Corrections (Contract Management of Prisons) Amendment Bill

Seldom does this House get bills before it that are completely ideologically driven. The Corrections (Contract Management of Prisons) Amendment Bill is one of those rare bills. It is completely ideologically driven. There are no good reasons for supporting this bill; in fact, all of the evidence is to the contrary.

The right wing has as its philosophy cutting taxes, privatising, contracting out, and deregulation. This Government is displaying all of the characteristics of an extreme right-wing view. This bill is one of those displays, as it is about contracting out. The Law and Order Committee heard, in submissions on the bill, that the annual cost per prisoner to the public of operating the Auckland Central Remand Prison as a private prison was $33,900, but the cost when the State ran it was $32,000. As privately running it meant an increase in cost, the committee was left wondering over and over again why we would do so. We heard no good reason other than, simply, ideology. When we look around the world at experiences in the United States, Canada, and Britain, we see that all of the evidence shows that private prisons do not work.

The second very important point is that we are considering contracting out one of the most powerful and fundamental rights that this Parliament takes upon itself, which is to incarcerate its citizens. The executive arm of Government does not do that. The judiciary does not do it as of right. This Parliament sets the laws, this Parliament gives the judiciary the power to put people in prison and deprive them of their liberty, and this Parliament elects an executive to administer the prisons that undertake that work. It is not the executive that delegates power from the Minister of Corrections to the Chief Executive of the Department of Corrections; it is this Parliament.

This matter brings us to several of the amendments that the Labour Opposition is moving. We have put forward three Supplementary Order Papers that would ensure that Parliament has direct scrutiny of the operation of prisons. The Government has put forward this bill on a “trust us, we know what we’re doing” basis. It is saying that the chief executive of the Department of Corrections, under the observation of the department’s own auditors, will supply us with sufficient, good information. Well, I do not accept that, at all. This Parliament has an Officer of Parliament, in the form of the Controller and Auditor-General, because it does not have complete faith in the audits that executives may choose to take. Some people think that once there has been an audit, that is it, all is done. But several names show the failures of auditors: Enron, WorldCom, and Arthur Andersen LLP. All of those firms were thoroughly audited, yet collapsed and crashed spectacularly. The paperwork was perfect. That shows that independent scrutiny is important.

One of the amendments we are moving, Supplementary Order Paper 88, will give the Office of the Controller and Auditor-General the authority to go into prisons and ask directly for information. The select committee considered this matter and received advice that the existing powers are sufficient for the Office of the Controller and Auditor-General, but Labour’s view is that the powers still leave the office at arms length, with no direct ability to investigate for itself. One has to ask why this is. The answer is simple: the Department of Corrections, driven by the ideology of the current Government, wants to contract out prisons. If it does so, it will, inevitably, contract them out to foreign companies from Australia, the United States, Britain—you name it. How this export of New Zealand dollars will be good for New Zealand, I do not know. The Government has not explained this yet, but no doubt the Minister of Corrections, Judith Collins, will tell us how the export of profits from our prisons is good for New Zealand. I can see no logical argument that would demonstrate that.

The second thing is that these will be privately run institutions. Companies that run them under contract will not be subject to the scrutiny of the select committee and will not be subject to the direct scrutiny of this Parliament. We will give them the power to hold people in prison and deprive them of their liberty, and we are expected to believe that we can trust them to do everything well. Well, I do not believe that, because the committee heard from submitters that figures had been massaged. Staff who were on the job in private prisons testified to the committee that they massaged figures to suit their employers—that is what they wanted—and to suit the administration of the day. I simply do not trust this Government with these matters. I believe very strongly that the Opposition and Parliament should have the ability to scrutinise these activities. That is why Labour is moving an amendment to ensure that the Office of the Controller and Auditor-General can on its own initiative, if it so chooses, go into private prisons, interview staff, and go through all the details itself, rather than relying on the advice of the Department of Corrections or its auditors.

We also believe, as shown by our Supplementary Order Paper 87, that this amendment should apply to the Ombudsman, as well. The argument has been put that the Ombudsman can get access to this information, but, again, it can do so only indirectly; it cannot get it directly, on its own motion. We believe that that is a weakness.

The third amendment put forward by the Labour Opposition, Supplementary Order Paper 86, will restrict the length of contracts. We are very mindful that we are dealing with public money. This is not the money of the Department of Corrections and it is not the money of the Minister; it is taxpayers’ money. The Opposition is very concerned to ensure that the money put into these contracts is well spent. We do not want to bind future Parliaments by having prison contracts that run for 12, 20, or 25 years. We believe that the next Government that comes in, in 3 years’ time, must be able to examine such contracts to see whether they suit that particular Government. The contracts are hardly likely to suit it, because the department’s own figures show that, on every measure, contracted prisons are more expensive to run than publicly run prisons. The American experience shows that they are more expensive and run worse than those run directly by the State. The Canadians experienced this and got rid of private prisons because they were poor performers. The British got rid of them also because they were poor performers. They do not work.

If this Parliament gives power to the judiciary to deprive people of their liberty, and gives power to the executive to hold people in our prisons, then, as a fundamental principle, it should have the right to inspect and scrutinise that work directly. If a prison is run by a private company, we will not have that power. The power will be held by the private company and we will not have the ability to haul the company before the select committee to interrogate it. We can talk to the Department of Corrections, but, of course, the department and the Minister will have a vested interest in ensuring that the figures look good. They will work with staff to massage the figures, as we have already been told by people who have worked in privately run prisons. They made sure that those prisons looked good—that is exactly what they did.

Nothing we have heard so far justifies this legislation, other than ideology. It is ideologically driven because all of the facts stand in opposition to it. It is ideologically driven because National believes in contracting out. There is no justification for it, at all.

If members look at the legislation that has been put forward, they will see that it states in new section 199, to be inserted by clause 5, that in the contracted prison standards are to be “no lower” than in public prisons. The Minister in the chair says that the privately run prisons will all be better than public prisons. Well, why would one not state in the legislation that contracted prisons must always perform better than publicly run prisons? Of course, National will not write legislation to that effect, because it cannot deliver on it. The only restriction on our prisons from doing better is a lack of resources. The people who run our prisons are very able, very capable, and very innovative, and they will do better if we give them resources in every particular regard in terms of holding people in prison. The restriction on them has always been by way of resources.

This legislation not only is ideologically driven but also lacks ambition. It lacks ambition because National wants to see privately run prisons do only no worse than those in the public sector. This lack of ambition will be at a cost to the taxpayer. Every figure that the Law and Order Committee received shows that privately run prisons were more expensive than State prisons. There is no question about that. National members of the committee tried to get figures to show that privately run prisons were better, but they could get none—not one example of how they were better. The world experience shows that contract prisons are worse and inferior to those run by the State.

It is a pleasure to follow that member, Rick Barker. It was particularly good to hear him talk about the wonderful work of the Department of Corrections. I am sorry to say that in the Law and Order Committee today, during the review of the Department of Corrections, Rick Barker did not show any confidence in the department, at all. In fact, he quoted extensively some terrible recidivism rates, and he talked about how the department should be ashamed of itself. Then the member realised, as one of our members pointed out, that he had in fact been referring to the 2007-08 annual report, all of which was under the previous Labour Government. So when that member now wants to praise the Department of Corrections, I say good on him for doing so, because there has been a massive turn-round this year under this Government, and it is good to hear that we finally have a good Government helping and working with the department, and great performance.

That member also raised issues about cost. I did not realise that the Labour Party was such a low-cost option, but obviously that is what it wants. Prisons are not just about incarcerating prisoners; they are actually about keeping the public and our staff safe, and they are also about rehabilitation, and that is why this Government is committed to the rehabilitation of prisoners. We know that when we have a prison being run efficiently, along the lines so that we get the best value for money, we have more money to spend on rehabilitation. We know from the Auckland Central Remand Prison experience that the member talked about that the prison was the only remand-only prison in New Zealand at the time it was running. Therefore, comparisons with others are somewhat wonky. Frankly, the Auckland Central Remand Prison contracted for 70,000 hours of rehabilitation a year for prisoners, and the last year the prison was in operation it actually produced about 120,000 hours of rehabilitation—well above its contracted level. Yet at the same time, remand wings in our prisons were not doing that. When we are looking at numbers it is important to be realistic about what we are talking about.

