Corrections (Contract Management of Prisons) Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Corrections (Contract Management of Prisons) Amendment Bill — Second Reading 
[Sitting date: 17 November 2009. Volume:659;Page:7724. Text is incorporated into the Bound Volume.] 
Corrections (Contract Management of Prisons) Amendment Bill 
Second Reading 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I move  
That the Corrections (Contract Management of Prisons) Amendment Bill be now read a second time 
. The return of this bill to the House marks an important step towards implementing the Government’s policy to allow the contract management of New Zealand’s prisons on a case by case basis. The Government wants New Zealand to have a world-class corrections system. Allowing private companies to manage prisons will create opportunities to benefit from private sector initiative and expertise. In doing so we will encourage more innovation and we stand to achieve greater efficiencies and effectiveness in New Zealand’s corrections system. 
As this bill has now returned from the Law and Order Committee I take this opportunity to thank the select committee for its hard work in its consideration of the bill and of the public submissions it received. I especially thank the chair of the committee Sandra Goudie MP. I also acknowledge and thank those members of the public who took the time to make submissions to the select committee. The bill attracted submissions from a wide range of people and organisations and these were all taken into account during the committee’s deliberations. Many submissions acknowledged that the Department of Corrections is under enormous pressure. This has not changed. I recently announced that the prison population in New Zealand had reached its highest level ever. The department is fast reaching the point where the number of prisoners will exceed the number of beds available. Addressing this issue and improving the performance of the corrections system overall is one of the Government’s top priorities. 
Allowing for contract-managed prisons gives us an opportunity to create a corrections system that is modern effective and efficient. The Government is committed to achieving this in a way that is consistent with the principles of the Corrections Act 2004. These principles are to improve public safety and contribute to the maintenance of a just society. This must be done through the safe secure humane and effective containment of prisoners. This bill does not contravene any of these important principles. 
Under the provisions of the bill the chief executive of the Department of Corrections will remain responsible for all prisoners in New Zealand and accountable for what happens to them. This includes prisoners held in contract-managed prisons. As a result we will expect contract-managed prisons to comply with the same obligations and standards as the prisons directly managed by the department. Contract-managed 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. The bill also imposes contractual obligations on private prisons to comply with all relevant international obligations and standards. Failure to comply with the relevant New Zealand legislation or our international obligations would be a breach of contract and could result in its termination. 
The bill imposes further contractual obligations to specify the objectives and performance standards of each contract-managed prison. These include objectives and performance standards for the management of the prison as well as for the management and care of prisoners. The performance standards and requirements that we will expect will be no less than those we expect in our own prisons. The bill also addresses the concern that contract-managed prisons will attempt to increase profits by having fewer staff than a public prison. It will be a contractual requirement for each private prison to appoint and train sufficient suitable staff to enable them to carry out their statutory and contractual obligations. The bill requires every prison under contract management to provide rehabilitative and reintegrative programmes that will help prisoners address the causes of their offending and will assist their reintegration into society. 
In order to comply with these contractual obligations prison managers will be subject to comprehensive reporting requirements. These include regular reporting on staff training on incidents involving violence or self-harm and on the rehabilitation and reintegration programmes provided for prisoners. In addition prison contractors must report promptly all escapes and deaths in custody. Failure to comply with any of these requirements would be a breach of contract. 
The bill also contains a number of mechanisms to ensure that contractors are accountable and are complying with the terms of their contracts. Particularly important to ensure accountability and compliance will be the prison monitors who will regularly report to the chief executive. A prison monitor will be appointed to every contract-managed prison. The prison monitor will have free and unfettered access to all parts of a private prison. This includes access to all prisoners and staff. The primary purpose of prison monitors will be to oversee the contractors’ compliance the terms of the contract and the requirements of the law. Prison monitors will also be able to investigate any issue in a private prison at the behest of the chief executive or on their own initiative. 
I am pleased to report that following deliberations by the select committee the role of prison monitors has been expanded to enhance their functionality in two key respects. The chief executive will be able to appoint additional monitors to private prisons to assist the primary monitor. Additional monitors will be used in situations where increased surveillance may be required. For example additional monitors may be appointed to a prison to provide 24-hour monitoring or an extra monitor may simply be appointed to a particularly large prison. The chief executive will also be able to appoint specialist monitors for particular purposes. These monitors will investigate any matter related to a contract-managed prison at the request of the chief executive or on their own initiative. It is intended that their primary purpose will be to respond to specific issues raised by the monitors based in private prisons. This could include for example investigating criminal activity in prison. This will allow for a thorough investigation to be conducted while not interfering with the day-to-day role of the resident prison monitor. 
The select committee made other minor changes to the bill. It recognised the importance of providing prisoners with employment and skill development. The bill now requires specific reporting on the provision of employment and skill development to prisoners. The bill already has a requirement to report on the rehabilitative and reintegrative programmes provided for prisoners. However employment and skills development are also essential activities to help prisoners in their eventual reintegration into the community. It was agreed that these activities had to be recognised in their own right with separate reporting requirements. 
Additionally the bill has been amended to address the flow of information between staff at contract-managed prisons the Department of Corrections and other Government agencies. This amendment is to ensure that the current sharing of information on prisoners between the Department of Corrections and other Government agencies will continue notwithstanding that some prisoners will be in a contract-managed prison. This is because other Government agencies—such as the Police the Ministry of Social Development and the Department of Labour—often need this information in order to perform their functions and duties. 
The changes made by the select committee that I have just highlighted will provide even greater protection for prisoners and will increase the department’s ability to monitor a contractor’s performance and compliance. These changes will enhance the effectiveness and functionality of the bill. As a result this bill will allow the Government to reap the benefits of private sector innovation in prison management while providing adequate safeguards for the secure safe and humane custody of prisoners. As the Minister of Corrections I firmly believe that this bill will provide an effective statutory framework for the regulation and control of privately managed prisons in New Zealand. As such I am committed to its successful implementation. I commend this bill to the House for its second reading. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 Labour members will oppose the Corrections (Contract Management of Prisons) Amendment Bill and we will do so on two main platforms. One is a core principle that I will come to in a moment and the other is centred on the objective of this bill which could be characterised as an attempt to distance performance from accountability. 
An offer was made to the Law and Order Committee to have the idea—that is that private is better than public in the prison service—tested in an independent way by agencies and commercial enterprises that do not have an axe to grind or a vested interest. The Minister of Corrections Judith Collins to this day will not submit this proposal to independent scrutiny and at that point we have to ask ourselves why. I know that other members from the Labour side will deal with this matter in more detail so putting aside for a moment the notion that it is the role of the Crown as a core responsibility to incarcerate and therefore be responsible for incarcerating its citizenry there are core responsibilities within the Crown portfolio. I suspect that we are not yet—or at least I hope not—talking about privatising other services like the police. Of course we would not do that—I hope. I am sure we would not I hope have a debate in this House about privatising core services—for instance our military capacity. I hope that we will not; I pray that we will not. 
The incarceration the rehabilitation and the responsibility for incarcerating our citizenry is indeed I put to you Mr Assistant Speaker a core responsibility of the State. This Parliament sets the laws the courts interpret those laws and pass sentence and then it is handed back to the Crown through the Department of Corrections to incarcerate administer and punish—because that is part of prison and one is soft on crime in my view if one does not believe that—but also then to rehabilitate and hopefully return to our society folk who will not engage in the heinous crimes they did to get there in the first place. That in my view and I submit this to you Mr Assistant Speaker is a core responsibility of the State. 
