office of the Controller and Auditor-General does not have automatic right of access to the employees of a private company. Labour wanted to change the law so that the Office of the Auditor-General would have direct access to those employees just as it has access to the staff of every Government department in New Zealand. If it wants to go through and audit for example Work and Income the Ministry of Social Development or Treasury not only can it look at the figures and interrogate the books but it can talk to the staff and get a feel for what is happening on the ground. The Government’s decision not to give the Office of the Controller and Auditor-General direct contact with the staff I think puts a veil between that office—Parliament’s auditor—and the contract prison. 
This brings me back to the point made by the Hon Lianne Dalziel. Parliament passes laws to give judges the power to incarcerate people and to deprive them of their liberty. The incarceration of those people is handled by the executive arm of Government via the department. If we as parliamentarians want to ensure that the powers that we have delegated to judges and to the Department of Corrections are handled correctly then the Office of the Controller and Auditor-General must have unfettered right of access to these institutions but the Government has denied Parliament that right. I think the Government is wrong. The Government has decided to push this legislation through for ideological reasons. 
DAVID CLENDON (Green) 
: 
 The Greens spoke very strongly in opposition to the Corrections (Contract Management of Prisons) Amendment Bill when it was first introduced. Our opposition to it has become if anything more adamant as we have observed and analysed the information the debate has revealed to date. 
We have heard much about innovation; the word has popped up regularly in a number of speeches. Indeed the commentary on the bill includes the statement: “Opening up prison management to contractors provides an opportunity for innovation and change in the way in which prisons in New Zealand are operated.” The word “innovation” caught my eye. We most often associate that word with ideas that are new and generally positive. It is often associated with some idea or proposal that is forward-thinking or even visionary. Sadly this bill reflects a mind-set that is as far from being truly innovative or visionary as one could reasonably imagine. 
There is most certainly an urgent need for change in our whole approach to prisons and imprisonment. Successive Governments have tried and it must be said failed to find solutions. The failure of those efforts is indicated by the reality that as a country we continue to have one of the highest rates of imprisonment per capita in the world and that rate continues to grow. The very dated mind-set behind this bill reflects the assumption that did so much harm in the 1980s and the 1990s which is that public sector delivery of services is wasteful and ineffective and that private provision is more effective more efficient and generally cheaper. The privatisation of the Public Service during that time left a very costly legacy that has still not been repaired and hard evidence for this case is simply not there as we have heard a lot tonight. 
Comments made earlier today to the Law and Order Committee painted a very graphic picture of a Department of Corrections that is under enormous stress and indeed stretched almost to breaking point. Despite spending millions of dollars each year locking up offenders our rate of recidivism remains untenably high with a strong correlation between rates of imprisonment and reoffending. The annual report of the Department of Corrections informed us that the number of serious assaults on one prisoner by another has risen by some 45 percent in the year 2008-09 compared with the previous year and that serious assaults on staff have risen by something close to 80 percent in the same time period. The introduction of this bill adds to the enormous stress that already exists within corrections and not least to the stress felt by prison officers. 
One thing on which I think we can all agree is that our prison system is broken. But passing the responsibility for the management of prisons to private contractors is not the mechanism that can or will fix it. A number of speakers have reflected on the fact that one of the most potent powers that may be exercised by the State in a liberal democracy is the power to deprive an individual of his or her liberty and freedom of movement and association. This power should be exercised exclusively by the State with a direct line of accountability to the public. Introducing private enterprise management for profit of people incarcerated makes no more sense than would the private provision of other elements of the justice system—the courts or the police—or indeed of the defence forces. 
