This is the media release for my research report with the above title.

Over the past decade, Australia has seen an unsustainable rise in the rate and cost of incarceration. Nationally, the incarceration rate is at an all-time high of 217 per 100,000 adults, and prisons now cost taxpayers $4.6 billion every year (including capital costs).

This increase in spending on prisons creates a trade-off with other government priorities, like policing. Six years ago Australian governments spent more than $4 dollars on police for every $1 spent on prisons; today, that figure is $3.40. This pattern is seen in every Australian jurisdiction apart from the Northern Territory. This matters because, like incarceration, policing aims to deter would-be offenders. Indeed, many studies indicate that it performs this task more effectively than prison, because offenders are deterred more strongly by the prospect of being caught than the severity of the punishments that they may face.

International figures show that by the measure of police spending to prison spending, Australian jurisdictions rank in between American states, which tend to spend more on prisons, and the countries of the European Union, which tend to spend less. Australia is moving towards a more American-style distribution, even as the US moves in the opposite direction.

Moreover, high rates of incarceration eventually create trade-offs for other areas of government service delivery. In jurisdictions like Western Australia and the Northern Territory, there are noticeably lower ratios between spending on schools and public hospitals and spending on prisons. Given that education and health are both associated with reduced offending, this trade-off may again be reducing community safety.

Australian jurisdictions can improve community safety by pursuing sensible and safe reforms to reduce incarceration, and redirecting spending to more efficient deterrence and rehabilitation.

Download Report – Skewed priorities: comparing the growth of prison spending with police spending

This is the media release for my research report Cutting costs and reducing reoffending: redesigning private prison contracts for better results.

“Stronger incentives for rehabilitation can improve private prisons and lead to reduced reoffending, less crime, and lower costs for taxpayers,” said Andrew Bushnell, Research Fellow at the free market think tank, the Institute of Public Affairs.

The IPA today released a new research report on private prisons in Australia. Eight of Australia’s 98 prisons are operated by private companies. These prisons house an estimated 18 per cent of Australia’s prison population. The report, Cutting costs and reducing reoffending: Redesigning private prison contracts for better results investigates recent moves by governments in Australia and overseas to include incentives for reduced reoffending in private prison contracts.

“Recent independent reviews of private prisons in Victoria and Queensland found substantial savings for taxpayers from prison privatisation,” said Mr Bushnell.

“Along with costs, policymakers also need to consider how private prisons can be most effective in reducing reoffending, which is one of the main drivers of the massive increase in incarceration and related costs that we have seen across Australia in recent years.”

Australia’s incarceration rate is at a record high of 222 per 100,000 adults. Nationally, taxpayers spend more than $15 billion per year on criminal justice, including $4 billion on prison running costs. Despite this expenditure, 46 percent of released prisoners return to prison within two years of their release.

“The introduction of incentives for reduced reoffending is a positive step for private prison contracts. But our research indicates that the existing contracts are likely not optimised for getting the results that we all want,” said Mr Bushnell.

“The performance components of the contracts needs to be more substantial, and should be connected to simple, transparent measures.”

The paper makes a number of recommendations for strengthening private prison contracts. These include increasing the proportion of payments to operators that is based on performance, using a bonus model connected to individual prisoners, and standardising measures of performance across all private and state prisons to enable comparative analysis. The report also discusses some of the possible limitations of pursuing this approach.

“Following the recommendations in this report gives this important experiment the best chance of succeeding,” said Mr Bushnell.

Download the report here.