Yet I could be wrong. The Minister could be wrong in promoting the privatisation of the prison service. I put to this Parliament that that argument could well be alleviated if that Minister would submit her ideas and her proposals to independent accountability to thorough analysis by those who do not have a vested interest in order to test the argument and the idea. There has been no evidence put to this Parliament or the Law and Order Committee from anybody that justifies the privatisation of prisons. Members should remember that the original proposition for this bill was the potential privatisation and management of future new yet-to-be-built prisons. But that does not appear in this bill and we know from an email sent I believe in June of this year that Barry Matthews—and the chief executive of the Department of Corrections will be held to account for his comments in the select committee when he appears in the financial review—sent a threatening email to staff saying that there was no money for a wage increase and that if they did not toe the line he would recommend the privatisation of the management of prisons. 
The only justification for privatisation that has been put up is one of cost. We have just heard flimflam from the Minister sounding high and mighty but I will say that the principal goals about rehabilitation about skills training and about providing facilities where the game is lifted and where prisoners and dangerous folk are secured from our community are all valid and principled aims. But there is no reason why those valid and principled aims could not be brought to bear on a department called the Department of Corrections. 
Much was made of the only historical example of privatisation that we have in this country which was when the Auckland Central Remand Prison was privatised. That is the only example we have and that was reversed by the then incoming Labour Government. That is the only example we have. The Minister trumpeted that she will have the ability to if you will penalise a private company for instance for escapes by taking the money out of their kick. All those objectives I have outlined and a practical measure like that could well be exercised by this Minister if she had a will to do it if she had a will to make her department accountable because we move this bill through its parliamentary stages in an environment where the Department of Corrections is in industrial terms at war with itself by taking its own department to the Employment Court to try to protect its own members from a Minister who describes broken bones of prison officers as “minor injuries”. 
But let us for a moment consider the only justification that the Minister has trumpeted in an environment of economic recession for going private—that is cost cutting. The thesis is that the private sector can incarcerate rehabilitate and provide skills at a cheaper rate of course than the public sector. The Minister said as much in an answer to me in volume 656 of the  
Hansard 
 when she said: “I am aware of information from my own department that in 2004-05 the last year the Auckland Central Remand Prison was privately run the cost was $57280 per prisoner whereas the equivalent in the public sector cost $61796 per prisoner.” Well that is interesting because I also have in front of me the document that her own department submitted and this is the only real justification put up for privatising prisons. It states that the costs from the same period 1 July 2004 to 30 June 2005 inclusive of property-related overheads were $57280 for the private provider and $50208 for the public provider the Department of Corrections. 
So I would like to know who is telling porkies because those figures raise the issue that the advice the Minister has from her own department as per the  
Hansard 
 does not match the advice that the select committee got from her own department which up until today we have not been able to talk about. So who is telling the truth because cost is the only justification that this Minister has used? Apparently one cannot rehabilitate prisoners under the Department of Corrections. Apparently one cannot take money out of Barry Matthews’ budget if there is an escape. Well I say they can if they have the political will. They can use all those motivational tactics such that they are with the Crown department running the show. 
I say this: there are nefarious motives of some and prison officers came before the select committee to advise us of what had occurred under the GEO Group. Prison officers who worked at the Auckland Central Remand Prison both when privately and publicly managed submitted to the committee that decisions were made on a day-to-day basis that were intended to protect the reputation of GEO and also to ensure that performance bonuses provided under the contract were obtained by GEO. They talked about prison officers who had erred but were asked to go quietly and resign rather than being disciplined. I think that is not on. 
The issue before this House is one I believe that is simple. This bill is about distancing as I said at the start the performance of a Minister—or lack of it—from his or her accountability as Minister. This is a Minister who cannot be accountable to this Parliament for the actions of her own department and we have had a litany of prison incidents through the latest Burton assault and through the attack with razor blades which she trumpeted she had got out of our prisons. Yet what happened in the Paremoremo maximum security prison quite recently? This is a Minister who cannot get accountability out of her own department but washes her hands of it and says that it is an operational matter. When we bring evidence that a prison officer’s bones were broken the Minister says it is an operational matter or a minor injury. So what will happen when the Auditor-General cannot penetrate a private company or when the Ombudsman cannot penetrate a private company? Not only will it be an operational matter but journalists and those who want to exercise an Official Information Act request or hold a select committee inquiry will have to go and dig even deeper and they will not be able to penetrate the private provider. The Minister will be able to say not only that it is operational but that it is a private matter and tell them to go away. This will be a sad day for the House and one that I believe this Minister will regret. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to speak to the Corrections (Contract Management of Prisons) Amendment Bill which I see as an opportunity for innovation and new ideas. The previous Labour Government had that opportunity but trampled all over it and got rid of it as soon as it could. I thank my colleagues on the Law and Order Committee who did an outstanding job and I also acknowledge David Garrett from ACT who made a sensible contribution. Opposition members had plenty of time to understand how a private contract for the management of a prison might operate but their ideology prevents them from even considering it. There are not any principles involved; this is about ideology and about safeguarding the stronghold of unions. But unions by their very nature cripple innovation and new ideas. That is the ideology of the Opposition. But this Government believes that this bill will pave the way for innovation in a safe and effective way in terms of the management of the incarceration of offenders. 
It is crucial that we actually deliver the very best Department of Corrections service for New Zealand. To do that we should not limit our choices; we should have alternative ways of doing things so we have some way of measuring the performance of each one. In order to have a world-class corrections system we need that exposure to world-class innovation and expertise. We can get that by allowing private companies to provide those custodial services and create the opportunity to benefit from private sector initiatives and know-how. It is quite clear that the Auckland remand prison started that innovation when it had the opportunity before Labour squashed it in 2004. It was the first prison to have Maori involvement in its management and our understanding is that it was highly successful yet it was trampled over by the previous Government. It was not seen as something that was important. One of the most appealing aspects of private prison management will be the ability to build performance incentives and penalties into the contract but public safety is one of the top priorities. 
I see that the Opposition has been going on about the core principle of the Crown being responsible for the incarceration of criminals and that it should not contract out that responsibility. But the Crown contracts out its responsibility in a range of fields. The only one that I can think of is that it sets the rules by which we can drive a car but we do not expect the car to be driven for us. 
Carmel Sepuloni 
: That’s ridiculous! 
SANDRA GOUDIE 
: Well I could not think of another analogy quickly enough but that is pretty much it. Why should this be the only area of core responsibility that it should not be able to contract out? 
This bill is about new ideas and independent benchmarks but of course the Opposition is bereft of any of those. It is also about leadership and leadership makes that difference. Private prison managers will raise standards across the whole of the corrections sector. At least we in National are willing to provide the opportunity for that to happen whereas the Opposition is not open even to considering that as an option and that is a real shame. How can we move forward unless we have some innovation and new ideas? We are all for that. 
The bill which is about prison management contracts will set out a number of requirements the sorts of requirements we discussed at length in the select committee: objective and performance standards no lower than those of publicly run prisons staff training coordination of services and processes with publicly run prisons maintenance of insurance to indemnify the Crown avoidance of conflicts of interest provision of rehabilitation and reintegration programmes and dispute resolution and termination provisions. Of course there is an opportunity here for private prisons to do a far better job than prisons that are managed by the Crown. 
Hon Lianne Dalziel 
: Than they did last time? 
SANDRA GOUDIE 
: They did that last time. 
Hon Lianne Dalziel 
: No they didn’t. Look at the facts. 