The idea of private prisons might be marginally more palatable if there could be some reasonable expectation of economic or social benefit arising from such a radical departure from historical and indeed contemporary norms. Again the evidence is simply not there. The Corrections Association of New Zealand which represents something like 3000 prison guards made the following comment in its submission to the bill: “Contracting prison operation will only be cheaper if the terms and conditions of employment for employees are reduced. This will lead to considerable difficulties with recruitment and retention of staff. This will expose the Corrections Officers and the prisoners to considerable risk. Potentially these risks will fall back on the Department.” The association made the point that “small rural communities will be disadvantaged by less attractive terms and conditions and the provision of profits to what are likely to be overseas based contractors.” The association went on and expressed the very well-informed view that the bill if passed would inevitably lead to more dangerous prisons for staff and inmates alike. It voiced the very real concern that it is very inappropriate for anyone but an officer of the State to exercise extensive powers over prisoners including the use of force in certain situations and the right of search and seizure. 
There is a very legitimate role for the private sector generally to open up new markets expand business and generate profit and having recently come from the business sector I am very supportive of those activities. In this instance however the success of the business model of a private prison would be assured if more people were locked up for longer. So where is the incentive for a private operator to reduce inmate numbers to reduce recidivism and to pursue rehabilitation and the much more complex goals of a functioning corrections service? 
It is all too well known that Maori are disproportionately represented in prison musters. My colleague Metiria Turei in her first reading speech on this bill pointed to the 2007 report entitled  
Over-representation of Maori in the criminal justice system 
 in which analysing the data from apprehension through to prosecution conviction and finally sentencing confirmed that Maori are much more likely to be apprehended and more severely punished than non-Maori. The Maori focus units in prisons have begun to gain some traction. There have been some positive outcomes from that initiative. This bill however offers no mechanisms to improve the sorry state of the statistics for Maori. Grossly disproportionate numbers of young Maori are in jail but the bill does nothing to address this. There is no provision for access to kaumatua and no requirement to liaise with tangata whenua nor is there any obligation for the monitor to report on such matters. 
The prisons would operate through corporate structures that limit the liability and that distance the parent company from that liability. This would leave joint venture partners such as iwi carrying liability. A very useful and important submission was made by Professor Jane Kelsey from the school of law at Auckland University. She made the point already made tonight that the Auckland Central Remand Prison experience of privatisation delivered distorted figures and outcomes to the extent that it was a loss-leader for the Corrections Corporation of Australia to gain a foothold in the New Zealand prison service. It is clear that private contracts will focus on new prisons being built. They will have no interest in taking on a Victorian pile like Mount Eden Prison. They will leave the public sector to manage the older run-down prisons which will make comparisons between the two sectors wholly invalid. There is a distinct disconnect where contractors have access to official information but reports on performance indicators and monitors’ reports do not have to be released under the Official Information Act because of commercial confidentiality. Too much of what could occur in a private prison could be concealed under that guise. 
We know that the global recession means that it is harder for private prison companies like others to get finance and there are intense pressures to maximise short-term profit. If profits fail to meet expectations then there is pressure to renegotiate with the State which may have to carry the risk of private failure. What would be the Government’s position if a privately operated prison appeared to be getting into serious financial trouble? Could the State step aside and allow it to go broke? It is much more likely—in fact inevitable—that the public purse would once again be called upon to bail out private enterprise that has failed. 
We know that private prisons cut costs by reducing labour costs—as labour costs typically represent about 80 percent of overall running costs—through lower staffing levels and more electronic surveillance. Effectively our prisons would become electronic zoos with brutalising dehumanising effects on the inmates. The likelihood of their returning to those unfortunate places would be much increased. 
I think one thing we can all share is a common aspiration to— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the member but his time has expired. 
DAVID GARRETT (ACT) 
: 
 I am very pleased to rise in support of the Corrections (Contract Management of Prisons) Amendment Bill. The main reason I am so pleased is that we support anything that will benefit the justice system. I have listened very carefully to the debate both here in the House and on television and I have to say that I have heard nothing credible from members on the other side of the House or to my immediate right that would suggest that private prisons will not be an improvement. 
Data from the UK shows that privately run prisons are cheaper and more important that they deliver better outcomes. Closer to home there is plenty of evidence—it has almost become boring repeating it—from the time when Auckland Central Remand Prison was under private management to suggest that there are plenty of positives in such a system. Labour in its 9 years in power showed a great aversion to the private sector bordering on the paranoid. Its decision to re-annex Auckland Central Remand Prison was based not on results which were very encouraging but rather on its own ideology. I applaud Mr Hipkins for finally admitting that his stance at least was based on ideology. 