The people who privately ran the Auckland Central Remand Prison brought iwi into prison management. They did a fantastic job. I went to see that prison when it was running—and, as a lawyer, I had been into other prisons before—and I knew that that prison was the best prison I had ever visited. The reason is that the whole attitude was about respect. When I went to the prison the staff said that they ran a culture of respect. Earlier this year I went to see four prisons in Australia. The member who has just resumed his seat, Rick Barker, says that this is all ideologically driven. Well, the prisons I went to see in Australia were all in Labour-run states in Australia, so I am not sure about the ideology there. In fact, they have been Labour-run states pretty much since Adam was a cowboy. We went to see two in Victoria and two in Queensland. What I saw there were maximum security prisons where I could walk around with other visitors in amongst the prisoners, in a situation where I actually felt safe. That is not something we could say about all of our maximum security prisons in New Zealand. I also saw rehabilitation, and I saw rehabilitation working.

💬 Hon Lianne Dalziel: You’re talking about a remand prison.

They were not remand prisons. These were actually maximum security prisons.

💬 Hon Lianne Dalziel: A remand prison is slightly different.

No, they were not, actually. There was one that was; all the others were maximum security prisons.

💬 Grant Robertson: Oh, one was—so all the others weren’t?

Three were not, of the ones I went to. I saw some rehabilitation, and I saw some efforts being made towards securing the best outcomes for prisoners. We already do what we can in the corrections area. The Department of Corrections has really improved in its performance this year, and it is great to be able to say that. But we can do better. One of the ways of doing better is to be able to benchmark ourselves against international standards and look at what we can do.

The member who has just resumed his seat talked about cost, cost, and cost again. But private prisons in New South Wales cost 32 percent less per prisoner than public prisons. The member did not want to talk about that. In Victoria they cost 11 percent less than public prisons. So when we are talking about cost we should look across the ditch and see what has been happening in states where there have been privately run prisons for years. The member also talked about the State needing to take over this role because of a constitutional issue. Well, actually, we also have privately run and contracted transporting of prisoners. In fact, that happened under the previous Labour Government. I did not hear Labour members talking then about it being ideologically impure, and I did not hear them talking then about the need to have the State doing every single thing because otherwise it would not be right.

One of the great things about having privately run prisons, apart from benchmarking, is the fact that we can actually have fines and incentives for programmes and for performance. That is not something we can really have in the State-run system. What we would like to be able to do is look at how we can make rehabilitation and a lessening in the rate of recidivism part of our contract management. Members also talked about the need to have the Auditor-General roaming through our prisons. I do not think that is necessary, when we have it quite clearly stated in the legislation that there will be prison monitors appointed by the Department of Corrections who will be responsible to the chief executive. One of the other good things about that clause, if the member wants to look at it, is that it means those monitors have to be changed on a routine basis so that we do not get people who get captured by the environment in which they are working. I think that is incredibly important.

Over the past few months people have said that we have been talking to people who have been running privately run prisons. Yes, we have. A lot of people who have come to see us have talked about privately run prisons, and we have been to look at them in Australia. I can say that every single one of the people who have talked to me has made it very clear that we want strong iwi involvement in prisons in this country. Fifty-one percent of our prison population is Māori. That is a shocking statistic, and it is certainly not getting any better. I expect that we will have a great input of iwi, in particular, into rehabilitation. We think that is absolutely crucially important, and that is why I would love to be able to see the Labour Opposition come out and support the work of my Associate Minister of Corrections, Dr Pita Sharples—in particular, in relation to the rehabilitation unit that he is putting together. Yet all we heard from the Labour Opposition—actually, from Mr Cosgrove, to be fair to the rest of its members—was about a race-based justice system. Actually, that is the sort of nonsense we have heard from that party in Opposition over prisons. What we should be doing is looking at what works.

💬 Hon Lianne Dalziel: Do you want me to go and get the Hansard of every time you said that?

No—well, I tell the member to find one. In fact, I think it is extremely important that people look at what works. That is why we are putting through this bill, with the support of the ACT Party, United Future, and the Māori Party, and I would like to thank those parties for their support. That is what we are doing. It is about good outcomes for people and good outcomes for all New Zealanders.

💬 Chris Hipkins: Tell us the evidence; there is no evidence.

I know that Mr Hipkins does not think there is any evidence at all in relation to the Māori units that Dr Sharples is looking at, but I say to Mr Hipkins that I think it is really important to give things a go and go for the best outcomes. We have 20-odd prisons in this country. We will have at least two that will be privately run. That is what we are looking at—not wholesale privatisation but a reasonable benchmarking against which we can benchmark ourselves.

Article 3 of the Universal Declaration of Human Rights states: “Everyone has the right to life, liberty and security of person.”, and that is what this debate is about. The reason we are debating this matter from a human rights perspective is that the implementation of the Universal Declaration of Human Rights is something we have responsibility for. That responsibility for the deprivation of liberty lies with the Crown, and it simply cannot be contracted out to just anyone the Government of the day considers might be appropriate.

I think that the Minister in the chair, the Hon Judith Collins, needs to think seriously about the consequences of a Supreme Court of Israel decision that came out late last week on Thursday, 19 November. It is a very interesting case, and I believe that it has relevance to this particular debate because, essentially, the Supreme Court of Israel has overturned the privatisation of prisons in Israel. It has done so on constitutional grounds, because of the fundamental breach of human rights that the process recommends. I do not have the actual decision in front of me, but I do have a report of the decision. It reports the President of the Supreme Court of Israel as saying: “Israel’s basic legal principles hold that the right to use force in general, and the right to enforce criminal law by putting people behind bars in particular, is one of the most fundamental and one of the most invasive powers in the state’s jurisdiction. Thus when the power to incarcerate is transferred to a private corporation whose purpose is making money, the act of depriving a person of his liberty loses much of its legitimacy. Because of this loss of legitimacy, the violation of the prisoner’s right to liberty goes beyond the violation entailed in the incarceration itself.” The president also argued that “in a prison run by a private company, prisoners’ rights are undermined by the fact that the inmates are transformed into a means of extracting profit.”

💬 Sandra Goudie: Rubbish!

“Efficiency”, the president wrote, “is not a supreme value when the most basic and important human rights for which the state is responsible, are at stake.”

💬 Sandra Goudie: What a load of rubbish!

I know that members opposite do not care about human rights. I understand that, and the interjections coming from the chair of the Law and Order Committee I expect from her, because she does not have the same background as her colleague next door to her, who, at least, has picked up a law book and read it, which could be surprising. But maybe the Minister of Education could read a book to her—maybe that would be a good idea; if it had enough pictures we would probably be away laughing.

But the point that I want to make is serious, and the serious point I want to make is that this decision is the beginning of the end of the international privatisation of prisons. It is the beginning of the end, because I believe that this case will become the foundation stone for cases that will be taken to the International Court of Justice, which will overturn what has been a fundamental breach of the Universal Declaration of Human Rights by the privatisation—for profit—of the deprivation of liberty. I am not arguing that any of the individuals concerned are not entitled to have their liberty deprived; they have committed crimes for which they will be held accountable. But this case says, and puts it very well, that the loss of legitimacy when profit is being made out of their incarceration is beyond that for what would otherwise be a violation of a basic human right. So I believe that the Minister does need to respond to this very recent decision. It is the beginning, I believe, of a series of cases around the world where the fundamental tenets that support our justice system in this country will be challenged in international jurisdictions, and where those of us who have gone down this track will be held to account.

The second thing that I will say is not so much in relation to that decision but to what happens when there is a change of Government, because we have made it absolutely clear that this will end in the same way that it ended after Labour became the Government in 1999 and inherited the Auckland Central Remand Prison under private management. I would like the Minister to respond to the content of the report. I know that she has probably not read this part of the report back from the Law and Order Committee, because it comes under the heading “New Zealand Labour Party minority view”. But I am assured, and the footnote states, that the source of the information—and it is reprinted exactly—is from the “Department of Corrections … request for further information from the Law and Order Committee,”. So this information comes from the Minister’s department, and I just want her to respond to these per prisoner costs, as tabled in the report.