SANDRA GOUDIE 
: Well I think they did. This is a bone of contention. Perhaps under the previous Government they were not allowed to have that opportunity which is no surprise. Why are we not surprised? Opposition members talk also about the fact that there is no accountability. Well actually there is but they want it to go far beyond the reasonable inquiries of the actual contract management of the prison and into the financial position of the company that might have the contract which is far beyond the contract itself. Once again that is the whole issue of micromanaging nanny State ideology which is a hallmark of the Opposition is it not? 
National is absolutely delighted to progress the Corrections (Contract Management of Prisons) Amendment Bill. I heartily support the exceptional leadership of the Minister of Corrections Judith Collins and commend the National Government for bringing this bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Article 3 of the Universal Declaration of Human Rights states that everyone has the right to life liberty and security of person. I have just gone through the Universal Declaration of Human Rights and I cannot find the right to drive a car. But the member Sandra Goudie has just sat down after saying to this House that she could not find a comparison other than that we set the rules about how people can drive a car and where they can drive a car but that does not mean that we have to drive the car for everyone. That was her response to our statement from this side of the House that the right to liberty is a fundamental human right and that only the State has the circumstances where it can deprive individuals of their liberty. That is something that sits only within the role of the State and I am firmly of the view that it is wrong to generate private profit from the deprivation of liberty. Yet that member thinks that driving a car is a comparison to undermining one of the basic tenets of our New Zealand democracy. I am quite appalled. 
What that member is challenging us to do is to set aside matters of principle. Never mind the fact that National members are driven by an ideology which is that public is bad and private is good no matter what. In response I ask members which sector caused the greatest global meltdown in the financial markets. Was it the public sector or the private sector? 
Hon Members 
: Private sector. 
Hon LIANNE DALZIEL 
: It was the private sector. I think we are agreed on that. But members on that side of the House have this mantra: if it is public it is bad; if it is private it is good. The legislation that we are debating here in this House is ideological but that member has challenged members on this side of the House not to deal with the bill on philosophical grounds. 
Moving away from the right to liberty being fundamental and the role of the State in terms of the deprivation of liberty let us look at the costs. I think that member has not read her own report possibly because this particular piece of information came from the Department of Corrections. But is it to be found within the body of the report back from the Law and Order Committee as part of the general report back? No it is in the Labour minority report. 
Let us look at the information about costs. The Auckland Central Remand Prison our one experience of the privatised model was under private management from 1 July 2004 to 30 June 2005. When we look at operating costs only we see that they were $35700 per prisoner and it cost $57280 per prisoner if we include property-related overheads. Let us look at remand prisoners held in the public prisons during exactly that same period 1 July 2004 to 30 June 2005. Operating costs per prisoner were $32000 as compared with $35700 under private management and when we include property-related overheads we see that the cost was $50208 compared with $57280. The rest of the country did better than the Auckland Central Remand Prison. 
Sandra Goudie 
: Try comparing apples with apples. 
Hon LIANNE DALZIEL 
: That member says that we are not really comparing apples with apples because the Auckland Central Remand Prison had extra costs—it was Auckland-based and there were probably other pressures on in Auckland. So let us look at the Auckland Central Remand Prison under public management from 1 July 2005 to 30 June 2006. Costs have of course gone up because it is a year later. Let us see what the figures look like. Operating costs per prisoner were $33900 compared with $35700 under private management. When we include property-related overheads it was $55853 compared with $57280 under private management. So the Government’s proposition fails from first base. 
The evidence from the one example where we had the private management of a public prison shows that it was more expensive to privatise the management of the prison than it was to run it publicly. 
Hon Darren Hughes 
: Why are we doing this? 
Hon LIANNE DALZIEL 
: I have no idea. It is purely ideological from the Government’s position. It simply believes that it has to give those people who want to be involved in the privatisation of a core public function access to what essentially is the money that would be put into our public system anyway. There is no value to be offered to the New Zealand public in return for the opening up of prison management. 
I know that the Government likes to present this move as competition as opposed to privatisation but it is clearly the privatisation of a core State function and I do not think that the public will see it in any other way shape or form. Of course the Prime Minister was on record when he was the Leader of the Opposition as saying that there would be no privatisation in National’s first term in office. So goodness knows what it has on its table for next time— 
Hon Darren Hughes 
: There won’t be a next time. 
Hon LIANNE DALZIEL 
:—but I suspect it will all come out during the election campaign. There will not be a next time because the public will know exactly what National means by the word “competition”. They know that that will simply be code for privatisation. 
There is another point that the member has not focused on at all and that is the question raised by my colleague—the separation of accountability from performance. We have very strict measures in place to ensure that there is proper accountability for the Department of Corrections to this place to Parliament. We have the select committee that gives oversight to the functions of the Department of Corrections. We have the Official Information Act. We have the use of parliamentary written and oral questions. We have the Auditor-General who at this stage has unfettered access to Government departments and to agencies to inquire into any matter where he or she feels it is appropriate to do so. Then of course we have the role of the Ombudsman which is a very specific role as it relates to prisons. What happens when the management function is privatised? All of these checks and balances go out the window. 
Sandra Goudie 
: Ha ha! 
Hon LIANNE DALZIEL 
: The chair of the select committee is laughing. She thinks that is very funny. I do not think it is very funny because I think one of the reasons why the Government wants to create this arm’s-length mechanism is to ensure that it does not have accountability for one of our most important public roles. 
I alert the House to the fact that when we come to the Committee stage my colleague the Hon Rick Barker intends to put forward three amendments. The first will re-instigate the role of the Ombudsman. It will give the Ombudsman complete and unrestricted access to any contracted prison and to prisoners prison records and prison staff to ensure that it can carry out the duties and responsibilities of the Ombudsman’s office in a similar manner as if the contracted prison was a prison run by the Department of Corrections. He will also propose that the Office of the Auditor-General have exactly the same rights in terms of complete and unrestricted access to all aspects of a contracted prison. 
The third amendment that the Hon Rick Barker will put forward is to ensure that there is no contract for the running of a prison under the Act for more than 3 years and certainly no automatic right or expectation of renewal. That is because we want to send a very strong message to those who wish to think about going down this track again: we will do what we did previously. It is not cost-effective to privatise this function. Setting aside all of the principled arguments that we would put to this House Labour will overturn the privatisation agenda of this Government after the next election. Therefore there is no point in any private business going down the pathway of taking advantage of any of these measures. With this amendment we will ensure that at the end of the contract period that contract will not be renewed and indeed we will not be in a position to see any future privatisation agenda take hold in this country. 
I think that the Government is being quite dishonest in terms of the lack of oversight and also in its lack of transparency in terms of the actual costs of the experience that we have had. We could use many overseas examples of private prisons where the costs are higher the rate of suicides is higher the rate of escapes is higher and the cost-benefit as well simply does not stack up. I think on every level this proposition fails and Labour will not be supporting the passage of this bill. 
METIRIA TUREI (Co-Leader—Green) 
: 
 The Green Party remains absolutely opposed to this legislation. It is not evidence-based. It is ideological it is dangerous to the community to staff and to prisoners and it will increase costs to the public purse. 
First I thank all of those brave souls who came to the Law and Order Committee to discuss with the committee their experiences of working within prisons and with prisoners. I pay particular regard to Pat McGill from the Napier Pilot City Trust who with his many years of service to his community talked of the importance of a community taking responsibility for its members developing an inclusive culture that respects all people and seeking non-violent solutions to issues of crime and poverty. 
