Barker Rick: Corrections (Contract Management of Prisons) Amendment Bill — In Committee Speaker Recalled In Committee Third Reading 
Text is incorporated into the Bound Volume 
Barker Rick: Corrections (Contract Management of Prisons) Amendment Bill — In Committee Speaker Recalled In Committee Third Reading 
[Sitting date: 24 November 2009. Volume:659;Page:8132. Text is incorporated into the Bound Volume.] 
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.