When the Auckland Central Remand Prison was under private management from 1 July 2004 to 30 June 2005, the cost per prisoner was $35,700 for operating costs only, and $57,280, inclusive of property-related overheads, to look after a single prisoner. Remand prisoners held in other public prisons in that same period were only $32,000 and $50,208, by way of comparison. There are those who would say that the Auckland Central Remand Prison had particular additional costs, so that in the year after it went back into public management it would of course have cost more because costs would have risen. But in fact, no, the costs went down. The comparable figures per prisoner were $33,900 and $55,853.

I am really confused about the Minister’s comments that the private system is more cost-effective. Why, then, did it cost more when the Auckland Central Remand Prison was under private management, from 2004 to 2005, than it cost from 2005 to 2006 under public management? Obviously, at that time when other costs had gone up, the system, under public management, still cost less than it had cost the year before under private management. That to me is the second element of the argument against the privatisation of the prison function. Although there are statements as to privatisation being more cost-effective, in fact I cannot find examples anywhere of where it is. And the figures that the Minister has used to compare public with private of course do not mention that prison officers get paid less in a private prison, and that the ratio of officers to prisoners is substantially lower as well. I do not think that it is reasonable to say that we are comparing apples with apples. I think we heard the comparisons from someone today about “apples and apples”, “oranges and oranges”, and “apples and oranges”. But the point is that no comparison can be made unless we actually have a clear statement as to the nature of the terms of engagement for officers.

Officers do this important work on our behalf. This is not work that anyone would choose particularly to do, and the fact that we have loyal prison officers within our corrections system willing to undertake that role, on our behalf, and on behalf of the State, is something that we should value and not contract out to the lowest bidder.

That brings me to my third point, which is the ability to have genuine supervision over what occurs in our prisons. I totally support the Supplementary Order Papers that have been tabled by my colleague the Hon Rick Barker. The first is in relation to the Ombudsman; the second is in relation to the Auditor-General. I do not think it is good enough to have a prison reporting through a department. There is nothing better than to have the direct oversight of those who have the standing and the independence of both our Ombudsman and our Auditor-General, in respect of ensuring both that the processes being conducted within the corrections system are being conducted in a proper manner, and that there is accountability and transparency back to this House. That is where the accountability and transparency must lie. If it does not lie here, then I really do think that the Government has lost the plot as far as our obligations go.

The third Supplementary Order Paper that my colleague has tabled is to ensure that no contract is let for more than 3 years. That is a very good Supplementary Order Paper, because it makes it very clear to anyone who is possibly even thinking about taking advantage of contracting for one of our prison managements that they will have that contract overturned after a change of Government.

After listening to the Opposition, one would think that the end was nigh. I just cannot believe how overblown it is making this whole issue. I want to make a few comments, and I will quote from a report around contestability. There are three things I want to talk about. One is the Australian study comparing two new-generation public sector prisons, where the operating arrangements in the industrial award have been negotiated by the state Government under an explicit threat of market testing with two old-style prisons.

💬 Grant Robertson: Take it slowly, Sandra.

Well, there are three quotes here, so it could take a while. I would be surprised if the Opposition members are listening, actually, even though they need to learn a bit.

💬 Hon Member: They don’t understand, Sandra.

Well, that is the problem, and I guess this issue is mostly around union protectionism, really. The bottom line is that competition actually does work.

The Australian report states: “The authors of the study compared overtime and sick leave, which were regarded as major sources of inefficiency in the traditional prison estate, and found significant improvements. To our knowledge, this is the only study that has explicitly explored the efficiency gains from threatened competition.” Well, that is what Labour members do not like. They cannot stand competition—the idea that somebody might make one dollar more than somebody else. They cannot stand that. They would rather have inefficiency, because they cannot stand competition. They cannot stand the fact that competition generates innovation and new ideas, and a new way of exploring how to do things.

The report goes on to state: “One of the most significant impacts of introducing competition into custodial services has been to force prison managers to explore new service designs and management regimes. … A national survey of 65 private correctional institutions across the United States … found that, on average, staffing levels were … lower … Moreover, where public prison operators were exposed to competition, this was one of the most common ways in which they strove to reduce their costs.” Then it goes on to say—and this is the final quote I will use—“Competition has played an important role in the adoption of innovative new approaches to prison management”. Is the Opposition listening to this?

💬 Hon Darren Hughes: No.

Well, the Opposition members should listen, because time and time again they miss the point.

💬 Jonathan Young: It’s all about ideology.

That is right—it is all about ideology. It is not about the reality of the situation. The Opposition is driven solely by its ideology and its love of unions. The Opposition wants to protect union members’ jobs and make sure they are secure. Competition does bring in new ideas and new approaches to prison management, and brings the dissemination of best practice across both the public and private sectors. The two sectors actually benefit each other.

The last argument put forward by Ms Dalziel was about the lack of monitoring and accountability. Well, the fact is that there is a tonne of it in the bill, as the Opposition members will see if they look at it. Some of that monitoring and accountability was generated through good discussion from the members of the Law and Order Committee. There were times when we had reached consensus on some of the ways forward, but there were other times, of course, when we could not possibly do so, because the ideology was a bit of a roadblock. There is plenty of monitoring and accountability. A monitor is to be appointed for each contract prison, and the chief executive can appoint further monitors for different and particular purposes. There are also assistant monitors. So there are primary monitors, monitors for particular purposes, and we also have assistant monitors. We actually have three levels of monitoring.

💬 Hon Darren Hughes: It’s a land of opportunity, this country.

Just how much oversight does this Opposition—this Labour Opposition; the nanny State party—need? The Labour members just cannot get away from the fact that they are not happy unless they have a whole heap of monitors. [Interruption] That is absolutely right; they do not trust anyone.

What is the next Opposition argument? The next argument is that it is wrong that the running of prisons should offer the potential to make a profit. Well, for goodness’ sake! If it were not for a bit of profit, we would not survive in the economic world today. The Opposition members just do not understand business. They do not understand how to make a buck, and we can understand why that is the case.

It is rather surreal sitting here and listening to this debate about ideology from the other side of House. Let me get this right. I will go slowly. Your ideology is like this: State control good—

The CHAIRPERSON (Eric Roy): Order!

I am sorry, Mr Chairperson. I meant Labour—and the Greens even more so, but I will come to them in a moment. Labour’s ideology is: State control good, private enterprise bad. So to say that this measure is driven by some sort of mad, right-wing, privatising market ideology is really quite amusing. I expected far better from the Hon Rick Barker, whom I happen to respect considerably as a man of integrity and experience. But my incredulity was increased even more when the Hon Lianne Dalziel got to her feet. She is a graduate of the same law school I went to.

💬 Hon Darren Hughes: She got better marks.

I doubt that, actually, I say to Mr Hughes. We can compare academic records any time the member likes. When I was at law school our court hierarchy went like this: the District Court, the High Court, the Court of Appeal, and the Privy Council. Now, thanks to a—thankfully departed—politician, who is now on the far side of the world, our hierarchy of courts is like this: the District Court, the High Court, the Court of Appeal, and the Supreme Court—that monstrosity over the road.

Ms Dalziel was at law school before me, and at no time, to my knowledge—and I have done a wee bit of legal history—has the Supreme Court of Israel been part of our court hierarchy. I find it very amusing that Ms Dalziel stands there brandishing a judgment from the Supreme Court of Israel and cites it with approval. If I am not much mistaken, I have heard that party over there, Labour, and certainly that one down there, the Greens, bagging the country of Israel at great length and on many occasions. Those parties say they are Zionists and have oppressed the Palestinians. Well, I happen to agree with them. Israel did not come into an uninhabited desert, as they would have us believe, and make orange groves out of nothing. They came in and drove the Palestinians out. So for Ms Dalziel to be quoting the Supreme Court of Israel is, as her colleague Mr Cosgrove says frequently, a bit rich. So that is point No. 1.