I acknowledge the Corrections Association of New Zealand for its contribution from front-line staff in its submission to the committee. The association rightfully referred the committee to the many examples of private prison companies overseas that have reduced staff conditions and placed their staff in increasingly dangerous circumstances. Indeed the officials themselves reported that there were more escapes from the private prison in New Zealand than from prisons in the public sector. The Corrections Association talked about how the experience in New Zealand and overseas shows that private prison guards are paid less and have reduced conditions of employment and submitted that there is nothing in this legislation to protect current staff and their jobs and certainly no obligation on the part of the private prison to continue with their collective agreement. The association also raised very serious fears about the impact on staff of a combination of less experienced officers double-bunking and longer lock-up periods for prisoners all of which compound the serious and very real dangers to staff. 
I also thank the staff who had worked in the private prison in Auckland but who came to the select committee despite the risk to their potential future employment. They talked about how decisions were made by GEO Group management to protect the GEO Group’s reputation—this is the lived experience of staff in the private prison—and to ensure that performance bonuses were paid. That experience included the practice of staff not being disciplined but being encouraged to resign so that performance bonuses would continue to be paid. The staff said that emphasis on ensuring compliance with the contract meant there was an incentive not to find drugs in the prison as opposed to the practice in the public sector where there is a genuine wish to find drugs if they are present. Indeed the staff raised concerns about inadequate drug testing under GEO Group management so as to comply with the contract and retain the performance bonus. These are classic examples of that private company in managing the private prison massaging the compliance so that it could continue to make money off the public purse and thereby putting staff prisoners and the public at large at greater risk of harm. 
A similar situation also applied to self-harm incidents where under the GEO Group staff were encouraged to avoid reporting those incidents in order to protect their performance bonuses and to avoid penalties being imposed through the contract. Basic protocol was disregarded such as having prisoners escorted to the visiting areas by guards who were related to them. One guard was later allowed to resign and not prosecuted for breaching that protocol so that performance bonuses would continue to be paid from the public purse to the private company. 
Submitters were concerned that because prison officers worked in a high-risk environment it was vital that officers were of a high calibre but they said that under the GEO Group casual inexperienced staff were often employed in the private prison in Auckland thereby exposing officers to dangerous situations. Australian staff who did not relate well to Maori or Pacific Island prisoners were brought over to work in the private prison and those staff were paid better than their New Zealand counterparts and took jobs from New Zealand corrections officers because the GEO Group paid Department of Corrections staff significantly less than those brought over from Australia. 
This is the practical daily lived experience and it reflects the research around private prisons. The US Department of Justice report  
Emerging Issues on Privatized Prisons 
 clearly shows that the privatisation models simply mimic the public sector. The promises to provide more than 20 percent of savings did not eventuate under private management and the modest savings that were made came as a result of staff reductions and other labour-related costs. Another report from Australia “Privatisation and New South Wales Prisons: Value for Money and Neo-liberal Regulation” again shows that privatisation of prisons there did not result in value for money or in a significant reduction in costs. In fact the paper shows that the rhetoric of cost-effectiveness undermines the alternative criteria such as safety educational outcomes or reduced reoffending. 
Of course we can see all that reflected in the practice of the GEO Group in the Auckland remand prison because by reducing those other criteria for safety like detecting for drugs and following basic protocols the company could maintain its performance bonuses and do a good job of trying to suck up public money. So we know that in a private prison conditions worsen for staff and money is made for the private company through its failing to provide adequate wages and conditions and its failing to report drug and violent incidents. 
National and its cronies however will continue with the fallacy that private prisons are cheaper. It is a fallacy; we know for a fact that it is not true. The officials to the Law and Order Committee told us it was untrue when they provided us with the figures that colleagues from Labour have been discussing in this debate. 
Jane Kelsey came to the committee and provided a very interesting economic analysis particularly about the economic issues facing private ventures into public services. That submission put a spotlight on the fallacy of the National Government—and the Maori Party if it feels it is supporting this bill. Her analysis clearly showed that having private companies running prisons is more costly to the public purse in a variety of ways. The global recession for example means that it is harder for private prison companies to get finance and there is an intense pressure on those companies to maximise short-term profits. If profits do not meet expectations then there are pressures to renegotiate the contract with the State. The State then potentially has to carry the risk of the private company’s failure; the legislation before us does not constrain the length of a private contract so that is a financial risk that the State could carry for many years to come. In addition as it happened with the private prison here in New Zealand the then Labour Government had to wait out the contract before returning the prison to public management because of the cost of closing it down earlier. That is a cost borne by the public—public money is used to prop up other businesses or private companies particularly international companies. 
This bill shuts out the public from knowledge of the commercial interests in the dealings of the private company even though it is public money that is being used to feed that private company. Reports of the monitors are not made public. The Official Information Act can be thwarted by using commercial sensitivity provisions. There is no accountability or at least accountability to the shareholders of the company and no accountability to the public whose safety is at heart here. There are a number of other issues that no doubt we will canvass during the Committee stage of the bill. 
Finally National and the Maori Party are trying to argue that this bill will be good for Maori business or Maori iwi because Maori will be able to get into the business of prisons. Those parties are wrong. Private prisons operate through corporate structures that limit their liability and that puts joint ventures with iwi very much at financial risk. Not only is it a bad deal for Maori economically but it is grossly unethical for Maori to make a profit from the incarceration of Maori in a legal system that has been demonstrably proven to be biased. We urge the Maori Party to oppose any profiteering from racism. Profiteering from racism will never be OK. We urge the Maori Party to oppose this legislation. Prison is the harshest penalty that our community imposes on its citizens. The use of that extraordinary power must remain in the hands of the State which is accountable only to the community and not to international private profiteering companies. Thank you. 
DAVID GARRETT (ACT) 
: 
 I start by saying that last Friday I had the opportunity to visit the maximum security section at what is now known as Auckland prison but used to be known as “Pare Max”. One could not say I had the pleasure of doing so because as Mr Cosgrove and others have said no one in their right mind would really want to go and live in C Block as it is now. I had several impressions of the place aside from the obvious. One of them was of how professional the staff were. They were not the inhumane brutes whom some have portrayed prison staff to be. They were clearly compassionate and professional—some might say too compassionate. I had good talks with several of them. They were not the opponents of private prisons that Mr Cosgrove talks to—Mr Hanlon and his mates get intimidated supposedly by someone speaking the obvious—but just ordinary guys. 
Hon Clayton Cosgrove 
: You threatened him. 
DAVID GARRETT 
: Oh yeah I threatened him. Hanlon was threatened because I mentioned the obvious fact having sat there in the Law and Order Committee and heard the evidence that Ms Turei just gave us that Mr Hanlon and his mates would not get a job in the private prison. 
Hon Clayton Cosgrove 
: You threatened his colleagues. 
DAVID GARRETT 
: I ask Mr Cosgrove whether that big tall joker was scared of me. I had a chance to talk to the ordinary prison officers up there—half a dozen of them men and women—and they were great people. I was very very impressed with what I saw. So I wonder why there is a feeling of such threat about the idea of a private prison. 
I walked into the Chamber towards the end of Ms Turei’s speech and I wondered whether she and I had been in the same select committee room because some of what she said simply parroted what those prison officers who were obviously union goons were there to say. Without any substantiation at all they accused a private prison operator of falsifying records. I will go through it again: shredding documents sacking people so they could not face disciplinary tribunals etc. Well in another life I was a lawyer and I say that in order to substantiate those charges—those very very serious charges—one would need to have evidence. We have not seen any of that except in the sacred protection of this House or in a select committee room. So I am very sceptical about that. I wonder why the union is so frightened of having competition in prison management. Ms Turei and the Labour Party members simply ignore the facts. 
