Posts Tagged ‘private prisons’

Questions over Serco’s “independent” monitors and it’s Contract with the Crown

4 August 2015 4 comments


serco logo d


Questions have arisen regarding the  supposed “safe-guards” Monitors at Mt Eden Prison, and at least one aspect of the Serco-Corrections Dept Contract.

According to section 21.2 of the contract between Corrections and Serco, between two to three Monitors were tasked with;

(a) compliance with this agreement;

(b) the accuracy of the Contractor’s invoices or reports relating to the Services;

(c) processes and procedures of the Contractor or any subcontractor relevant to the provision of the Services;

(d) anything else relating to the Services.

Also according to the contract, the monitors were ostensibly appointed by Corrections, though whether they are paid by Corrections or Serco depended on “… if the Service Audit reveals that the Contractor has breached this agreement” (p21.3), in which case “then the Contractor must pay the Crown’s costs in relation to the Service Audit“.

However, on 2 May, TV3’s ‘The Nation’ interview between Lisa Owen and Corrections Minister Sam Lotu-Iiga had this interesting exchange;


Corrections Minister Peseta Sam Lotu-Iiga on The Nation

Corrections Minister Peseta Sam Lotu-Iiga on TV3’s ‘The Nation‘, 2 May 2015


Owen: Okay, well, who’s monitoring their performance? Who makes sure that they reach their targets and that they’re assessing themselves fairly?

Lotu-Iiga: Okay, they are actually more scrutinised than any public prison. They’ve got two monitors— there will be two prison monitors in each of the prisons.

Owen: Who employs those monitors? Who employs the monitor in the prison?

Lotu-Iiga: There will be— If I can just finish, there will be an ombudsman. They will be subject to complaints—

Owen: So the monitor in the prison, Minister, just to be clear, the monitor in the prison; who employs the monitor?

Lotu-Iiga: My understand is that the monitors are based in the prisons, but they report to the Department of Corrections.

Owen: Who employs the monitor and pays their wages, Minister?

Lotu-Iiga: Well, I don’t have those facts on me, but they do report—

Owen: Well, I do. The person who employs the monitor— the person who employs the monitor is the company, Serco. They employ the monitor, and pay their wages.

Lotu-Iiga: Okay, can I just finish—

Owen: So how is that an independent analysis?

Lotu-Iiga: Well, they’re reporting to the Department of Corrections. We have the ombudsman as well. We have the chief inspectorate, if I can say, the chief inspectorate is based in the Department of Corrections. They will be also subject to the scrutiny and the questioning and the examination through the chief inspectorate. That is no different, can I say, to any other prison.

Owen: But you’ve just told me that they’re going to have a higher level of assessment monitoring—

Lotu-Iiga: Well, they do.

Owen: —by saying that they’ve got this person in the prison. But they’re actually employed by the people who run the prison.

Lotu-Iiga: They’re employed by Serco, but they are reporting back to, as I’ve just said, someone in the Department of Corrections. So they’ve got not only two monitors, they’ve got the ombudsman, they’ve got the chief inspectorate and also the office of the Auditor General. That’s no different to any other prison in this country.

Whoever employs (employed?) the Monitors at Mt Eden, they do not appear to have forwarded Incident Reports of violence and other criminal activity taking place at the facility. The prompt forwarding of Incident Reports is also a prime feature of the contract between Serco and Corrections;

22.2 Incident reporting requirements:
If an Incident occurs, the Contractor must report the Incident in accordance with the requirements set out in Schedule 5.


Schedule 5
Appendix 1

Immediate notification to “Incident Line” (04) 473 1745 anytime day or night, followed by IOMS incident report (or in the event of IOMS being unavailable an E.08.01.F1 Notification of  incident form (which is contained in the Department PPM)) within 2 hours of the incident being advised.

The prevalence of violence (including alleged  “dropping”); “fightclubs”;  injuries; at least one death; drug use; home-brew production*; contraband such as cell-phones; and now three prisoners arrested for involvement in gang-related drug activities – does not seem to have impacted on Mt Eden’s high ranking on Corrections’ Prison Performance Table – the most recent being for twelve months ending March this year;


Mt Eden prison - prison performance table - corrections department - serco

(Hat-tip: Martyn Bradbury, for above chart)


Since April 2014, Mt Eden has rated “Exceptional” in previous performance grades. It’s rehabilitation rates at 96.75% – which in itself is odd, as Mt Eden is also a Remand Prison, and 676 out of 952 prisoners (as at 31 December 2014) are on remand; awaiting trial;  and have not been convicted of any crime.

