English says NZ$1 bln capital cost and NZ$1.5 bln of operating costs for extra 1,800 prison beds reduces room for tax cuts; English, Key say no need for population policy and migration good for economy

By Bernard Hickey

Finance Minister Bill English has warned an announcement today of plans for an extra 1,800 prison beds will reduce the room for the Government to consider tax cuts before next year's election.

English told reporters in Parliament the extra beds would cost NZ$1 billion to build and an extra NZ$1.5 billion to run over the next five or six years.

"It will have an impact because it is a very large spend and, two or three years years ago, we probably thought this could be avoidable," English said when asked if the extra spending would make it harder for the Government to unveil tax cuts and other spending before the next election.

"It's all part of this rachetting up of tougher sentences, tighter remand conditions, less bail and taking less risk with people who commit serious offenses," he added.

Asked if that meant there would be less room for tax cuts, he said: "I wouldn't want to judge that because it is a bit early, but certainly spending this kind of money on prison capacity is going to reduce other options."

Earlier Police and Corrections Minister Judith Collins announced the Government would increase prison capacity by 1,800 beds at a construction cost of NZ$1 billion.

Prisoner numbers were growing faster than expected because the proportion of offenders charged with serious crimes has risen, meaning more people are being remanded in custody and serving more of their sentences in prison, she said.

“We have to respond through new investment or we will create unacceptable safety risks for staff, prisoners and the public, and be less effective at rehabilitating prisoners," she said.

The Government had approved an increase in double bunking in the Northland Region Corrections Facility at Ngawha by 80 beds and had approved a new accommodation block to be built at Mt Eden Corrections Facility with an extra 245 beds.

Collins said the Government would consider a business case for a new 1,500 bed facility at the existing Waikeria Prison in the Waikato, which would include the delivery of rehabilitation programmes including Drug Treatment Units, reintegration programmes, education and training programmes and Special Treatment Units to help address violent and sexual offending.

English later told Parliament the Government had no choice but to build the extra beds.

"The courts are sentencing them every week and we've got to have somewhere to lock them up," he said. He was asked in Parliament about comments he made in 2011 about the Wiri prison being the last the new prison the Government would build. He admitted he had got that wrong.

"I do recall saying that and the statement about not building any more prisons turned out to be not correct," he said (in the video above).

English, Key say increased migration good for economy

Meanwhile, when asked about the effects of high net migration on demand for health, education, transport, housing and prison services, English and Key said they saw high migration as a sign of success and good for the economy.

English said he had a positive view about migration. Over the weekend the Green Party launched a migration policy aimed at keeping population growth at 1% per annum, which would imply a halving of net migration from current levels. See more here in our article yesterday.

"We think New Zealand benefits from having people bring both their financial capital and their skills to New Zealand, and we have gaps that need to be filled by migration," English said.

"We haven't got an explicit population policy, but we have a positive view about New Zealand that's open to migration and, as we know, over the decades that fluctuates," he said.

"Sometimes we have quite high levels, as we do at the moment, but the long run average is about a third, long run inflow of people is about a third of what it is at the moment. You would expect over time that is what it would go back to."

Key told his post-cabinet news conference on Monday that migrants were a useful addition to the economy, and needed by employers.

"You have a huge number of employers in areas, particularly tourism related, where there are huge peaks in demand around the summer season, where they’re screaming for workers. And you saw that with horticulture when they couldn't get workers, there were points when fruit was rotting on the vines because no one was there to pick it," Key said.

“So I think they are a useful additive to New Zealand," he said.

Challenged about Reserve Bank comments about high migration moderating wage growth, Key said: "We have had the third or fourth highest real wage growth in the past eight years of any OECD country, so wages are rising in real terms, and rising faster compared with other countries."

'Bigger jails a sign of failure'

Labour Leader Andrew Little described the announcement of extra prisons as a sign of failure, and that a Labour Government would prefer to spend on education and health than on tax cuts.