Mr Tanzcos who used to sit over there once said in this House I am told that even though he accepted that on every measure—whether it be suicide violence on officers violence on offenders or whatever else it might be—when the Auckland Central Remand Prison was run privately it did better than the public prisons he was still opposed to it. That is still the “criminal apologist” attitude over there: those members are opposed to prisons being run privately. Just as the sky will fall in tomorrow because of global warming or climate change or whatever it is called now they say private equals bad. It does not matter what the evidence is; they say private equals bad. That is just not so. 
The Maori Party to my left has come in for a bit of stick from Ms Turei and I imagine from Mr Cosgrove as well about its support for the idea of privately run prisons. Well in my view that is a courageous move on the part of the Maori Party members. They have said—and I will be honest; I doubt whether they are right—that iwi can run prisons better than they are being run and that they can turn round the sorry statistics that show that 14 percent of our population is 60 percent or something of our prisoners. The Maori Party has said that iwi-run groups can do that better. I say we should give them a go. If they can do it better who can complain? I ask Mr Cosgrove whether he is frightened of iwi groups tendering successfully for a private prison and getting good outcomes. Is he scared of that? 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. Firstly I am not scared. Secondly I seek leave to table a document in which Mr Garth McVicar chief executive of the Sensible Sentencing Trust and Mr Garrett’s mentor opposes what Mr Garrett is supporting today. 
The ASSISTANT SPEAKER (Eric Roy) 
: I am going to put the leave but I say members do know that it is discourteous to break up a speech. [ 
Interruption 
] I am telling the member that I will put the leave. [ 
Interruption 
] The member should not speak to the Chair in that manner. I will put the leave. Members ought to be aware that leave should be put at the end of a speech. Leave is sought to table a document. Is there anyone opposed to that course of action? There is not. 
Document by leave laid on the Table of the House. 
DAVID GARRETT 
: I would be quite happy for Mr Cosgrove to table anything from Mr McVicar who by the way is not my mentor or my sponsor. I am not here as a member of the Sensible Sentencing Trust as Mr Cosgrove has sneeringly observed from time to time. I am here as a member of the ACT Party and as a proud member of the ACT Party. 
But I do not subscribe to the kind of nonsense that Mr Tanczos said: that even if we have fewer suicides less violence fewer attacks and literacy classes that do much better than those in public prisons we should still oppose privately run prisons. That is idiocy—utter idiocy. So I commend the Maori Party and I really hope that iwi management will work. Overseas evidence suggests that it is unlikely to work but I hope that it has something to offer. 
In any event I do not see what is so bad and so scary about prisons being open to private competition especially when the very little evidence we have of what happened here is overwhelmingly positive. There is a weird fixation on the fact that no one should possibly make money from incarceration. Well I just do not get it. I just do not get it. If an organisation can meet the same standards as public prisons which privately managed prisons will have to meet and if that organisation can achieve better results than the public prisons which hopefully it can then who cares if someone makes some money? Who cares? I do not. I do not and our party does not. 
We take pleasure in supporting the Corrections (Contract Management of Prisons) Amendment Bill. It might not work; let us see. But we will certainly be voting for it and following its outcome with interest. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou katoa e te Whare kua hui mai i tenei po ki te wananga i tenei pire. The Corrections (Contract Management of Prisons) Amendment Bill starts with a very basic purpose: to amend the Corrections Act to allow for the competitive tendering of prison management. 
Different parties across the House will come to this debate with a variety of priorities that they seek for the bill to address. For the Maori Party we cannot ignore the reality that at this time we have record prison inmate numbers about half of whom claim to be Maori and we have an exceptionally high recidivism rate. No New Zealander can rest easy with the fact that about 50 percent of the people in jail come from 14 percent of the population and certainly the Maori Party does not rest easy with that fact. We also know that the State system is far from properly addressing the matter of the rehabilitation of Maori. We say that consultation with the Treaty partner must be a priority in developing an effective approach towards addressing the disproportionately high imprisonment levels of the indigenous people of this country. We would expect therefore that with regard to this bill as with any legislation relating to prisons it would be a priority to consider the difference that will be made for tangata whenua as a result of this particular bill. 
Yet there appears to be a silence in the provisions of the bill for Maori. I understand that in the course of the select committee process a number of the submitters were concerned that the bill does not require the chief executive to engage specifically with Maori in tendering for the management of prisons. They were also concerned that the bill does not require the successful contractor to involve Maori in decisions about the management and treatment of Maori offenders. It is therefore surprising that the Department of Corrections did not think it necessary to consult Te Puni Kokiri in responding to the committee’s report. At the first reading of the bill Te Puni Kokiri recommended that there be explicit and measurable performance objectives and standards relating to the rehabilitation of and a reduction in recidivism by Maori inmates. It saw that as being a key element by which accountability could be achieved so much so that it should be legislated for and regularly reported on. We recommend that such consultation takes place as a priority. Secondly we noted the response from the department with regard to the consultation with Maori: that the chief executive will consult with iwi and other Maori entities—and here is the catch—as appropriate. We say that this is unacceptable. Leaving consultation up to judgment as to whether it is appropriate is too tenuous a position to address a situation of such alarming proportions. 
We note the advice from the Maori Council that Maori should be given the opportunity to manage the prisons because State control has failed. Therefore we align our views very much with those Mr Garrett just provided in his speech. I place on the record of the House that the Maori Council has stated that the Auckland Central Remand Prison experience clearly demonstrated that the Maori management style delivered in that setting was appropriate for all ethnic groups. There is the positive. It should be remembered that after 150 years of prisons in New Zealand the Auckland Central Remand Prison was the first prison to employ a Maori general manager—namely Dom Karauria. Under his leadership the six iwi—Ngati Whatua o Orakei Te Kawerau-a-Maki Ngai Tai ki Tamaki Tribal Trust Ngati Paoa Ngati Te Ata and Te Waiohua—were the mana whenua tribes that signed a formal memorandum of partnership with the Department of Corrections with regard to the establishment and support of the Auckland Central Remand Prison. 
Before the Auckland example in March 1999 a Northland iwi Ngati Hine talked with the Corrections Corporation of Australia regarding a proposed site at Ngawha near Kaikohe. Their proposal was a joint venture to participate in the administration of a prison. The Australian corporation would run the prison for 5 years and then Ngati Hine would take over its management. Unfortunately however Labour scuttled the proposal. 
Our conclusion is that there is certainly a willingness among the people to be engaged in the running of prisons; the Auckland Central Remand Prison experience is a model for showing that prisons can be run and managed and Maori treated and rehabilitated in a way that is at long last effective for Maori. The standard set by the Auckland Central Remand Prison was about improving performance in service provision cultural safety community consultation and attitude right across all levels of management. We believe that the experience of best practice in the Auckland Central Remand Prison model is an important investment in success and at a minimum we recommend that the successful contractor must involve Maori in decisions about the management and treatment of Maori offenders. 