The decision to re-annex the Auckland Central Remand Prison cost $3 million in transition costs but the social cost was even bigger. The Auckland Central Remand Prison was run in a formal partnership with Iwi Whanui o Tamaki-makau-rau an advisory board representing six northern iwi. For the first time Maori were directly involved with the operation and management of the prison system or at least a part of it. We have heard ad infinitum today and tonight that over half of New Zealand’s prisoners are Maori. That is from a population of about 16 percent of New Zealanders. Many in Maoridom wanted and still want to take ownership of that problem and resolve it. Old intractable problems require new solutions. 
I applaud the Maori Party for having the courage to put up with the insults from members opposite for its decision to support a new direction. As I said during the second reading debate—and it has almost become a cliché—on all measures including suicides assaults on guards and prisoners and escapes Auckland Central Remand Prison fared much better when it was privately run. Those are not my words; they are those of the former Green MP Mr Nandor Tanczos. Yet he along with the Greens and Labour opposed it anyway. 
Let me be clear on this: Labour and the Greens opposed fewer suicides. They opposed fewer assaults they opposed fewer prison escapes— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I find the words that the member used about me just then offensive. I have never nor has any member here opposed fewer suicides which is what he just said. 
Mr DEPUTY SPEAKER 
: I thank the member. I accept that point of order. Making comments like that can bring the House into disorder. I ask the member to withdraw that comment and apologise. 
DAVID GARRETT 
: I withdraw and apologise. Since the last election and since this Parliament began the Greens have opposed every single initiative by this Government to get tough on crime and the causes of crime. Private prisons will be a reality by the end of this evening. For the record I ask the Greens again whether in 2 years’ time if the results in terms of recidivism or any other measure are 25 percent better than they are today they will still oppose private prisons. 
Kevin Hague 
: Are you seeking leave for another call for us? 
DAVID GARRETT 
: Oh no no. There was no answer; just a bit of smartness. That is to be expected. If one is a member of the Labour Party or the Greens blind ideology and looking after one’s union backers in Labour’s case is more important than results. It is more important even than people’s lives. 
Privatisation is not a right-wing conspiracy. Around the world it has become the norm. The World Bank noted recently: “Privatization is now so widespread that it is hard to find countries not using the approach. North Korea Cuba and perhaps Myanmar make up the shrunken universe of the resistant.” We can add the members opposite and the Corrections Association of New Zealand to that list. They think that the sky will fall in if the Government delegates to those who can do a better job. 
It has been very interesting to hear in numerous speeches from members tonight—dozens I think it would be fair to say—that they see it as an article of faith that the operation of prisons is and must be a function of the State. But no one has actually said where that comes from. I ask which volume of Marx that comes from. Where does it come from? No one has explained to me or to this House why that is an axiom. The simple answer is that it is not. There is no tablet in stone and there is nothing written by and handed down from the gods that says that the incarceration of prisoners convicted by the courts must be a function of the State. We heard Mr Barker I think talk about the army as another example of something that must be administered by the State. But the new member Mr Shearer is on record as saying that mercenary armies are in fact a good idea. So I wonder just where those members get that axiom from. 
I suppose that in 6 or 9 years’ time if Labour manages to get into power we will not have Kiwibank and KiwiRail in the election of 2021; we will have “KiwiJail” as a campaign by members opposite. They are suffering from a phobia and they need help. I have heard no good reasons from members on the other side to change my mind. 
Since being here I have visited Rimutaka Prison and Paremoremo prison which is now known as Auckland Prison. The staff there in my observation are doing their best. They are professionals; most of them would have nothing to fear if prisons were privately run. If people like Mr Hanlon and his union mates continue spouting the kind of allegations they made in the Law and Order Committee they would indeed have plenty to worry about. I will give members on the other side another lesson in law. Unsubstantiated allegations made with the protection of Parliament are not in fact evidence. I do not think that any lawyers are left over on that side of the Chamber; they have all gone home. But that is the case— 
Chris Hipkins 
: I raise a point of order Mr Chairperson. As you will be aware the member cannot make reference to the absence of other members from the Chamber. 