"I hope our economic development is not now going to be built around imprisoning more people," Little told reporters.

"In the end, prisons are a mark of failure of law enforcement. One of the reasons that sits behind our call for 1000 extra police is that, when you take police off the beat, as this govenrment has done, and you close down community police stations, you remove the deterrant factor that the police have by their presence in the community," he said.

"It's not a success for any country to claim, 'gee, we've got more prisoners, we need more prisons". That's actually a failure. A country managing its economy right, putting in place the right social support and social structures, including a properly and well-resourced police force, doesn't mean you have more prisoners, you have fewer of them - because people see the police presence, communities are safer and more secure," he said.

"If you look at a whole range of areas where there has been underfunding, we know that school operational funding has been frozen, police numbers have been frozen, we've got the health system now $1.7 billion down, failing to keep up with population needs, there are a whole heap of areas where, if you had the means and resources, you'd be filling those gaps before you do tax cuts. My preference is, let's do those things that are about supporting people, creating those foundations for strong communities, good families and job opportunities, before we do tax cuts."

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

38 Comments

so we have to spend more on all sorts of infrastructure and services due to population growth but that is good.
reminds me of an old joke,
guys was selling pumpkins on the side of the road for a dollar and wondered why he could not make ends meet
went to his banker, who asked what his cost was
he said a dollar
banker said well then you need to sell more

Funny we need more prisons, what are we doing wrong?.

Importing more problems than they are worth.... surely not?.

Statistics show that migrants proportionately form a much lower % of the Prison population than Kiwis do

Something to do with a good character test which may exclude immigrants from becoming residents/citizens if they acquire a criminal record?

Crime rising.... sucide in NZ on rise and our government feels that is a sign of prosperity. When will they understand that rise in inequality give rise to social and racial tension and crime goes up ( if not than why extra bed in prision). Also heard that sucide in NZ is on rise.

How can alll this be good for average kiwi. May be by NZ our government is talking about their friends and elite like them - high society / rich / speculators.

It's all coming together nicely, now, isn't it? Or is is chickens coming home to roost?

up
10

What a joke English and Key both are. To think, not that long ago, I quite liked them both.
They twist and turn things don' t they.
I'm sure the majority are like me - I see a lot of positives from balanced and well considered immigration (as opposed to the rather indiscriminate mess we have). That's not in doubt, IMHO. But that doesn't mean the current immigration settings are optimal. The evidence is suggesting they are far from optimal.
But Key and English crudely make it sound like all immigration is created equal. And they conveniently ignore the costs of current immigration policy. Would the benefits of current immigration settings exceed the costs? Somehow, I doubt it.

They love high immigration because both of them have the mantra that driving wages down is good for the economy. It might be good for the odd businessman, but it's definitely not good for the overall economy.

Also what happened to Keys much publicized previous claim that he used to make that he was going to close the wage gap with Aussie?, that's definitely not happened, in fact it's got worse under his and the nats watch.
It turns out it was just more of his specialty - which is media spin.
It's hardly surprising though as they are clearly running policies aimed primarily at driving down wages.

too right
Closing the wage gap with Aus,and properly addressing housing costs. Two of his big early promises. Two big failures.

up
13

John Key: State of the Nation speech, By John Key
5:00 AM Wednesday Jan 30, 2008

Has he fixed any of the issues he had with Labour as per his speech below ?

Housing more affordable ? NO
Reduced the wealth GAP with Australia ? NO
Interests Rates no longer one of the highest in developed world ? NO

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10489424
Per John Key in the article:
Well, I've got a challenge for the Prime Minister. Before she asks for another three years, why doesn't she answer the questions Kiwis are really asking, like:

*Why can't our hardworking kids afford to buy their own house?
(Brilliant back when Houses were 500k in Auckland now they are 1million)

Why, after eight years of Labour, are we paying the second-highest interest rates in the developed world?

*Why, under Labour, is the gap between our wages, and wages in Australia and other parts of the world, getting bigger and bigger?