The overrepresentation of Maori in the New Zealand prison system has been of such longstanding concern that we want to see specific requirements written into the legislation to ensure that there are specific legislated provisions for Maori. We have three broad questions that we do not as yet have answers for. Firstly of course we want to know whether private management of prisons will be effective in addressing and reducing Maori offending. We ask how different it will be from State management and whether it will be profit-driven. Secondly we want to be assured that Maori management of the prisons will be effective. We know from the experience at the Auckland Central Remand Prison that we can be confident in the results but we ask how different it will be able to be from State management. We ask whether iwi will require profit to be derived from the activity. These are some of the questions that we put to the House tonight. Finally something else is required: whare whakaoranga or rehabilitation centres which will be consistent with the restorative philosophy and a kaupapa Maori approach. That is the question we ask. Can those facilities be available in these sorts of models? 
My colleague Dr Sharples has often talked with great enthusiasm of a proposal he is advancing as the Associate Minister of Corrections: a Whare Oranga Ake—a house of renaissance if you like. Such a centre would offer prisoners who are determined to make changes in their lives a pathway to reform. It will expect them to confront their offending to deal with the causes and to prepare for a life outside prison with courses in literacy and numeracy and a programme in trade or vocational skills. Part of the expectation is that support groups will help those prisoners make the transition and will monitor their progress. The broader goal will be repatriating prisoners back to society and to their whanau where appropriate placing emphasis on the restoration of healing to their victims and their victims’ families. 
So often in the House we address the entrenched problems: the pathway to offending and the difficulties that families find themselves in. Dr Sharples gives us confidence that there are other options. So too does Ngati Hine and the experience that those at the Auckland Central Remand Prison left for us to consider. We are serious about the need for the recognition of Te Tiriti o Waitangi in this bill and for specific legislative requirement to provide kaupapa Maori - based programmes for Maori prisoners. We want to ensure that there are measures to provide for and measure the rehabilitation of Maori and the reduction of Maori recidivism and we want to ensure that the chief executive will engage specifically with Maori in tendering for the management of prisons and will have a commitment to involve Maori in decisions about the management and treatment of Maori offenders. In the hope that the commitment of Dr Sharples will be respected with regard to all of the matters that I place before the House we will be supporting this bill at its second reading. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am very pleased to stand and speak in support of the second reading of the Corrections (Contract Management of Prisons) Amendment Bill. We have seen some very positive steps forward in making this country safer for all New Zealanders through this first year of the National-led Government. It certainly needed to take those steps because despite protestations to the contrary the previous Government oversaw the emergence of some extremely large social problems the greatest of which was the deterioration of the sense of safety that New Zealanders felt. Second only to the economy is the issue of law and order. It is not good enough to say that it is a 21st century problem. It is our problem in our country and we in this House are charged with the responsibility to address it. 
Although we grapple with difficult issues they can and must be redressed. Ineffectuality is essentially driven by indecision. Under the previous Government we saw services stretched thin in the corrections system by increasing community-based sentencing without sufficient Government support behind those services. When cracks were found particularly in our probation service those cracks were largely caused by the fact that services were asked to do too much with too little. The centre issue was the increasing demand upon our Department of Corrections and our prison facilities. Our capacity and capability failed to address those issues. The bill addresses the issues of both capacity and capability. Sadly we need to increase our capacity for prisons. That is an indictment on any society yet it is a reality. Such an ongoing increase severely impacts our ability to increase capacity. The bill addresses some aspects of the need to increase our capacity by making the management of prisons a contestable item in the Budget. It also brings in extra expertise beyond our own capacity but that is not the bill’s paramount reason. 
The bill is not just about cost effectiveness; more important it is about increasing capability. It is about making New Zealand safer and our society a better one. The intention of this amendment bill is to open up the prison service to innovation and improvement to make it even more effective and efficient and yes to grind down the costs of one of the most expensive aspects of Government. Let me ask members opposite why if what we have is so good are things also so bad in our society? Obviously we need to be open to change and we need to be open to innovation. With all those who work very hard and diligently in the service we also need to be open to new ways in which we can increase our capability. We must keep New Zealanders safe from criminals but we must also see fewer people committing crime and we must effectively rehabilitate those who do. On 21 September we had 8509 prisoners in our corrections facilities. Our record plainly tells us we need to lift our level in all three areas. If what we have is so good why do we face this indictment on our society? 
The contract management of prisons—something that the Opposition is extremely ideologically opposed to—is proving in many other jurisdictions around the world not only to be effective but also to bring excellence in the running of prison facilities to provide opportunity for innovation and change and to improve what we do why we do it and how we do it. Every person who enters a New Zealand prison will leave that prison and come back into society. We have a very high rate of incarceration. We have an extremely high rate of recidivism. We have problems and this bill enables different expertise—different ideas from different jurisdictions and from New Zealand of which my colleague from the Maori Party has spoken—to come in and create a climate of change in how we do things. We respect our corrections service but let us all be open to innovation and change. We need to find more socially effective solutions but we also need to find more financially effective solutions. 
I am very confident that this bill offers the New Zealand public a road forward that will bring positive change and improvement and with that safer streets and safer homes. Thank you. 
CARMEL SEPULONI (Labour) 
: 
 I am very happy to stand and speak in opposition to the Corrections (Contract Management of Prisons) Amendment Bill and many of the speeches we have heard this evening highlight the reason why. When I look across the room I cannot believe there are people who would support this bill. The previous speaker Mr Jonathan Young went on about the fact that when National came into Government there was such a high level of incarceration. That is a huge contradiction when we know that a big part of the platform that the National Party stood on to win last year’s election was that apparently we were not locking up enough people. Yet today that member is saying that we had high levels of incarceration and we were locking up far too many offenders. This is the type of thing that shows the flip-flop nature of that Government. 
There are a few things I want to touch on with regard to what other people have spoken about tonight. One comment that I found quite offensive was made by the ACT member David Garrett and concerned one of the submissions made by the prison union the Corrections Association of New Zealand. He talked about the fact that the union representatives came to the committee and talked about this that and the other and he referred to them as union goons. Personally I find that comment offensive. As far as I am concerned the only goon in the room when they were presenting their submission was that member himself. 
That same member—that same goon—also went on about the fact that there was no evidence as to why private prisons would not work. I sat on the Law and Order Committee with my learned colleagues Clayton Cosgrove and Rick Barker and we heard much evidence to support our line that private prisons did not work the one time we ran that proposition in New Zealand. They have not worked overseas either. I found it difficult to listen to the ACT member go on about the fact that there has been no evidence that private prisons do not work. 
Hon Clayton Cosgrove 
: Where is the goon? 
CARMEL SEPULONI 
: I do not know where the goon is. He went on about the fact that they are safer cheaper and better and that we had no grounds for opposing what they were putting forward to us. Apart from the evidence that came from GEO Group the Australians who want to gain entry into our country to run our prisons and gain the profits from it I think every other submission basically proved the fact that it would not be cheaper safer and better for New Zealand. 
There are a couple of points I want to touch on that have not been brought up so far. One of them concerns the length of the contracts that this Government will be looking at when it does privatise prisons and when it lets GEO Group or maybe other companies run these prisons. The issue that came up during the select committee was that there was no time limit on the length of these contracts. Basically from what we could see how long the contract would run for would be at the discretion of the Minister. That is a real concern because if the Minister of Corrections ties us into a 25-year or 35-year contract and it does not work then it will cost New Zealand taxpayers a lot of money to buy our way out of a contract that is not working and is failing in our country. That is a real issue. 
It is important to mention that one of our members Mr Rick Barker put forward a Supplementary Order Paper on the issue proposing that we cannot be tied into a contract for more than 3 years so that the contract has to be looked at and we can decide to opt out. That is important because if it is not working we need to have that choice. 