It is fairly obvious that as more and more stories of violence and other criminal activity emerge, Serco’s statistics cannot be taken at face value.  As the Herald’s David Fisher reported on 27 July;

Serco had previously been rated at the highest levels of safety despite the allegations of violence inside Mt Eden prison. It was contracted to carry out its own performance management reviews – and was also responsible for telling the Department of Corrections when its pay should be docked.

One means by which assault figures could be ‘fudged’ by Serco was illustrated by Fisher in the same report;

Over the past week, cases have emerged of prisoners being transported from the Serco prison to other institutions arriving with serious injuries.

The Weekend Herald reported a case in March this year in which a prisoner sent to Manawatu prison was found to be needing urgent hospital care when he arrived.

There are  six questions that beg to be answered by the various inquiries currently under way;


Why did the Monitors at Mt Eden not report incidences of violence – including one death – as well as other criminal activity? Monitors were tasked with reporting untoward events such as assaults to the Corrections Department. Why was this not done so?


Considering the assaults, drug taking, and other other instances of illegal activity taking place at Mt Eden, how could that facility gain a high “Exceptional” rating on the Prison Performance Table? Do Corrections Dept officials, and the Corrections Minister have faith in the accuracy of Prison Performance data? And why did the Monitors not challenge those high rankings?


Why did the Monitors not report that injured prisoners were being transferred out from Mt Eden to other correctional facilities? Why did they not advise the Chief Executive of Corrections (Ray Smith) that by transferring out injured prisoners, that this would inevitably result in favourable statistics for Mt Eden.


Who were the Monitors directly responsible to; Serco or Corrections?


Was there a deliberate, organised policy of silence, between Serco, Corrections Dept, and Minister Sam Lotu-Iiga’s office, to suppress reports of violence and other criminal activity at Mt Eden, because otherwise disclosure of the truth would damage the credibility of this government to pursue it’s agenda for further privatisation of services?


There is provision in the contract between Serco and Corrections for a good faith relationship between the parties;


In recognising the significance of the relationship between the Crown and the Contractor from an operational and contractual perspective, the parties agree to work cooperatively and collaboratively.

The parties will:

(a) ensure that their communications are open and honest;
(b) proactively raise, and respond to, issues with a view to prompt and efficient resolution;
(c) take a constructive and open minded approach to points of difference; and
(d) treat each other with respect at all times.

The degree to which Serco has with-held information from it’s partner – the Crown – should be seen by many as being far from “open and honest“; has failed to “proactively raise, and respond to, issues“; and certainly not treated the Crown “with respect at all times”.

So why is Schedule 1 not grounds to break the contract with Serco?

Not only has Serco apparently circumvented the spirit, as well as the intent, on their contract with Corrections, but it has apparently connived to suppress information, as Kim Vinnell reported for TV3 on 24 July;

There are fresh revelations private prison operator Serco went out of its way to make sure its squeaky clean record stayed that way.

In Mt Eden prison where inmates are king, are guards who say they’re understaffed and afraid.

“It’s about time we all spoke out and say what it’s actually like,” says one guard, who spoke to 3 News on the condition of anonymity.

He says when prisoners or guards break the rules, management would rather official reports tell a different story.

“You’re told to state the facts, but to leave all other things out of it.

“They go missing off the system several times, or they get edited and you’re not told that they’re edited.”

The Government says it didn’t know what was going on, despite the fact three prison monitors – who are Corrections employees – have been there since Serco’s first day.

Under the Corrections Act, prison monitors must report to the chief executive at least every four months. The sole purpose of their job is to report on prison management and any concerns they may have about the prison’s running.

The government claims “it didn’t know what was going on“.

In which case, not only was the Correction Minister’s office kept in the dark – but also the entire Corrections Department. Is this feasible?

It is inconceivable that National Ministers did not know the depth of problems afflicting Mt Eden and Serco.

In which case, this government was actively complicit in a cover-up, to protect it’s credibility with voters – and to  safeguard it’s privatisation agenda.