Now, talking of ideology, the more ideological party here is the Greens. Former Green member Mr Tanczos has admitted in this House that although the Auckland Central Remand Prison had better indicators on suicide, suicide attempts, violence to guards, and violence by prisoners against each other—he admitted that all that was true—the Greens were against it. He admitted that even if that result were repeated in spades, the Greens would be against it. That is ideology, is it not? Let me ask the Green Party a question. Let us say, for example, that a private prison, run in conjunction with an iwi, reduces Māori recidivism from 70 or 80 percent, as it is now, to 25 percent in 5 years. I ask Mr Clendon whether the Green Party would still be opposed to private prisons. The answer is yes, because of ideology. It does not matter what works. It does not matter what the indicators are. The Greens would be opposed to it. What about Mr Hipkins? If we establish a private prison—and it will happen, as the member knows—and if in 5 years the recidivism rate is 25 percent less than it is now, will you still be opposed to it?

💬 Chris Hipkins: There is no evidence.

No, just answer the question—it is quite simple. Would you still be opposed to it?

💬 Chris Hipkins: It’s completely hypothetical.

You obviously have not read the Standing Orders. You are allowed to ask hypothetical questions in here, even in question time.

💬 Hon Darren Hughes: I raise a point of order, Mr Chairperson. When the member starts lecturing other members about reading the Standing Orders, and his entire speech consists of references to “you, you, you”—“you” being the Chair—I think that is sailing pretty close to the wind. He should come back to Part 1 of the bill. These references to “you” are just unbecoming.

The CHAIRPERSON (Eric Roy): I did actually call order there before, but I had in my excitement muted myself. So I take responsibility for not being able to impart that. But the member must mind his pronouns. Any member gets a 5-minute call. If members seek another call and I think they have not made best use of their time, it is my judgment as to whether they will get an additional call. That is my methodology—I probably should not be giving away secret information, but members, in the best interests of the Parliament, ought to be making the best use of their time.

I stand corrected, Mr Chairman. Thank you very much. I simply make the point that on the limited experience we have, private prison operation works. We will give it a go. We will see. ACT is supposed to be the ideological party, but on this occasion we in ACT say “Let us see what works.”

Part 1 of the Corrections (Contract Management of Prisons) Amendment Bill is fundamentally wrong in principle and fundamentally wrong in practice. Mr Garrett wants evidence, and I will come back to that shortly.

We need to be absolutely clear that what takes place in our correctional system and the taking away of liberties are fundamental responsibilities of Government. If we want to go down the path of privatising the taking away of individuals’ liberty, we are on a very slippery slope in terms of the kind of society we will live in. It is a core function of Government to take that liberty away—a core function.

💬 Jonathan Young: The courts do that.

No, I say to Mr Young that it is a core function of this Parliament to make laws. When we make a law like this, we go down a very dangerous path. We have to accept that when we pass laws in this Parliament there is accountability and responsibility. I want to return in this call, or perhaps in another one, to the Supplementary Order Papers that Mr Barker has put forward on the matter of accountability. If the driver of our prison system is profit, the safety of our communities and the safety of the people who work in our correctional system will be compromised. If the driver is profit, the driver is not the safety of our communities. That is the evidence from around the world. It is fundamentally wrong in principle to go down this path.

I do not think members opposite should dismiss the decision of the Israeli Supreme Court quite so quickly, because it is quite clear that those people who have driven the opposition to private prisons in Israel know that this is an issue that will be taken up globally. This is a major legal challenge to the rights of private prisons to actually exist, and it will be picked up. Whether or not members opposite agree with that legal challenge or think that Israel should not be considered in this debate, the challenge will be picked up by the opponents of private prisons. The opponents of private prisons in New Zealand do not come just from the Labour Party and they do not come just from the Green Party; they come from right across the sectors of society. The Catholic Church in New Zealand opposed it. The Howard League for Penal Reform—

💬 David Garrett: There must be another lawyer over there somewhere who knows something about the law, surely.

I say to Mr Garrett that this bill is actually about a fundamental responsibility of this Parliament. Lawyers are not the only people who have an opinion about this. It is a vitally important law and it will be taken seriously on this side of the House.

The Israeli Supreme Court said quite clearly that the right to enforce—

💬 David Garrett: Who cares?

I say to Mr Garrett that people will take this case up, and the Government needs to have a response. I want to know whether the Minister of Corrections knows about this decision. Has she been briefed about it? Can she take a call and let us know whether this Government is ready for the legal challenge that will come in relation to the right to have private prisons? That legal challenge will be coming in New Zealand and around the rest of the world, and the Government needs to know how it will respond to it.

This bill is also fundamentally wrong in practice. Sweeping statements have been made throughout this debate about how private prisons will be more efficient and more effective, yet the evidence right around the world is that that is not true. In the United States we know that from a report in 2001 describing what happened when prisons were privatised. It makes absolutely clear that the quality of services and safety was compromised. Abuses found in privately run prisons included low wages for staff, poorly trained staff, bad food, and overcrowding. That is from Project Censored of the Sonoma State University in California. It describes a destructive pattern of extensive inmate idleness, a lack of correctional experience on the behalf of almost all staff, and a search procedure that could fairly be described as a reign of humiliation directed indiscriminately at the entire prison population. That is the evidence from the United States of America.

We could go to the United Kingdom, where in 2008, 10 of the 11 private prisons in the United Kingdom were in the bottom quarter of prisons. The United States National Council on Crime and Delinquency said—and here is the evidence; this is its quote—there was “no data to support the contention that privately operated facilities offer cost savings over publicly managed facilities.” The privatisation of prisons is wrong in principle, it is wrong in practice, and it does not save any money.

We can go to Australia. In fact, the Minister has told us already that she went to Australia to look into this. Firstly, the briefing the Minister herself got for her trip to Australia from the Department of Corrections advised that there was no compelling evidence to demonstrate privately managed prisons provide higher-quality services, better outcomes, or significant cost savings in the correctional system. That is what the Minister was told by her own department. But when she went to Australia, she could have perhaps looked into the Metropolitan Women’s Correctional Centre in Victoria. It was privatised. After an inquiry in 2000 found widespread drug use, deaths in custody, poor training, and cover-ups, the Victorian Government was forced to take that facility back into public control. In Canada in 2006 the Government returned the country’s one private prison to the public sector because there had been no appreciable benefit to the country and to the correctional system. That is the problem with this bill: it is wrong in principle, but it is also wrong in practice.

When we come back to the situation in New Zealand, we know what we have experienced. We had that time with the Auckland Central Remand Prison. My colleagues have already spoken about the fact that from a financial point of view, it provided no benefit whatsoever. It also did nothing in terms of the wages or safety of staff. None of that was improved by going down this path. In fact, as Mr Barker has said already, the bar is set so low in Part 1 of this bill that the prison does not even have to be better or provide a better service in terms of New Zealanders’ safety. This is a mistaken piece of legislation. It is driven by ideology; it is certainly not driven by evidence. It is certainly not driven by evidence globally or evidence within New Zealand.

I will refer to the Supplementary Order Papers, because I think one of the critical elements about why incarceration is a State responsibility comes down to transparency and accountability. In the bill we can see that the Law and Order Committee realised this, because it did include a provision for the Public Records Act to apply to the contracts that are entered into under the bill. That material about prisoners will now be treated as if it were produced by the Department of Corrections. The natural corollary to that is to allow Parliament to have some scrutiny via the Ombudsman and the Auditor-General so that we can see what is going on and look at how resources are being used. I simply cannot see why, if the Government is prepared to accept that the Public Records Act should apply, the Ombudsman and Auditor-General should not be given the same ability to come forward and look into and analyse those things.

The Supplementary Order Papers from the Hon Rick Barker will do just that. They will allow the Office of the Auditor-General to have complete and unrestricted access to all aspects of any contractor prison, as if it were a prison run by the Department of Corrections. The Minister needs to tell us what is wrong with that. What is wrong with Parliament having the ability to have some scrutiny over these things? The same applies with the Ombudsman. Although the Ombudsman may have some indirect ability, Parliament needs some reassurance, if we are going to go down this mad path of privatisation in prisons, that we can look into what is happening in those prisons. Supplementary Order Paper 87 “authorises the Ombudsman to have complete and unrestricted access to any contracted prison, prisoner, prison records, and prison staff to carry out the duties and responsibilities of the Ombudsman’s Office …”. They are two very sensible Supplementary Order Papers that attempt to make some kind of transparency and accountability available to the people of New Zealand. The Minister must tell us why she is not—I presume she is not—supporting those Supplementary Order Papers. Could we get some indication from the Minister?

