Jails do not equal good economic sense

It doesn’t take an economic genius to work out that one of the least productive places on a Monopoly board is the “go to jail’ space, which makes the Victorian Premier, Ted Baillieu’s recent announcement of more than 1000 new jobs within the Victorian prison system as an economic stimulus measure all the more puzzling.

Without a doubt, job creation of any kind will provide some measure of economic stimulus for those people who are employed and the places where they choose to spend their wages.  Such an initiative however fails to take into account the economic costs associated with creating and filling more prison beds.  A true analysis of the costs of this initiative must not only take into account the day to day costs of running additional prison beds, but must also examine the economic costs connected with the poor health outcomes associated with imprisonment and the added burdens this places upon the Victorian taxpayer.

According to a position paper released by the Victorian Alcohol and Drug Association in the lead up to the 2010 Victorian state elections:

  • In 2008/09 prisons cost an average of $242.65 per offender per day, or around $88,000 per year.
  • 35 per cent of prison entrants tested positive to hepatitis C, 21 per cent tested positive to the hepatitis B and less than 1 per cent tested positive to HIV.
  • an estimated 25 per cent of young prisoners who inject drugs within the system share needles

(VAADA 2010)

Adding these three factors together, it is not difficult to see that prisons are environments that pose a significantly high risk for transmission of infections such as hepatitis C and HIV.  The costs of these health issues are significantly higher than the costs of measures to prevent transmission in the first place.  One such preventative measure would be to look for alternatives to locking offenders up in institutions that so obviously pose a heightened risk of transmission.

Investment in AOD treatment and Harm Reduction

“Research demonstrates that ‘every dollar spent on policies and programs aimed at reducing drug misuse and drug-related harm among offenders, produces a four to twelve dollar return, measured in terms of healthcare and crime cost reductions.”

(National Drug Strategy 2008 cited by VAADA 2010)

By reducing the expenditure involved in extending the number of prison beds, and investing money in AOD treatment and harm reduction activities, as an alternative to imprisonment, Mr Baillieu would not only provide a jobs stimulus for Victorian communities, but also plant the seeds that would reduce Victorian health care costs in the future.


Victorian Alcohol and Drug Association (2010) Drugs, Crimes and Prisons http://www.vaada.org.au/resources/items/2010/07/341324-upload-00001.pdf accessed 13th February 2012

One Response to “Jails do not equal good economic sense”
  1. As far as building prisons goes, my experience is that the process closely resembles the ‘Field Of Dreams’ scenario – ‘if you build it, they will come.’

    It has certainly been the US & UK experience that creating more prison capacity encourages politicians and judges to make sure every cell is full.

    Nature (and penal policy) abhors a vacuum.

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