This scandal may yet engulf the government and bring it down, forcing an early election.





* Note: Home-brew involves fermentation to produce alcohol. The process creates carbon dioxide and strong odours. How is it that staff at Mt Eden could not smell fermentation processes within the facility?






Email to Corrections Minister, Peseta Sam Lotu-Iiga, on 28 July;

Kia ora Minister  Lotu-Iiga,

I am querying the appointment on Monitors for Mt Eden Prison, which up till yesterday (27 July), was managed by Serco.

Can you please advise  regarding the following;

1. Who employs the Monitors? Is it Serco or the Corrections Department?

2. Who do they report to; Serco or the Corrections Department?

3. Who pays their salaries; Serco or the Corrections Department?

4. Are the Monitors responsible for providing information to Corrections, which forms the Prison Performance Table? If not, who provides that information?

5. Are the Monitors still employed at Mt Eden? If not, why not?

6. Have the monitors made any Incident Reports to Corrections, as required Prison under the Management Contract for Mt Eden Corrections Facility (para 22.2). If so, what Incidents were reported and when?

Please respond asap to this OIA request, as this is a matter of some urgency.

A response from  Minister  Lotu-Iiga’s Private Secretary acknowledged  my email on the 29th, advising;

As the information you have requested is held by the Department of Corrections, I have transferred your request to the Department. This decision is in accordance with section 14 of the Official Information Act 1982.

The Department is required to provide you with a response within 20 working days of receipt of my transfer letter.

It is likely that Corrections Dept will use a provision within the Official Information Act to request an extension to the 20 Working Day time-limit.


Schedule 11 (Information Requests) of the Serco-Corrections Dept Contract, stipulates;

Official Information Act (OIA) requests

These can often be requested by journalists wishing to probe deeper into issues they believe the public may be interested in. Requests under the OIA are managed within the statutory timeframes described in the legislation – this is generally 20 Working Days for a response.

OIA requests, by law, must be facilitated as soon as possible. The “20 Working Days” option is a maximum – not a target response time to work to.

Part 2, Section 15 of the Act clearly and explicitly states that responses to OIA requests “shall, as soon as reasonably practicable, and in any case not later than 20 working days after the day on which the request is received” be “given or posted to the person who made the request notice of the decision on the request“.

It is unclear how the Serco-Corrections Dept Contract complies with requirements contained within the Official Information Act to provide responses “ as soon as reasonably practicable“.


Considering that the Schedule 11 (Information Requests) of the Serco-Corrections Dept Contract, appears to contravene the spirit, intent,  and letter of the Official Information Act (Part 2, Section 15), I wrote to the Office of the Ombudsman to seek their advice;

Kia ora,

I understand that your Office has been looking into a possible actions by various government Ministers to willfully and deliberately delay replying to OIA requests. Part 2, Section 15 of the Official Information Act states that responses to OIA requests;

“…shall, as soon as reasonably practicable, and in any case not later than 20 working days after the day on which the request is received” be “given or posted to the person who made the request notice of the decision on the request“.

I have recently been looking into the Prison Management Contract for Mt Eden Corrections Facility   that applies between the Corrections Dept (acting on behalf of The Crown) and a private company, Serco.

Schedule 11 (Information Requests) of the Serco-Corrections Dept Contract, stipulates;

Official Information Act (OIA) requests

These can often be requested by journalists wishing to probe deeper into issues they believe the public may be interested in. Requests under the OIA are managed within the statutory timeframes described in the legislation – this is generally 20 Working Days for a response.

It is my contention that the Contract’s reference to “Requests under the OIA are managed within the statutory timeframes described in the legislation – this is generally 20 Working Days for a responseis counter  to the spirit, intent, and letter of the Official Information Act.
The Act clearly states that OIA requests should be actioned “as soon as reasonably practicable” and that “20 working days” is a maximum time limit, not a target time-frame to work toward.
In your view, is the Contract accurately reflecting the Official Information  Act?
If not, how does that impact on the legality of the Contract itself?
I would welcome your advice on this matter.
This blogger will keep readers advised on further developments.