💬 Chris Hipkins: She obviously thinks they are quite funny.

She does seem to find it quite funny. In fact, National members seem to find the whole debate quite funny. I would like to hear her take a call on those Supplementary Order Papers and let us know what she wants to do with them. The third Supplementary Order Paper that Mr Barker has put forward amends section 198 to make sure that no contract for running a prison under this Act will be more than 3 years. This is a very sensible amendment because it will not bind a future Government; this bill will be repealed under a future Labour Government.

This bill and this Part 1 are fundamentally flawed in principle and in practice, and they simply do not stand up to the scrutiny of international evidence. If we really want to enter into this brave new world, as Sandra Goudie said, to give it a go and give it a whirl, I say that it is too important for that. The safety and security of New Zealanders will be compromised. The safety and security of staff will be compromised. It simply is not good enough to say that we are just going to give it a go. It has not worked elsewhere; it will not work here.

I am on the Law and Order Committee with a few other members who are in the House tonight. For the whole time, the Government has pushed the idea that private prisons are safer, better, and cheaper. But I know, like every other member on that select committee knows, that the vast majority of the submissions that came through on the Corrections (Contract Management of Prisons) Amendment Bill were opposed to private prisons.

One submission that was not opposed—that was in support of private prisons—was from the GEO Group. We all know that that group has a vested interest in making sure that we privatise prisons, because it wants to make profits out of our prisoners. John Key is reported as saying that private prisons produce very good results, and he was talking with regard to the GEO Group and the private prisons that exist in Australia. The GEO Group is part of the Wackenhut Corporation—the owner of 13 correctional facilities, 11 of which are operated by GEO Group. The group has immigration detention centres, youth facilities, and adult prisons. GEO Group’s value now apparently exceeds $1 billion.

If it is really as good as that, why did it recently settle a case where staff had placed a woman in a cell block with male inmates, by whom she was raped and beaten, and she later took her own life? If it is really as good as that, why were 125 inmates removed from a prison by state authorities because of inadequate staff training and inadequate health care? GEO Group’s facilities have been reported as serving rotten food. They have knowingly made false and misleading statements to state officials, they have failed to complete criminal record checks on at least 100 guards, and they have violated domestic and international laws on due process and humane treatment. Mr Key says that private prisons have shown good results, but I ask members whether they think those are good results. We do not think so on this side of the House.

Prison officers who worked for the Auckland Central Remand Prison when it was under private management made a submission to our select committee. They said that serious, dubious things had gone on with regard to cover-ups, the way in which they were paid, and working conditions. They pointed out that in order to get bonuses, it was important that they made sure that they reported in a way that did not show up anything untoward; otherwise, they would not collect the money. Those concerns were raised with the select committee, yet the Government is still pushing for us to privatise our prisons.

The Minister in the chair, the Minister of Corrections, was earlier talking about the fact that privatisation is not all about cost, but, unfortunately, not long ago the Minister was the one saying that private prisons would be cheaper, and it was all about the fact that they would be safer, better, and cheaper. We already know, when we look at the evidence that I just discussed, that private prisons are not safer. Cost has been discussed by some of the members on this side of the House, and when we compare it with the cost of State prisons, we see that private prisons are not cheaper. We know that they are not safer, not cheaper, and not better. So there is absolutely no reason for this Government to go ahead and privatise our prisons.

Among the Supplementary Order Papers that have been discussed is Supplementary Order Paper 86, which was put forward by the Hon Rick Barker. It states that the contract for the running of a prison shall last for no more than 3 years. The problem at the moment with this bill is that the length of the contract is unlimited. The Minister will decide the length of the contract. Our concern on this side of the House is that if the management of the prison goes wrong, New Zealanders will have to fork out money to pay to get out of that contract. We cannot determine for how long the Minister will decide that the contracts run. For Mr Rick Barker to put forward an amendment that would limit the contracts to 3 years is completely reasonable. At the end of the day, whoever is in Government can decide whether private prisons are working and decide whether those contracts are to be extended. There is absolutely no reason why the term of the contract should be at the discretion of the Minister, and there is no reason why we cannot legislate for a certain term, so that on behalf of New Zealanders we can check on how privatisation is going, and can make sure that they do not have to pay out when things go wrong and we desperately need to get out of a contract.

With regard to the evidence that I discussed earlier, it is obvious that things go wrong with private prisons. They have done in other countries; they have done in New Zealand in the past. It is a real issue.

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.

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 $50,208, which is $7,000 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.

I think it is only fair that I answer some of the questions raised by the Opposition members. I am happy to do so.

In relation to Mr Barker’s Supplementary Order Papers, I say that Mr Barker has never once referred those matters to me or to our caucus, and I am afraid we will not be supporting them.

Mr Hipkins has been talking tonight about several issues. I hope I have this right. I think one of the things he has raised is that, effectively, no one should make a profit out of someone else’s unfortunate circumstances. Is that a reasonable rendition of what the member said?

💬 Chris Hipkins: In the case of prisons.

On that basis we would not have private hospitals. We would not have dentists outside of the hospitals. We certainly would not have grocery shops, because, basically, food is all privatised in this country. We certainly would not have insurance, and we definitely would not have schools that were private or privately owned. The fact is that the State provides the funding, and as long as it is monitored and the chief executives are in charge, it is another matter who runs it. I have not yet heard Labour members refer to the fact that under their watch it was quite all right for prisoners who were sent from the court to prison to be transported in privately run prison vans. How does that work with the Opposition’s theory that only the State should be in charge of that area? Why should that be?

The fact is that Opposition members are ideologically driven, as long as it works for them. But unfortunately we have found that sometimes the State is not always the best performer on every single measure. I heard a lot from Miss Sepuloni tonight about the terrible things that have happened in private prisons. I have news for that member: really terrible things have happened in State-run prisons too—quite a few of them when Labour was in Government. In fact, some of the things we have had to fix happened when it was in Government.

One of the good things with a privately run prison, from our point of view, is that we can put performance measures on it. We can have accountability that means something. When Auckland Central Remand Prison was privately run, a clause in its contract said that if there was an escape it would pay a fine of $50,000. This was at a time when there was a very high escape rate in New Zealand prisons. There was one escape from Auckland Central Remand Prison and it was fined $50,000. One of the great things was that it never happened again.

💬 Simon Bridges: Simple but effective.

It is very effective. Miss Sepuloni has also said that there have been cover-ups. Well, let us see the evidence of that. She has talked about wholesale privatisation. Well, we indicated that we are looking at one-tenth of our prisons being privately run, which is hardly wholesale privatisation.

I heard tonight from the Hon Lianne Dalziel about the Supreme Court of Israel. The member quite truthfully said she had not read the case, but someone had told her about it. I am sorry, but I will need a bit more evidence than that. I have never been to the State of Israel, but I am confident that our record on human rights would stack up pretty favourably against that of the State of Israel—or against most other States, frankly.

When we look at the cost—the Labour Party goes on and on about cost—we see that it is a fact that rehabilitation costs money. Auckland Central Remand Prison was contracted to perform 70,000 hours of rehabilitation when no other remand wing in this country at that stage was doing it, and, yes, it did cost. In fact, it did not just produce 70,000 hours; it produced 120,000-odd hours. It over performed and did not get paid extra for that, either.

She talked also about the loyal prison officers. It is nice to hear a member of the Opposition saying something nice about prison officers. When I became the Minister of Corrections, I was the first Minister of Corrections to ever turn up to a graduation ceremony for our loyal prison officers. Corrections Ministers under Labour, which was in Government for 9 long years, never once did so—not once. So it is nice to hear that now Labour likes the prison officers.

Grant Robertson MP spoke about liberties being taken away by private prisons. Well, I have news for him; I know he is not a lawyer. It is actually the courts that remove people’s liberty; the Department of Corrections does not. We just receive them. I think most of the issues have been dealt with.