The CHAIRPERSON (Lindsay Tisch) 
: It was a generic point and this is just an interruption to the debate. The point the member makes is well made but the member speaking was not referring to individual members. 
DAVID GARRETT 
: This bill will shake things up and that is not before time. I think that probably the one thing that everyone across the Chamber can agree on is that the present system is not working. It is not working for white people and it certainly is not working for Maori. The Maori Party has expressed a strong interest in helping to revive the iwi - private sector partnership once again and again I applaud its courage for doing that. I hope it works; I really do. This Government unlike the previous one will focus on what works. 
The amusing irony for me is that our party according to members on the other side is supposed to be all about ideology. But in this case we are at one with National and the Maori Party in pursuing what works. I say again in conclusion that no one would try to argue that what we have now—75 or 80 percent recidivism after 5 years—is working so this measure has to be an improvement. Thank you. 
Hon Dr PITA SHARPLES (Associate Minister of Corrections) 
: 
 I will take just a short call in the third reading of the Corrections (Contract Management of Prisons) Amendment Bill; I want to clear up a couple of issues from my earlier speech. Many of us have spoken about innovation and the possibility of privatisation allowing for innovation. I made this point before. Mr Barker has spoken about the Maori focus units starting in Mangaroa Prison in Hastings. As I said earlier I had a role in that. In fact Peter Grant and I ended up in there making the final decisions about the form of that prison. It actually turned out to be not how we wanted it because the restrictions in being tied to the mainstream prison did not allow it to be free or to operate freely with its own rules custom and culture inside it. For example inmates were placed in the unit without even wanting to be there but just to fill it up because the main part of the prison was short of beds. Others were taken out of that focus unit after they had reformed and were put back into mainstream which was devastating for them in terms of what they had learnt and where they were travelling. The other one was case management. The whole idea of the focus unit was to put each inmate on a case management programme so that he could have an end goal leave with whanau out there to look after him and not return. Also the transfers that happened between prisons affected the unit. At the end of the day the recidivism rate was down only 7 percent; that drop should have been much more. 
That is why we are building this new Whare Oranga Ake. This is a State arm of the system but could quite clearly be a private prison as well. Maori who are talking about possibly taking over the contract of a full prison cannot do so at the moment under the State but they might be able to do it if privatisation was allowed. I have no problem with Maori doing that because at the moment things are getting worse. Over 50 percent of our prison population are Maori so why not give Maori a chance to see whether they can actually do a better job of reforming those in prison just as we are looking for them to do so in education and other areas? In health Whanau Ora is now coming up with Maori working amongst our own people. I think it is really good because nothing will change unless the Maori people themselves feel like someone is leading them and there is an opportunity for them to actually get out of the situation that they are in. 
It is all about positiveness and that is why I believe privatisation will bring innovation. One example arose when I went to Fulham Correctional Centre in Australia. I did not know that it had an Aboriginal group and a Maori group who did a welcome for us—a kind of powhiri. We learnt afterwards that those two groups were at war with each other in that prison. There was conflict between the Aboriginal group and the Maori group and the prison tried that welcome to bring them together. At the end of the powhiri they were shaking hands and giving hugs. I checked up and they have quite a bond going now. They were able to do that; the private situation that I am talking about allows innovation. I have noticed flexibility with Maori in Dom Karauria’s prison here in Auckland City. He allowed different elders to come in and do things whereas in some prisons we have taken elders in they have had to go through the machine which is quite humiliating because they are the crème de la crème of Maori society. They have been stopped in the middle of a speech not allowed to have the food that consummates the occasion and things like that whereas in Dom’s prison he was able to say to the whole prison that tea would be late that day because of such and such. So they have that kind of flexibility. 