When the going gets this tough, is it any wonder that Kiwis look longingly at our Aussie cousins? Our Aussie cousins, who get paid a third more than us for doing the same job.

So, make no mistake: this election won't be fought only on Labour's economic legacy. National will be asking Labour to front up on their social legacy, too. Many of the social problems the Government said it would solve have only got worse.

This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn't exist. They said there was no underclass in New Zealand.

When Sir Ed climbed Mt Everest back in 1953, he wasn't the only New Zealander on top of the world. We all were. We were among the five wealthiest countries on earth. Not any more.

Fifty-five years on, we are no longer an Everest nation. We are among the foothill nations at the base of the OECD wealth mountain. Number 22 for income per person, and falling.

But what does a wealth ranking matter, you might ask? Why does it matter if we're number 22 or number four?

It matters because at number 22 your income is lower, you have to work harder, and you can save less. You face more uncertainty when things go wrong, when you or your family get sick or lose a job. No New Zealand sports team would be happy to be number 22. Why is the Government?

This is a great country. But it could be so much greater. It has been so much greater.

Key's speech sounds like a Trump one, make NZ great again!

Make NZ great not sure but definitely §peculators and non residents, he is a messiah with his thought and policies.

Written by the same PR slimebags, believed by the same idiots.

this quote sums it up for me as his biggest failure

I want to leave New Zealand in better shape than I found it. I know the job of prime minister is not forever and I'm going to do the best I can every day to make that difference. John Key
www.brainyquote.com/quotes/authors/j/john_key.html

It's feeling like forever.

up
12

"I want to leave New Zealand in better shape than I found it "

Not sure the below means NZ is in a better shape now that before he was PM

More Prison Beds ... tick
More Homeless .... tick
More Income Inequality ....tick
More Housing Affordability Issues ... tick
More Debt.... tick

None of them get it. Little too. The need for more prison beds is because of a fundamental failure of socio-economic policies since the early 80s. A report a little while ago identified that in the 70s, 60+% of the population was employed in "low skilled" jobs. Those people were the average and below in any population. They could earn a decent living then. Those jobs and opportunities don't exist today. More education will not help the average person, just increase competition for a smaller pool of jobs with not necessarily better wages.

Our Government needs to focus on creating real jobs at a decent pay rate, and make sure that living costs are affordable. this requires regulation and governance - not a head in the sand attitude.

I believe the cost of each prison bed is now far greater. In the old days they packed something like twelve prisoners into a cell that now only holds one. A huge amount of resource also goes into rehabilitation programs and materials.
With zero or even negative natural population growth most Western nations could have easily solved all unemployment and low wage issues with good planning and advanced technology.

I think the rise of technology and the disappearance of jobs as we think of them will be beyond the ability of any government to do much about. It is going to take a whole shift in thinking for us to get through this one as I don't think sufficient meaningful work will arise to replace them.
Strange times are ahead, I just hope we don't revert to war to sort it out, but I would not be putting money on us not.

Working for the government, even at a local level is about as good a job as you can get today and there are a lot more job's too. Called careers information, have you got an occupation, Teacher, nurse, health and safety, Nait, traffic control, ministry of Primary industries, customs, police and on and on. There was a checkpoint last night and he didn't crack a smile, just breath into here, if we are not careful you will rather be anywhere else but here.

Thanks to high immigration our economy has a high GDP. We have a$1.8 billion surplus. Yay!!!
We enlarged our population by 180,000 in just 3 years.
Unfortunately the 180,000 people didn't bring roads and bridges and hospitals with them. The taxpayer has to build and pay for the infrastructure needed to support this population growth. The $1.8 billion surplus just evaporated with the government realizing that the population growth has resulted in a need for 1,600 prison beds. What a surprise, who could have seen that coming? We also need more schools, more health services, more roads, more police, more,more and more everything.
Yes this does create jobs, jobs that the taxpayer pays for. This does not create wealth for the country. Exports create wealth.