How funny it is to listen to this Minister, Judith Collins, talk about iwi involvement in prisons. How terrible it is to listen to her talk about how great that would be. Do we remember that when this Minister was a new MP, she went to a pōwhiri—a Department of Corrections pōwhiri, if I remember correctly—and she had a big “waa” because she had to sit in the second row of the pōwhiri instead of in the front row. She stormed out of the pōwhiri and made a huge big row about it all through the country. She walked out in a huff, possibly with tears streaming down her face, because she had to sit in the second row and not in the front. And here she is now, supposedly crowing about how private prisons—international corporations—will be able to make a wonderful profit from the imprisonment of those Māori whose pōwhiri she might have been part of. She is really pleased that international corporations will make money out of the imprisonment of Māori. Her own behaviour has clearly demonstrated her absolute failure to respect Māori and Māori process, yet she stands here and tries to say contract management is a good thing for Māori people. It is a terrible day to hear the Minister talk about that in this context.

My colleague Nandor Tanczos and I went to visit a number of prisons, including the Auckland Central Remand Prison when it was being run by GEO Group—by Wackenhut—and he and I talked with Dom Karauria, who was there at the time, and with the iwi involved with the management and running of that prison. It was very innovative. The prison was a wonderful building, built with public money and designed for that purpose, and the management was very engaged with trying to find ways to involve Māori. But that came down to the fact that Dom Karauria was in charge. It had nothing to do with the ownership of the prison. It was about this one guy who had had experience in Australia of working for other prison organisations that did not have respect for indigenous people, and he himself had made a commitment to do so. Nandor and I were both very pleased to have worked with him and to have talked with him about his commitment, and we celebrated that. But that was the commitment of just one person. It had nothing to do with whether the prison was privately run or publicly run. It was because of the commitment of individuals: the people that Dom Karauria built around him to support Māori.

It surprises me a great deal that the Māori Party, in particular, supports the Corrections (Contract Management of Prisons) Amendment Bill, and does not recognise that that was the case—that it does not recognise the special skills of Dom Karauria, and instead buys into the misleading information and misleading rhetoric about private prisons being essentially good for indigenous people. We know that is not the case. We can look at the experience of the private prisons in Australia, and at the significant abuse and damage that is done to indigenous Australians, to Aboriginal people, in those prisons.

💬 Carmel Sepuloni: Absolutely.

That is right. We can look at the example of the prisons that GEO/Wackenhut has operated in America, and my colleague Carmel Sepuloni has described some of those things. Again, a huge proportion of the prison population are black people, Mexicans, Hispanics, and the indigenous people of that country, as well. In those countries we can see that there has been an ongoing exploitation of indigenous communities by these companies, which make a profit from the systemic racism inherent in their legal systems. That systemic bias, that systemic racism, exists in this country as well, and the Māori Party knows that. The Māori Party knows that that is the case.

I hope that Tariana Turia is doing all right. She was reported a few months ago in the Wanganui Chronicle—it should be Whanganui with an “h”, I have to say—talking about this issue. She stated: “Our people continue to go to prison, and many of them have spent a long time not functioning well in society. They need the opportunity to have their mauri ora and mana restored. No one is going to do that in a public prison.” She stated: “Absolutely, we are not in this to make money. I am a firm believer in redemption.” She went on to state: “Our people have been deeply affected by the inequalities of the system, and the current system does not address the reasons that people go to prison.” She said the Māori Party support was about not just rehabilitation but also habilitation, and Māori could be part of their own solutions to these issues.

I agree with Tariana Turia about that; Māori can be part of the solutions to imprisonment issues. The fact that more than 50 percent of the prison population is Māori is a disgrace, and more needs to be done about that. But there is nothing to prove that privately owned prisons will make any difference to that situation. In fact, if we look at the overseas evidence, we see there is ample evidence to prove that privately owned prisons will do more damage to indigenous communities. They will do significantly more damage than public prisons do to the Māori population, because of the use of that population as a cash cow with which to make money. That is the basis behind the thinking around privately owned prisons. There is money in it.

The prison staff who came to talk to the Law and Order Committee talked about that. They showed us that in great detail, putting themselves at risk by doing so, because one or two of these guys had worked in the private prison and they will not get a job there now, even though they knew this legislation would be passed. They came and talked to us about the financial incentives for the managers, the owners of the private prison, to avoid their obligations in order to protect their financial bottom line. They talked about incentives not to find drugs, about staff being not disciplined but encouraged to resign in order to avoid the reporting of those problems, and about inadequate drug-testing. The only way to describe it is, I guess, as the company actively hiding information in order to appear to be complying with its contract, so it will retain the performance bonus. Those are the kinds of things that the Minister in the chair, the Hon Judith Collins, was talking about when she said privately run prisons were a good thing. The Minister said those things were good about private prisons, because they would have financial incentives to behave better.

Privately run prisons have financial incentives to hide information. That is one reason why the Green Party will be supporting the amendment to provide for the Auditor-General to have a great deal more oversight over private prisons. There needs to be a means by which the public can investigate the financial incentives, the financial issues, behind these companies and their operations. If we do not do that, there is no means by which that can happen through the contact. The owners and managers of the private prison can hide their financial information by using commercial sensitivity as a barrier. The only way to find out whether they are incentivised to hide information, and whether they are actively preventing their staff from doing drug testing, from finding drugs, and from being involved in all of the issues that those staff brought to us will be by making the Auditor-General able to investigate those matters. That will provide the best possible level of scrutiny over those issues.

It still remains a mystery to me as to why the Māori Party supports this bill, and why the Associate Minister of Corrections, Dr Pita Sharples, instead of supporting private prisons, was not able to negotiate with the National Government for Māori to be able to be involved in the running of public prisons. That could be done just as easily. In fact, if private prisons will comprise only 10 percent of the prison management in this country, then 90 percent of the Māori prison population will still be in the public sector. If there is no reform of the public sector, then how can we possibly expect that anything will be made better, or that anything will be done to resolve the issues around the Māori prison population? There has been no effort to deal with the public sector. What the Māori Party has done, and what the Minister has allowed to be done, is the diversion of attention, again, from the issues around the Māori prison population. The real need that should be met in the public sector is to be diverted to the private sector as some kind of panacea, or some kind of magic bullet solution, because that is what it is meant to be in the end.

Contract management is meant to be a magic bullet solution to the issues around dealing with the Māori prison population. It will not work for the vast majority of those Māori who are in jails. We know that jails increase recidivism and that jails cause enormous costs to whānau, to family, and to children. None of that will be resolved through the private prisons. None of that will be resolved by the Māori Party’s support for this legislation. Private prisons cost more than those in the public sector. That argument is based on evidence, not on the fallacies put out by the National Government. The private sector will profit from the systemic racism in the system.

Anyone watching this debate from afar might be somewhat baffled, I think, by some of the arguments that have been put forward—in particular, by the Government members. People would certainly be baffled by the fact that the Minister in the chair, the Hon Judith Collins, somehow thinks that dentistry and grocery stores have some relevance and are a point of comparison for some of the arguments that we have been putting forward.

Government members have continued to claim that the fact that some part of Labour’s arguments are based on a principle, and on a principle that we hold very strongly, is somehow repugnant. I find that quite bizarre. I make no apology for the fact that we are applying a principle in this case. I make no apology for it, whatsoever. The difference between the way that we have presented our argument and the way that Government members have presented theirs is that we are willing to explore our view. We are willing to talk about where our principle comes from. We have quite clearly stated that we do not believe that the removal of someone’s liberty—a fundamental part of our justice system—should be carried out by a private citizen. We do not believe that the removal of someone’s liberty—an action that is either enacted by a court or carried out on a day-to-day basis by a prison service—should be put into the hands of a private citizen who enacts that action on behalf of shareholders. We do not believe that. We are fundamentally opposed to the State being directly removed from that responsibility.

I have not yet heard from the Government members a willingness to stand up and directly articulate their ideology on this bill. I have not heard from any Government member who has been willing to stand up and plainly state that he or she believes that private citizens should be able to make profit from our prison service and from this fundamental role of the State. I would be very interested as to whether any of those Government members have the same courage of conviction to stand up and directly state that.

It is not just principle that we have been talking about. In this case, we are backing up our principled argument with evidence. Over and above the question of whether private companies should be operating in this role, the evidence demonstrates that in the past when we have allowed that to happen, it has not led to an improved service. In fact, it was far from it. We need only go back to a very, very basic question. It is the same kind of question that we could apply to accident compensation, for instance. Why would a private company seek a contract from the State to administer a prison unless profit was involved? We do not hold objection to the notion of profit, but we do hold objection when it comes at the cost of a fundamental service.