New Zealand prisons are so interrelated that what happens in one carries over into another and so on. In prisons any little change of practice can cause a riot. For example one day prisoners may be able to have beards and then the next day they are not allowed beards and there is trouble; it is really important that the prisoners know where they are at. I believe that the flexibility allowed in private prisons is worth a go and also that the opportunity for Maori to get in there and have a go at running them themselves is also worth trying. Thank you. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I very much appreciated the sentiments of the Hon Dr Pita Sharples in his speech. I believe his speech highlighted one of the great advantages that the private management of prisons enables in terms of development and true great results. 
I want to talk about the decency agenda that one of the previous speakers from Labour asked me to speak more on. I read a quote from a Labour MP who spoke during the parliamentary debate on offender management in the UK. I will quote the UK director of prisons from Her Majesty’s Prison Service Phil Wheatley. He was asked: “What does decency in prisons mean to you?”. Phil Wheatley replied: “Fair and consistent treatment of prisoners—doing time is hard and it is not our job to make it any harder. Prisoners have to rely on staff intervention and cooperation so it is vital they are never unfairly treated or refused what they are entitled. Telling a prisoner you can’t help because you’re busy when actually you’re talking to your colleague about your holiday plans is not decent behaviour. Human treatment and delivering promised standards for providing prisoners with a reasonable quality of life are also part of the decency agenda as is treating prisoners within the law—no one should be punished outside the rules. Finally it means getting the basics right—providing clean properly equipped and maintained facilities and protecting prisoners from others and themselves.” 
He was asked further: “How has the decency agenda helped with suicide prevention which still remains high on the agenda?”. He said: “The Service has been doing a lot of work with Cambridge University and research has shown that if prisoners—many with mental health problems serious drug problems and many facing the possibility of long sentences—arrive at a good safe orderly prison with good regimes and good staff prisoner relationships it can reduce the distress experienced by prisoners which can lead to suicide or self-harm.” Finally he said: “There is a lot of work to be done but we are well placed to implement improvements.” He is acknowledging that there is room for improvement. 
I come back to the quote from Gerry Sutcliffe. He said that the first private prison opened in 1992 and there are now 11 such prisons operating in England and Wales holding about 10 percent of the prison population. The companies that provide those services have developed a strong track record of delivery and are driving forward the decency agenda as well as introducing innovation and increasing value for money in public sector prisons. So we see a combination of private and public working together to improve conditions for prisoners as well as introducing innovation which increases value for money in the public sector prisons—exactly what the Hon Pita Sharples was talking about. 
I have visited a number of prisons and every week a number of years ago I visited inmates in Block B of Paremoremo prison which is now Auckland prison. I have seen the quality of care that New Zealand prison staff offer. I was privileged last Friday to give awards to our prison staff in New Plymouth. They are doing a good job. This bill is about creating opportunity for private management to work together with the public to bring innovation and improvement in our prison service. I believe that this bill has great quality in it and has enabled us to move forward. I commend this bill to the House. Thank you. 
CARMEL SEPULONI (Labour) 
: 
 I need to point out a few ironies before I get started on the main part of my speech. The first irony that I really have to point out goes back to what the Associate Minister of Corrections Dr Pita Sharples was saying earlier with regard to some of his aspirations for Maori. I have to ask Dr Pita Sharples how those aspirations can possibly occur under the watch of the Minister of Corrections Judith Collins who in the past could not respect even the simple protocols that went with a simple powhiri. How therefore can she share in the aspirations that he has for Maori with regard to rehabilitation? She could not sit in a powhiri because she was told she needed to sit in the second row yet she has now had some sort of renaissance in her thinking and she can now share the aspirations that Dr Pita Sharples has for Maoridom? I find that very very difficult to believe. At some stage the fact that she truly does not share those aspirations will become uncovered and at that point in time it will be an ugly ugly sight. 
The second irony I have to mention is in regard to something that was raised in the debate on this bill. The irony is that at an earlier time Mr Young a member opposite discussed the fact that when Labour was in Government it had incarcerated such a high number of people. The argument prior to that was that Labour was not tough enough and it had not incarcerated enough people yet that member said in this Chamber that we incarcerated too many. We have heard on numerous occasions across this debate that the levels of incarceration have increased. 