Another issue that came up—apart from the obvious and it is the one thing I have not mentioned yet—is that incarceration is a core function of the State. 
Sandra Goudie 
: Here we go! Nanny State! 
CARMEL SEPULONI 
: The chairperson of the Law and Order Committee says “Here we go!”. She may not realise it—and ordinary New Zealanders will—but incarceration is a core function of the State. When something goes wrong with our prisons we need to be able to turn round and hold our Government accountable. Unfortunately with the private management of our prisons which this Government is proposing we will not be able to do that. In many ways possibly it will work for this Government because then it gets to shift the blame and take no responsibility for any of the mistakes that undoubtedly will be made under its rule as Government. It will not have to take responsibility; it cannot be held accountable. But that is a very real issue and it is something that we have been pushing from the start. 
Labour’s minority report brought up the issue of the select committee process and this is another point I wish to cover this evening because it has not yet been discussed: “Labour members have serious concerns about the Government members using their majority on this committee to block our access to Ministry of Justice officials. The Ministry of Justice had input into the departmental report and we believe that the committee would have benefited from hearing the views and insight of the Ministry. We question the motive for not allowing the committee access to these officials and we are disappointed that this opportunity has been denied when we are considering such a significant shift in our justice system.” 
There was absolutely no reason to deny us access to those officials. At the end of the day National had the numbers. All we wanted was to make sure that some independent scrutiny was going on and that we could ask the questions we needed to ask. But instead the Government side of the House used its numbers to block us from being able to do that. 
More important—to mention another point carrying on from that—there are constitutional issues in respect of this matter. Government members as I have said 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 rights to free speech we believe that select committee members must have rights of access to officials and information. What this shows is that the bill we have before us is already flawed because of the process that was followed during the select committee proceedings and because of the fact that Government members used their numbers to block us from being able to access the information that we needed in order to be able to make accurate decisions. That is a huge problem that arose from the Government side of the House blocking us with its majority. 
One thing that came up earlier and I do want to touch on this concerned the Maori Party member who was talking about the fact that Maori should have a right to manage prisons as well and that perhaps that would be a good thing. One of my colleagues Mr Kelvin Davis wrote a column on this issue and I think he made a really important point. He made the point that as a Maori he did not want to see his whanau being worth more to Maori being locked up inside than they would be outside. That is the issue that he had. We are not saying Maori should be the only ones not allowed to manage prisons; we are saying no one should be allowed to privately manage prisons. This is going back to the fact that this is a core function of the State and it is not something that should be so easily handed over to the private sector to take control of when we should be able to hold our Government to account. It should be that our Government is responsible for anything that goes on in those prisons not the private sector. 
Hon Members 
: Why? 
CARMEL SEPULONI 
: Members on that side of the House are asking why and I will touch on a couple of examples before I end this speech. Even the members on the select committee were not listening when the submissions were made. 
One submission came through that basically told the whole story. I think this story was told by 30 prison officers. They talked about what happened when they were working in— 
Hon Members 
: Union officials. 
CARMEL SEPULONI 
: —not union officials; these were prison officers—a private prison and the difference between that and working in a prison that was run by the State. They talked about the cover-ups that went on and about the lack of reporting on issues because of the fact that these private companies wanted to be able to claim the bonuses and everything else that was available to them. They talked about all of the flaws that existed. These stories came from people who had worked on both sides—in privately run prisons and State-run prisons. Members on that side of the House asked about the evidence. The evidence is all in the submissions. The only submission that those members were willing to listen to was the one that came from the Australian company that wants to run our prisons in New Zealand. We are opposed to this bill and we will not be supporting it. We are opposed to private prisons. Thank you. 
MELISSA LEE (National) 
: 
 After hearing that speech all I can do is echo some of the thoughts from this side of the House. What is the fear on the Opposition side of the House? Fear of change is irrational. All I can say is that because Labour has so much fear of change perhaps it will continue to languish in the bottom 2 percent. Is that right? Two percent? Well that rating will continue. I start with that point. Members opposite should remember that a new broom sweeps clean. 
If we listened to members opposite we would think that privatisation is what we are doing. We are talking about private management of prisons. We are not actually selling the prisons or the prison services—just the management of prisons. Members should just read the title of the bill—it is the Corrections (Contract Management of Prisons) Amendment Bill. The purpose of the bill is to provide opportunity for innovation and change—I know that might be scary for the Opposition—through independent prison service providers to ensure effective and efficient provision of prison services and to enable the Government to look for cost savings in the overall delivery of prisons. These are three purposes of this bill. 
Public safety is the top priority of the corrections system. We owe it to the public to provide the best practice possible and the best options to improve the safe and effective management of offenders. In different bills being debated in this House many have spoken—and I too spoke about this earlier today—about the need for New Zealand to align itself to the international best practice to make sure that we compete with the rest of the world on the same footing. 
I believe that the corrections system must also have a world-class standard. I am not talking about providing inmates with world-class hotel accommodation. I am talking about providing world-class innovation and expertise in order to deliver the very best corrections service for New Zealand. To do that we need to be exposed to what is happening around the world. We need to allow competition in the form of bids in order to provide the best possible outcome for our corrections service and the aim of this bill will in the end determine whether a local or an international bidder provides the service. 
Personally I want effective and safe prisons where inmates achieve better outcomes than they do now. During the select committee process—where we debated the issues quite robustly as one can imagine—one of the key points I kept coming back to was that the prison management contracts would demand objectives and performance standards that are no lower than for publicly run prisons. There will have to have better outcomes. Otherwise what would be the point? 
The other point that appeals to me is that when the private management contract of Auckland Central Remand Prison ended in 2005 many of the benefits and improvements of the management were retained by the prison services when they took back the management of the prison. They retained the improvements that had been made. 
The other point I would like to make is in relation to the very high number of Maori inmates in our prisons. Contract management of prisons and private prison services are as has been proven by past experience more open to direct Maori involvement and this hands a potential opportunity to Maori inmates to achieve better outcomes. Perhaps given the opportunity they may achieve the rehabilitation and reintegration process they have so missed out on. 
My colleague Sandra Goudie said earlier that Labour killed the Auckland Central Remand Prison private management deal. The Iwi Whanui o Tamaki-makau-rau publicly criticised the Labour Government’s decision to return it to public management: “Auckland Central Remand Prison is quite rightly regarded as the most innovative effective and culturally safe prison in New Zealand history.” That comment was made by the chair of Iwi Whanui o Tamaki-makau-rau Te Warena Taua in 2003. 
In 2003 Mr Taua also said: “We strongly believe that removing the ACRP management contract and preventing any further like it represents the biggest step backwards in terms of prison management particularly in the areas of inmate management and rehabilitation.” This bill provides that opportunity. What are we scared of? Let us give them a chance. I commend this bill to the House. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Let us be very clear about what the Corrections (Contract Management of Prisons) Amendment Bill is all about. This bill is about an ideological position taken by the National Government that the private sector is better at everything and that the Government should be cut back. If there is one thing we have learnt about the National Government since the election it is that it will privatise something if it cannot cut it and it will contract it out if it cannot privatise it. So if National cannot cut it it will privatise it and if it cannot privatise it it will contract it out. This is an ideologically driven bill. It is part of National’s overall commitment to privatisation. National denied it before the election but since the election it is becoming more and more apparent that this is exactly the same National Party as was in Government in the 1990s which wrecked the electricity system the railways and everything else. That is exactly what it wants to do with prisons as well. 