Let me break it down. Where will the profit come from? Where is the incentive for private companies to enter into this? We have seen it before. One way to make a profit is to lower staff-to-inmate ratios. That has a natural implication: often prisons end up making lockdowns longer. There is less time out of the cells participating in things, like education, that will reintegrate a prisoner into society. Auckland Central Remand Prison was one of those that lowered its staff-to-inmate ratio, so we have the evidence already. Having fewer rehabilitative services is another way that prisons could enact a few cut-backs; a reduced range of services is another. Again, we saw the Auckland Central Remand Prison take part in that. In fact, there are reports that the Auckland Central Remand Prison refused to take prisoners after 6.30 p.m. because the majority of its staff were off shift at that point. Cuts in staff pay and conditions are also a possibility.

In a nutshell, profits in this case have often compromised service delivery, and this is an area where we cannot afford cut-backs in service delivery. Some of those reports came directly from prison officers who had worked at the Auckland Central Remand Prison, both when privately and when publicly managed, and they submitted that when it was privately run decisions were made on a day-to-day basis that were intended to protect the reputation of GEO Group, and to ensure that performance bonuses provided under the contract were obtained by GEO Group.

I move, That the question be now put.

I will pick up on a number of points. Firstly, I will come back to the point made by David Garrett as to why private profit is not always the best thing to have in situations like this. I will do that by picking up on the points made by Sandra Goudie and the Minister, the Hon Judith Collins, which basically seem to say we should do this just to have a try at it—we should give it a go and see what happens. It seems to me to be a cavalier approach to making public policy. Give it a go! This a laudable Kiwi attitude. It has done us well in the bush, on the sports field, and in those sorts of things, but I would suggest that it is not a good principle for developing public policy.

Public policy has for a long time understood the importance of separating the powers. This Parliament does not make decisions about individual court cases, for very good reason. There are a whole range of things where we separate the powers. Parliament has separated its power from the executive for very good reasons. Parliament should not try to run things. We separate the powers of the Minister and the chief executive for very good reasons. There are accountability reasons.

One of the important points about this is that in having the State itself run the prisons, there is no opportunity whatsoever for private interests to get into play with the operations of a prison. I will give a very good example, and that was in the United States, where recently a judge had thousands of decisions overturned because the judge was making decisions about where prisoners were being sent and for how long, and they were going to a prison in which he had private interests. His private interests overlapped with his public policy duty. If we have private prisons we put that principle at risk.

💬 David Garrett: How many corrupt judges are there?

The member can interject as much as he likes, but by ensuring—

💬 Chris Hipkins: And he will.

—which my good colleague here, Chris Hipkins, has said—that the incarceration of prisoners is done by the State, there can be no private interests, and there can be no profit motive in it. When we have contracted out we have allowed people who have private interests whilst carrying out public duties to have an overlap of interests, and these are not always good things.

Secondly—

💬 David Garrett: Chubb does that, doesn’t it?

Well, let me just deal with Chubb. Chubb runs a few buses and trucks around the place. It does not carry all the prisoners. It was there long before the Labour Government was in place, and it is not responsible for the prisoners. Chubb is effectively a specialist taxi service. A prison has control of the prisoners 24 hours per day, 7 days per week. It has absolute control of them. It picks a person up and takes him or her to another place where he or she is then placed in the control of the police, who have absolute control of them.

The point I will come back to is about the role of Parliament and the Auditor-General in ensuring that these things are done properly. This is a fundamental weakness. What the Minister is saying to us is that the chief executive and the monitors and auditors whom the chief executive appoints should offer this Parliament sufficient assurance. I say to the Minister that the interests of the chief executive can overlap with the interests of the particular prison. No chief executive will allow a contract to be arranged where one will say after a short period of time that this is a failure, this is wrong, and it has gone terribly bad, because it reflects badly on him or her. The chief executive will be very tolerant of any private contractors, because their success will reflect on him or her personally—a contractor’s failure will reflect on the chief executive badly.

As we heard in evidence before the select committee, the private prison that we have tried in New Zealand was massaging its figures. There is no doubt that it was massaging its figures with the—

💬 David Garrett: There were allegations. We did not hear evidence. Get one of the lawyers to explain the difference between allegations and evidence.

We heard directly from the people who turned up, at a risk to themselves, and they told the select committee. I have no reason to disbelieve them. There were a number of them, and they said that they were massaging the figures. They massaged the figures because that was in the interests of their profit-driven employer. The interests of the chief executive and the contractor do overlap. The interests overlap in that they do both have a commitment to ensuring that they can show a success on paper. That is why this Parliament should have an independent oversight of that through its auditor, our Parliament’s auditor, the Office of the Controller and Auditor-General.

I move, That the question be now put.

It has come up over and over again, but we cannot say it enough: one of the main reasons that Labour members oppose the Corrections (Contract Management of Prisons) Amendment Bill is that we believe that prisons are a core function of the State.

💬 Hon Member: Oh God.

They groan whenever we say that. Do members know why the Government members groan? They groan because they do not understand what we mean when we say that prisons are a core responsibility or core function of the State. The reason they do not understand what we mean is they would quite happily privatise anything. They would quite happily privatise all the functions of the State—education, prisons, health, accident compensation, and perhaps even our welfare system. Who knows? They are quite happy to privatise. They do not understand what a function of the State is. That is one of the reasons why Labour members oppose this bill.

We understand, given some of the things that have happened in the last year since this Government came in, why the Minister of Corrections and the National Government would want to shift the responsibility for this function. We understand, given what has gone on under their watch. Let us look at what happened over the last year that might explain why the Minister and the Government want to shift responsibility for our prisons, to hand over the accountability to private managers. Let us look at what happened. Under the Minister of Corrections’ watch over the last year, two prisoners broke out of a police van at Palmerston North District Court on 15 January. Three remand prisoners broke out of a prison van in Hamilton on 19 January. Ărai Hema fled from an outside work party at Auckland’s Pāremoremo prison on 21 January.

💬 Sandra Goudie: Hello? We’re doing Corrections, not the Police.

I say to that member that she should hang on—there is a lot more to go. I might have to take two calls on this one. Storm Hughes fled from a work party outside the Spring Hill Corrections Facility in North Waikato on 11 February. Robert John Wikaere escaped from Te Awamutu’s Waikeria Prison on 17 March. Ollies Siaea walked out of the Manukau District Court after he claimed to be another prisoner on bail, on 20 March. Three prisoners were caught on a roof at Mount Crawford prison on 13 September, trying to jump over a prison wall. A fourth who had already managed to successfully escape that way was caught by police less than an hour later. William Katipā, aged 43, escaped from a medium-security unit at Waikeria Prison after scaling a security fence on 29 September 2009. On 23 October, police were seeking help in locating Ernie O’Neal Paul, a high-risk offender, who was wanted for breach of bail. Christopher Watkins, 46, escaped from Tongariro/Rangipō Prison on 22 October.

These things happen, and they are happening more so—the research shows this. All of the submissions that came through the selection process, except for the one made by GEO Group, supported what Labour members are saying. These things happen more in private prisons, but the point of difference is that when prisons are privatised the Government no longer has to be accountable for them. The Government can put the blame entirely on the private company that is managing the prison. We can see why the Minister would like to shift the responsibility. The Government does not want to take responsibility for this. It would rather see the private companies cop the flak, so that it is not the Government that is held to account by New Zealanders. That is the issue.

I will go back to the proposition that private prisons are safer, better, and cheaper. Everything that has come up tonight from this side of the Chamber, and from my Green colleagues, demonstrates that they are not safer, better, and cheaper. As my Green colleague Metiria Turei said earlier, in respect of prisons, all of a sudden the Minister of Corrections is concerned about iwi. This issue was discussed in the submissions, as well. We saw a submission from prison officers who had worked in both State-run prisons and the Auckland Central Remand Prison when it was under private management. They said that cultural factors were not taken into account when that prison was privately run. They brought up the fact that at one point Australian prison officers were brought over to New Zealand to work in the prison. There were issues with regard to how much they were being paid compared with our local prison officers. There were issues with regard to the ability of the Australian prison officers to understand the cultural background of some prisoners. They gave examples in respect of Pacific Island prisoners.