Jonathan Young 
: I never said that. 
CARMEL SEPULONI 
: I ask that Mr Young checks the  
Hansard 
 for this debate; he will find that he did say that. 
The third irony—for there are so many—is in relation to the next bill we will be discussing which is the Corrections (Use of Court Cells) Amendment Bill. The Government is saying that private prisons will solve all problems have better rehabilitation make safer prisons and be less costly for New Zealand taxpayers yet the next bill we will be dealing with the Corrections (Use of Court Cells) Amendment Bill is basically legislating in anticipation of overcrowding in prisons. The Government is anticipating that prisons will not be able to cope with the sheer numbers who will be incarcerated therefore it needs to legislate with regard to the use of court cells for the overflow in numbers. I have to point out that there is an irony in that and it is something we cannot help but look at and think “Well what are they going on about?”. 
The fourth irony I wish to discuss before I get on to my main points is the irony that comes with some of the things the chief executive has said. How can we think that this legislation is a good idea when the chief executive of the Department of Corrections wrote to his workers in an email dated 8 June 2009 and said that at a time when the Government was struggling to cope with a global economic crisis and finances were tight his budget therefore did not allow extra money for wage increases. He then stressed the importance of an agreement on reasonable terms: “Failing this I will have no alternative but to recommend to the Government other approaches which will include the option of private management of some established prisons.” That sounds like a man who fundamentally does not support private prisons because they are better or safer; in fact by his making a threat like that in relation to private prisons he is reinforcing the fact that it is widely felt amongst corrections staff including himself that they are an undesirable option. Those are the things I wanted to point out before I got on to the main part of my speech. 
Labour members do not support the Corrections (Contract Management of Prisons) Amendment Bill. Labour members are of the view that the incarceration of citizens is a core Crown responsibility and as such should be under the direct control of the Crown through the Department of Corrections. 
David Garrett 
: Where does that come from? 
CARMEL SEPULONI 
: If Mr Garrett would listen I will tell him. Public prisons are morally and fiscally accountable to taxpayers whereas private prisons are accountable to their shareholders with a binding obligation to maximise profit. There is a risk that the pressure for a private company to show profit may lead to compromised service quality such as lower staff to inmate ratios fewer rehabilitative services a reduced range of services cuts in staff pay and conditions cuts in staff quality or all of the above. Those were things that were discussed by the corrections union and also by the prison officers who had worked in both the State-run prison and the privately run prison when Auckland Central Remand Prison was under private management. 
There is also the potential for abuse. When a profit-making company has the authority to restrict basic civil liberties profit motives may supersede the safety of the public staff and inmates. We have heard of a number of examples of that happening in private prisons in Australia America and the UK and we have also heard about some of the things that went on when the Auckland Central Remand Prison was under private management with regard to reporting and the fact that things were hidden to ensure that the management could still make the profit it was trying to get out of our Government at the time. 
We are also concerned that the passage of this bill will weaken the ability of members of Parliament the media and the general public to hold the private contractor to account in respect of corrections outcomes. At the present time members of Parliament can directly question the department and hold it accountable through the use of select committee inquiries the Official Information Act and the use of parliamentary written and oral questions. These avenues are not available in respect of a private company. The Auditor-General at present has unfettered access to Government departments and agencies and can inquire into any matter he or she feels is appropriate. It is our belief that under this legislation the Auditor-General’s power and ability to inquire directly into matters pertaining to the private sector contractor will be limited. The Office of the Controller and Auditor-General reported to the Law and Order Committee that under this bill it would not have the power to audit a private company and provide an opinion on the performance of that company. 
The lack of independence of the people employed to monitor privately managed prisons is also a concern. Those prison monitors will be employees of the Department of Corrections rather than have an independent status. We also note with concern that there is no compulsory provision to require 24 hour 7-day-a-week monitoring and the Labour members on the select committee expressed the concern that while there would be someone there from 9 to 5 who would be there to monitor what went on for the remainder of the day? 