As Clayton Cosgrove pointed out the Labour Party has two principal objections to this bill. We object in principle to the idea that the incarceration of prisoners should be a profit-making venture but also perhaps more important we object to this bill on accountability grounds. It is absolutely fundamental that the people who are locking up prisoners should be accountable to Parliament. They should be accountable through the Ombudsman the Auditor-General and the Minister of Corrections and the Minister should be accountable. 
We can see what will happen if this bill goes through. Unfortunately it looks like it will because the National Party will use its significant numbers in the House to ram it through. We can imagine what will happen when there are the first escapes or the first riots in a prison. I know what John Key’s position will be. He will be relaxed about it because John Key is relaxed about pretty much everything. Would it not be nice to have a Prime Minister who took the job seriously? I do not think that will happen under this Government so we have to get used to the fact that he will be relaxed about it whatever happens. The Minister will stand up in the House and say that it is not actually a matter for her; it is a matter for the private prison operator. I can already hear her saying that dripping with venom as she will be. Her saying that is one of the principle reasons why the Labour Party is absolutely opposed to this bill. 
However my colleague Rick Barker has put up three Supplementary Order Papers that make good sense if this bill is to be forced through by National. The first reinstates the role of the Ombudsman. I think that is incredibly important because the Ombudsman is the public’s watchdog. Giving the Ombudsman the role in a private prison that he or she would have in a public prison is critically important. The second of Rick Barker’s Supplementary Order Papers reinstates the role of the Auditor-General; that is important for the same reasons as reinstating the Ombudsman. The third of Rick Barker’s Supplementary Order Papers which we will support prohibits the Government entering into a contract for more than 3 years or into one that guarantees rights of renewal. That is absolutely critical. 
This bill is not supported on this side of the House. We know from previous experience that it does not work; in fact it will be more expensive. More taxpayer money will go into the incarceration of prisoners if the prisons are managed by the private sector. We know that because of the advice that was presented by the Department of Corrections. It says that the Auckland Central Remand Prison under private management from 1 July 2004 to 30 June 2005 had an all-inclusive cost of $57280 per prisoner. During that same period of time remand prisoners held in public prisons cost $50208 each to hold. So the public sector was significantly cheaper per prisoner over the same period of time. How did the Auckland Central Remand Prison compare after it was brought back under public management? It was still cheaper than it was under private management at a cost of $55853 per prisoner per year. It does not make sense. It will not be cheaper; it will be more expensive. This is another way for the National Government to channel the money of hard-working taxpayers into the private sector. 
Hon Clayton Cosgrove 
: And overseas! 
CHRIS HIPKINS 
: And to the overseas private sector because it is very unlikely that any New Zealand firms will do this work. This money will go from hard-working taxpayers to Australian American or Canadian corporate companies. It will go out of New Zealand. It will not do anything to reduce offending or to make our communities safer. Anyone listening to National ACT and the Maori Party would think that the private management of prisons will somehow miraculously make everyone much safer. It will not make any difference; if anything it could make the situation significantly worse. 
The debate about the privatisation and contract management of prisons is the wrong debate to be having. We should be talking about how we reduce the number of people who end up in prison in the first place. 
Paul Quinn 
: What are your credentials? 
CHRIS HIPKINS 
: I tell Mr Quinn that I—as opposed to him—actually managed to get elected in the Hutt Valley where we host the biggest prison in the country. The people of the Hutt Valley sent the carpetbagger from Wellington City well on his way. They did not want a bar of Paul Quinn. I will not listen to a word that Paul Quinn says on the private management of Rimutaka Prison. 
I tell him another thing. When we surveyed the constituents of Rimutaka and asked them what they thought about the contract management of Rimutaka Prison 67 percent were opposed to it. Those are the people Mr Quinn fraudulently purports to represent. The people of the Hutt Valley do not want Rimutaka Prison to be put into private management which is exactly what this bill would allow. It would allow Mr Quinn’s colleague Judith Collins to hock off the management of Rimutaka Prison to the private sector—to Australian American and Canadian firms—and to transfer the money of hard-working Kiwi taxpayers to offshore corporates rather than putting that money into the rehabilitation of prisoners and into crime prevention. 
That is what we should be worried about. The debate should be about how we can prevent people going to prison in the first place. We would not need more prisons if we did that. We will not do that by for example cutting the resources that are provided to the Police as National is doing. We rely on the police to help us keep our communities safe and to prevent offending. We would not do the things National is doing such as cutting police cars. That is a critical part of it. We should be focused on how we prevent offending and how we can keep our communities safe not how we make more money for the private sector out of the incarceration of prisoners. 
I come back to the point I raised at the beginning which my colleague Clayton Cosgrove raised about accountability. It is not at all surprising that the Government wants to shirk responsibility considering the long list of prison escapes assaults and deaths that have occurred on Judith Collins’ watch as the Minister of Corrections. That is one of the reasons why National wants to shirk responsibility by pushing it off to the private sector: so the Minister can stand up in the House and say that she does not know anything about it as it is a matter to raise with the private sector operator. 
The other concern I have is that when a profit-making company has the authority to restrict the basic civil liberties of ordinary Kiwis it leaves the system open to abuse. Profit motives could supersede the safety of the public of staff and of inmates. I think we should all be very concerned about that. There will be no incentive for private companies to report any failings at their prisons because they would be less likely to be awarded contracts or have them renewed. It will not lead to the innovation and the raising of standards that people talk about. In fact it will do the opposite. It will lead to prisons covering up mistakes so that they can have their contracts renewed. It will lead to them cutting corners so that their Australian American and Canadian owners can make more profits. This bill will not make New Zealanders any safer; it will boost the profits of the private sector. It is an ideological bill based on National’s fundamental view that the private sector has the best people to do it. We do not agree with that. We think this is a role for the State. 
Dr CAM CALDER (National) 
: 
 It is a privilege to stand and speak on the Corrections (Contract Management of Prisons) Amendment Bill. I thank the Hon George Hawkins for the very wise words he said to me here just a few minutes ago. 
This bill is yet another example of John Key’s principled pragmatic inclusive National-led Government keeping our promises. This Government recognises that law and order and concerns about personal security are uppermost in the minds of New Zealanders. We are addressing their concerns in many areas and at a number of levels. 
Paul Quinn 
: George said that? 
Dr CAM CALDER 
: No George did not say that but this is what we are doing. We are facing up to the myriad of challenges. I contrast this with the late unlamented lackadaisical Labour administration an administration where year after year an original thought was as rare as a burst of ribaldry at a vicarage garden party. It was an administration whose approach to any pressing problem or challenge was to dole out dollops of dross from a donkey dray of dogma—a tired terminally fatigued administration that became a loquacious lobbyist for lassitude languor and inaction. In stark contrast to that administration this Government is committed to finding solutions. 
I wish at this stage to acknowledge the excellent work done by many men and women in the corrections service. We believe however that this bill will encourage and enhance the exposure of our corrections system to world-class innovation and expertise. That is crucial if we are to deliver the very best corrections services for New Zealand. Encouraging best practice and the safe and effective delivery of correctional services would be facilitated under private prison management by the ability to build performance incentives and penalties into contracts. I commend this bill to the House. 
A party vote was called for on the question  
That the amendments recommended by the Law and Order Committee by majority 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. 
Question agreed to. 
A party vote was called for on the question  
That the Corrections (Contract Management of Prisons) Amendment Bill be now read a second time. 
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. 
Bill read a second time.