I move, That the question be now put.

I will come back to some of the technical provisions of the Corrections (Contract Management of Prisons) Amendment Bill. I have a number of points that I am hoping the Minister in the chair, Judith Collins, will address. I turn to new section 198, “Management of prisons under contract”, set out in clause 5. The point I was beginning to raise, when I so unfortunately ran out of time, concerned the criteria the Minister will use when determining whether a prison should be put out to private contract, and what process there would be around public consultation in doing so.

The Minister mentioned in her speech that she envisaged that 10 percent of current prisons, if I understood her correctly, would be put out to contract management. I think that a number of New Zealanders who live in areas where there are existing prisons will be interested to know how the Minister will determine which prisons will be put out to contract and which ones will not be. The bill is completely silent on that point. The only thing that new section 198 does is allow the chief executive of the Department of Corrections to put any prison out to contract management with the Minister’s prior written consent. It does not give any criteria or establish any grounds upon which the Minister will give that consent. I think probably the Minister in the chair will be the Minister who would make those determinations, so I will be very interested to hear exactly how she will do that.

I represent the Rimutaka electorate, which shares its name with the country’s largest prison, Rimutaka Prison. The vast majority of constituents—78 percent, I think—who completed the constituency survey that I put out were opposed to having a contract manager for Rimutaka Prison. Interestingly enough, though, there was some support amongst the local population for expanding Rimutaka Prison, which surprised me. It is not that Rimutaka constituents are anti-prison—we appreciate that we need a prison—it is that the vast majority of residents are opposed to the idea that it should be run by a contractor.

💬 Hon Judith Collins: Not going to.

The Minister is not going to do that. I wonder whether, for the sake of the residents of my electorate, the Minister may stand up to take a brief call and put that on the record of the House. The Minister has at least indicated to me, before all these witnesses, that she is not going to put out Rimutaka Prison to private contract. I am very heartened by that, and I thank her. But I imagine that every other area in the country that has a prison will want to know whether their prison could be put out to private contract. New section 198 is very silent on that point. I am pleased that the Minister has obviously thought about whether Rimutaka Prison would be put out to private contract, but I would quite like to hear about the other prisons in the country.

I turn to new section 199(1)(c)(ii), set out in clause 5. It talks about “sufficient suitable staff members to enable the contractor to carry out the contractor’s statutory and contractual obligations in relation to the prison;”. Obviously, the Minister will be involved in determining what goes into these contracts when she is dealing with the chief executive, who will have the primary responsibility. One of the questions that I have is whether she would envisage, for example, minimum staffing levels being in a contract. If, hypothetically, Rimutaka Prison were to be contracted out—and I accept the Minister’s word that she will not do that—the people in my electorate would want to know that any private contractor of Rimutaka Prison had some specified minimum staffing levels that it had to meet. Obviously the safety of the people who work in the prison and the safety of the people in the community around the prison is very much dependent on the number of staff who work in the prison. I would like to know a little more from the Minister as to how she envisages the requirement under the provisions of that new section being put into practice.

I turn to new section 199(3), set out in clause 5, which is basically a catch-all provision for any other provisions that the chief executive and the contractor see fit. The bill provides a fairly comprehensive range of criteria that any contractor will have to cover. I wonder whether this section is necessary, and, if necessary, what types of clauses and provisions the Minister envisages being captured by it.

The final point I raise concerns new section 199B, set out in clause 5, which limits the liability of the Crown in relation to the contractor. In particular, this section provides that the Crown is entitled to be indemnified by the contractor.

I know that I have Labour Party colleagues who have not yet had the opportunity to make a contribution to the debate on the Corrections (Contract Management of Prisons) Amendment Bill, so I appreciate the opportunity to do so.

I refer to a comment that the Minister in the chair, Judith Collins, made. She compared a prison to a grocery store or the local dairy down the road. I do not know what a Minister of Corrections—a Minister who is responsible for one of the most serious parts of the Public Service, and responsible for the policy that deals with some of the most serious issues of safety and the rehabilitation of those who are involved in criminal offending—could possibly have in her mind such that she could compare a prison to a grocery store. I guess that is just what we have to live with, with a National Government that puts a person who would think like that in a position of such responsibility. There has been some discussion—[Interruption] The Minister herself said it. If the public are to have any sense of security about who is running the policy behind one of the most important parts of the Public Service and the machinery of Government, it is important that they know. If the Minister is prepared to stand up in this Chamber and compare prisons to grocery stores, be it on her own head if other members in this Chamber then make it obvious—

💬 Carmel Sepuloni: Talking about apples and apples, and apples and oranges.

Yes, she was talking about apples and apples, and apples and oranges. It is her own fault if other MPs make sure that that is highlighted for the information of the public. It is, after all, their community. It is, after all, their machinery of the State that is being messed around with by this Government.

There has been a lot of discussion about the economics of private prisons. We know for a fact that private prisons are more expensive in this country. We know from research overseas that there has been a failure of private prisons either to be cheaper or to both return quality services and be cheaper. The United States Department of Justice report that I have referred to in other contexts, Emerging Issues on Privatized Prisons, clearly showed that the privatisation models simply mimicked the public sector in practically every way, essentially saying that there was no innovation at all in the private sector. All of the new innovation and all of the new ideas were coming out of the public sector, and they were simply mimicked by the private provision.

The report also said that promises that were made by private companies in the US of 20 percent savings did not happen. Those savings were not provided, despite all of the promises. Although there were some modest savings of less than 20 percent, they were made by reducing staff conditions and other labour-related costs. The Minister said earlier that one of her priorities was keeping staff safe, but we know that the policy of the Minister and the Government includes double-bunking, for example. She is now engaging with private prisons, where staff will find it more difficult to work in an environment where their conditions and their pay are the priority. They will not be the priority for the private company; the bottom line will be the priority for the private company. The way the company gets access to a bigger bottom line, to more profit, will be hidden from the public. One of the things that will be hidden from the public is the staffing conditions and wages.

We can see that that is the case not only in the evidence from the United States Department of Justice but also in reports from Australia. The “Privatisation and New South Wales Prisons: Value for Money and Neo-liberal Regulation” report showed that privatisation in New South Wales did not result in value for money or a significant reduction in cost. So even closer to home, just in Australia, we know that the economic arguments do not pan out.

David Garrett was yelling out earlier about how staff of the GEO Group - run Auckland Central Remand Prison brought to the select committee views and information that there was hiding of their contractual requirements in order to avoid getting fines and penalties for failing to meet those requirements. He said there was no evidence.

I move, That the question be now put.

The CHAIRPERSON (Lindsay Tisch): The question is that the question be now put.

I raise a point of order, Mr Chairperson. I was out in the lobby when I heard the closure motion being moved by the Government. It is standard practice for the Government to begin to move closure motions, but the House is in urgency on this matter. We have completed Part 1 in Committee faster than we would have done under ordinary time for a bill where the main policy decisions are in Part 1. Under urgency normally there is a longer period for the Committee to consider that part of a bill. This is faster than normal.

I certainly thank the member for his comments, and I have taken them into account. We have gone for an hour and 43 minutes on this. I have a list of who has spoken. There has been a lot of repetition; there has not been any new material that has come out in the last 40 minutes. I decided to accept the closure, and I have put the motion.

I raise a point of order, Mr Chairperson. I realise that you have to take into account a number of factors.

The CHAIRPERSON (Lindsay Tisch): I have ruled.

There are members who have been calling who have not had the chance to contribute to the debate.

The CHAIRPERSON (Lindsay Tisch): I understand, but I have ruled. We have Part 2 coming up, and then we have the other—[Interruption] I have ruled! We have Part 2, we have the commencement, and the other debates are still to continue.

I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Lindsay Tisch): I hope you are not going to litigate the decision I have made.

I am reluctant to do it, but we are in urgency. I think you have truncated this bill; all of the policy decisions are in Part 1. I move, That the Speaker be recalled.

Motion agreed to.

House resumed.

Speaker Recalled