We do not believe that a good explanation has been given for why there is a need for private management of prisons. In relation to costs and efficiency there is no evidence to suggest that the privatisation of prisons would be more cost-effective and efficient than the current Department of Corrections model. 
Finally we Labour members had serious concerns about the Government members using their majority on the select committee during the select committee process to block our access to Ministry of Justice officials. The ministry had input into the departmental report and we believed that the committee would have benefited from hearing the views and the insights of the ministry. We questioned the motive for not allowing the committee access to those officials and we were disappointed that this opportunity was denied when we were considering such a significant shift in our justice system. And more important constitutional issues are involved. The Government members used their majority vote to block Opposition members from making legitimate inquiries of a Government ministry that had specialist knowledge of the matters being considered. Just as members have a right to free speech we believe that members as select committee members must have the right of access to officials and information. We oppose this bill. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise to speak to the third reading of the Corrections (Contract Management of Prisons) Amendment Bill. Before I get going on that I point out that it is ironic that the speaker who has just resumed her seat Carmel Sepuloni complained about constitutional rights; she was outnumbered on the select committee so she was voted down. I take this opportunity to apologise to the officials. The member who just spoke basically insulted the officials who actually helped us tremendously. I would like to thank them for their time and their tremendous help. 
I take a little moment to quote my taxi driver who dropped me off at the airport very early on Tuesday morning. When I told her that we would be debating this bill she said “It’s about”—I do not think I am allowed to say the next word—“[bleep] time.” I have to agree with her sentiments. 
Apart from the obvious ideologically driven objections from members opposite one of the main concerns raised during the deliberations of the Law and Order Committee was the issue of whether the privately managed prisons will be as accountable as the publicly managed prisons. Well the answer that we had the advice that we had and the discussions we had said yes. It was just that members opposite refused to listen to that. The Office of the Auditor-General can still audit the Department of Corrections. The cost and performance of the privately run prisons will still come under the jurisdiction of the department. Members of the Law and Order Committee were told that this morning by the chief executive. 
I have mentioned in debate on earlier stages of this bill that we are not selling the corrections system; we want only to look at options for the private management of our prisons. If I can quote my wise taxi driver again we cannot do any worse than we have done before. The Department of Corrections has had a terrible report card from the Audit Office. Mr Barker has referred in debate on previous stages of the bill to the woeful performance of the department. This bill provides an alternative a choice in how we manage our prison population. Members opposite may not like choice but to members on this side of the House choice is essential. It is wonderful. New ideas are being injected into a public entity that lacks innovation not only in management but also in inmate rehabilitation. It can only be a good thing to provide better options for all concerned. Prisoners will hopefully have a better rehabilitation rate prison management will have better outcomes and the public will feel safer for it. 
One of the reasons why I feel quite strongly that that will happen with this bill is that it sets standards in all aspects including care of prisoners performance standards training for staff etc. These standards are to be no lower than those of the publicly run publicly managed prisons. That means that they will definitely be better than what we already have. Standards across the board will have to be better in privately managed prisons. 
In my humble opinion we should all aspire to achieve better outcomes for all New Zealanders. I have heard many members opposite speaking passionately about wanting better outcomes for prisoners but if we simply continue on the same path in the area of corrections we will not improve. The Department of Corrections has struggled to produce better outcomes for our prisoners and the repeat offending rate is bloated. That the Opposition keeps opposing this bill is simply hypocritical as the previous Government did not improve the lot of inmates and the public did not feel safer for the 9 years that Labour was in Government. We need to improve we need to innovate and we need to change for the better. This bill will provide that opportunity for the Department of Corrections. Hence I commend this bill to the House. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 That was another speech from a National member attacking the Opposition. Those members attack the people rather than the arguments because the arguments on our side of the House are quite defensible. But Government members can produce no evidence and no facts or figures. All they can do is to attack the people on this side of the House who are raising arguments that those members do not agree with. 