Particularly in Tourism we need Migrants ? I read an article not so long ago - Tourists want to be with a local kiwi guide, so they get a true feel of the place. They otherwise feel they arent getting the true Kiwi experience. Based on my own experiences, Id agree with this.
Come on JK... The bollocky bollocks train is wearing really thin.

I recently had a young American guide showing me the sights of Berlin on a four hour walking tour. I was disappointed that he wasn't German. He told me off for asking if the abandoned Tempelhof Airport was safe to visit now that it was housing refugees.

try finding a kiwi guide or instructor in queenstown, my favourite is when they ask if there is a kiwi present not stepping forward and quietly chuckling as they mangle our history or stories about our national birds and plants
the kiwi ones I do meet take great pride in presenting our country its just a shame there are not more of them but understandable as the pay is not good so most are in study or trying to earn a bit for study

Not so many years ago I stayed at one of the more prominent Rotorua Motels. The staff were predimantly young Maori. Was there last month...mostly Indian. Nice chaps who were excellent ... but they were barely off the plane.

Here Here Murray86

Step 1: create policy that increases inequality thereby increasing poverty.
Step 2: build extra prisons at huge expense to taxpayer to lock up said poor people.
Brilliant!

On a side note, try not to listen to Bonecrusher Collins being interviewed on RNZ in the morning, it will not brighten up your morning and in fact may lead to some anger. Quote, “if people didnt comit the crimes, then we wouldnt have to lock them up”. Incredible insight and nuance there Judith.

This is rather typical National stuff. When they are in government they just let the social services wind down and now we are facing the huge social costs - poverty, inequality, community disintegration. Unfortunately, if Labour wins the next election they will think that it's 2008 again and the reasons they lost was just we the voters didn't understand their message. I think people are sick of ideological governments that are blind to realities that many face. We have kids sleeping in cars and this government is thinking about tax cuts - what kind of society allows that? Labour unfortunately thinks that more hard-left medicine will cure the injuries that the hard-left inflicted on people. We need to strengthen families and not weaken them and that is the only cure. And by family I mean mum and dad in a stable long term relationship (marriage) with children. But this will take sacrifice which is not a fashionable word these days.

And by family I mean mum and dad in a stable long term relationship (marriage) with children.

These folk don't usually need help as they are strong already.

You are right to a degree but there are a lot of working families that are doing very tough especially if they are low skilled. Also I mean our policies need to encourage families in the first place. So much of economy and society discourage family life. These include such things as welfare structures, inflexible work and education as well as general societal disdain for family and children. A society that does not have children is not sustainable.

Time to review our silly drug laws. This is why we have the crime and the meth problem. We have killed off the local industry (dope growing) in exchnage for cheap Chinese meth. Sound familiar?

Look to Portugal for some enlightened drug policy (and no I aint a user).

That is precisely what happened.

Even local criminals are being displaced from the drug industry. Wonder what they'll get up to instead?

The locals become the muscle and street dealers..Bottom of the food chain who take most the heat and end up inside i.e Maori and Polynesian.

That's pretty much the way it's gone so far, and there are alliances going back 20 years. But gets to the point that the locals aren't needed or wanted any more, and then what? Things will get very interesting if they start to fight back.

This announcement of a surplus and then the prison cost is just the National party marketing machine in action. Next you here Bill English blaming the courts for the new prison just the way he blamed the Auckland CC for housing crisis.

At some point as a government you have to take responsibility for failure. New Zealand is failing and youve got a government who wont take any responsibility.

I read this the other day and it seems appropriate for the National government. "Leadership that isn’t responsive and responsible to all members of society really isn’t leadership at all".

So is Bill English now also responsible for the actions of drug dealers , common criminals and Meth producers?

govt's solution to housing crisis - more prison beds

Onwards into the glorious future.

https://en.wikipedia.org/wiki/The_Cop_and_the_Anthem