Hipkins Chris: Corrections (Contract Management of Prisons) Amendment Bill — In Committee Speaker Recalled In Committee Third Reading 
Text is incorporated into the Bound Volume 
Hipkins Chris: Corrections (Contract Management of Prisons) Amendment Bill — In Committee Speaker Recalled In Committee Third Reading 
[Sitting date: 24 November 2009. Volume:659;Page:8091. Text is incorporated into the Bound Volume.] 
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.