Melissa Lee said that privatisation is a new idea. It is a new idea to Melissa Lee. Well it dates back many centuries in fact. Let us go back to the 19th century practice of prison labour leasing. I am referring to a document put forward by the Howard League for Penal Reform. It is very useful. Basically it talks about the prison labour leasing that began in America in the 19th century. For a state fee prisoners were housed clothed and fed by private contractors in return for their labour. A history of injustice neglect brutality and high morbidity rates for the mainly black prison population was recorded and by the early 20th century those leases were gradually phased out as the privately contracted work was returned to the control of the state. The idea is hardly new. It is not new. This debate goes back centuries yet National members are saying that somehow they have had a grand new idea. Well if winding back the clock a couple of hundred years is a grand new idea for National I would hate to think what is coming next. 
I will talk about who may end up running these private prisons and what some of the risks involved in privatisation are because significant risks are involved. Private prison operators are encouraged to cut costs endanger the safety of their staff and endanger the safety of the public. There is no incentive for them to reduce recidivism. I will talk particularly about the GEO Group. For example my colleague Carmel Sepuloni raised earlier in the debate a case where the GEO Group placed a woman in a cell block with male inmates who raped her and beat her and she later took her own life. State authorities removed 125 inmates from a prison run by GEO Group—the people whom National wants to run New Zealand’s prisons—because of inadequate staff training and inadequate health care. Those running the prison were found to have served rotten food. They knowingly made false and misleading statements to state officials. They failed to complete criminal record checks on at least 100 prison guards. I repeat: they failed to do criminal record checks for 100 prison guards. They violated domestic and international laws on due process and humane treatment. These are the people whom the National Government holds up as the bright hope for improving our prison service. Well with a track record like that members on this side of the House do not want a bar of it. If that is what the Government thinks the future of our prison service in New Zealand is I think that is disgraceful. 
This is the wrong debate for us to be having in this House. I have sat here all night since we began this debate and not once have I heard anybody from any party on the other side of the House talk about anything that would reduce the number of people who end up in prison in the first place. Surely with New Zealand having the second-highest incarceration rate in the developed world that is something that the Government would want to talk about. Rather than talking about how it can make a profit from locking up more and more people perhaps it should talk about how to reduce the number of people who end up in prison in the first place. We have had nothing not a jot from the ACT Party or National on any of that. 
Fundamentally this matter is an ideological debate for those members. It is all about how they can make a profit out of the activities of the State. National is absolutely ideologically wedded to the idea of privatisation. The ACT Party the “Self-help Help Yourself Party” is completely and utterly off the planet when it comes to this type of thing. If those members can make a dollar out of it they are into it. If they can make a buck out of it then they are absolutely into it. But there is no evidence to suggest that privatisation will work. All the evidence goes the other way. All the academic research goes the other way. That is why we have heard none of it from Government members tonight. They simply cannot find any evidence. 
I am sure that one of the reasons they blocked the Law and Order Committee from having access to the Ministry of Justice officials is that those officials probably would have told the committee that there is no evidence to support what the Government wants to do. We know that the officials told the Minister of Corrections that there is no evidence to support what she was trying to do and that the evidence suggested in fact that it would probably have the opposite impact to what she was hoping. The select committee was not given the opportunity to hear that evidence. Melissa Lee boldly told us that that is called having a majority. She said that having a majority means that one blocks free speech and blocks the ability to look at the evidence to consider what may or may not work. That is what is being in Government is all about for National. It is all about ignoring the evidence. It is all about doing whatever the bumper sticker slogan says and doing whatever National’s private corporate mates want it to do without fronting up and producing a single shred of evidence that it will work. 
The Labour Party’s opposition to this bill is based primarily on two grounds. The first is philosophical: we do not believe that it is the role of the private sector to incarcerate people and to take away their liberty. We believe that if that is to happen then it is the role of the State. The second objection is simply based on the operation of this measure—how it will work. It will not work. It will not reduce recidivism. It will not save any money because we know that private prisons are more expensive than public prisons. The one example that we have had in New Zealand of a private prison was more expensive to run than a public prison. The National Government has produced no evidence to suggest that privatisation will work. Our objection to this bill is not based simply on principle; it is based on principle but that is not the only objection. 
Debate interrupted.