Corrections Dept: Prison Management Contract for Mt Eden Corrections Facility

Scoop  media:  The Nation – Corrections Minister Sam Lotu-Iiga

NZ Herald: Head Hunters raids – Police investigating former Mt Eden prison guard

Corrections Dept: Prison Performance Table

NZ Herald: Serco docked $565k over violence in prisons

Corrections Dept:  Prison facts and statistics – December 2014

TV3: Mt Eden prison guards ‘understaffed, afraid’ Official Information Act 1982

Previous related blogposts

The closure of three prisons and loss of 262 jobs – five issues for the National govt

“The Nation” reveals gobsmacking incompetence by Ministers English and Lotu-Iiga

Letter to the editor – If Serco was the answer, what was the question?

On private prisons




corrections - serco - private prisons


This blogpost was first published on The Daily Blog on 30 July 2015.



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So what is the rationale for private prisons?

1 August 2015 3 comments


Justice not for sale logo


On 14 December, 2010, there was great excitement and jubilation  in the Beehive when then-Corrections Minister Judith Collins announced;

This Government is committed to a world-class Corrections system in New Zealand. To achieve that, we must have access to world-class innovation and expertise.

The appointment of Serco as the contract manager for Mt Eden/ACRP will bring in new ideas and international best practice which will benefit the entire corrections sector.

Serco has a strong track record in managing prisons. I’m confident that the company will bring the high standards of professionalism, safety, rehabilitation and security expected by the Government to Mt Eden/ACRP.”

(Acknowledgement: TV3 The Nation and  )

The rational for the gradual privatisation of our prisons – traditionally the responsibility of the State – was to provide “ a world-class Corrections system in New Zealand“; to “bring in new ideas and international best practice“, and implement “high standards of professionalism, safety, rehabilitation and security“.

According to National/ACT ideology, Private is better.

On 21 July, nearly five years after Collins’ gushing endorsement of Serco, Labour’s Kelvin Davis revealed to the country a series of events at Mt Eden – nominally under the “control” of Serco;

Speaking first in the heated debate, Mr Davis claims that Mt Eden prisoners with severe injuries had been transferred to public prisons so that the cases did not show up in Serco’s assault statistics.

He told a story of a prisoner named only as Evans who arrived at Ngawha prison in Northland with a punctured lung.

“He was in such bad shape that almost immediately the guards at Ngawha transferred him to Whangarei Hospital where he subsequently passed away,” Mr Davis said.

Since then, we have seen video-clips on social media showing fight-clubs and drug-taking, as well as  stories of extortion, “dropping”, rape, etc, etc. Mt Eden prison is so badly run that the Corrections Dept will take control of the facility today (27 July).

Not since the collapse of Air New Zealand, and hasty re-nationalisation by the Clark-led Labour government in October 2001, has the State had to step in to salvage an organisation from mis-management and chaos.

Since then, our esteemed Prime Minister has made several statements, attempting to minimise the violence and drug-taking at Mt Eden;

And so the point will be, I think what it will show is on reported instances , that SERCO ‘s about consistant with the others [prisons]… as far as sexual assaults and violent assaults, I think you’ll see Mt Eden’s pretty similar to the other prisons.” – TVNZ Q+A, @ 2.50


Mr Key defended National’s prison privatisation policy, saying that violence was not limited to private jails. – NZ Herald

Now here’s the salient point which our esteemed Prime Minister, Judith Collins, Corrections Minister Sam Lotu-Iiga, and other National MPs and Ministers might care to ponder:

1. If, as Key, et al, assert, that “violence was not limited to private jails” and “Mt Eden’s pretty similar to the other prisons” – then what is the point of privatisation of prison services if private providers are no different to State administration?

2. Why are we, the tax-payer, paying huge profits to a company like Serco, if “violence was not limited to private jails” and “Mt Eden’s pretty similar to the other prisons“? What, exactly, are we paying for?

3. If Private Prividers are no better than the State at running correctional facilities – why not cut out the “middle man” (Serco), and simply invest the profit that would have gone to the corporation, for more drug rehabilitation; literacy courses; skills training; and comprehensive re-integration into society?

Because if there is no difference to the Private or State management of our prisons, then giving hundreds of millions of tax-dollars to Serco makes no sense.

None whatsoever.






One of the claims that had been made, I think, was that someone had been thrown off a balcony – in fact, actually, Serco say that the person jumped off the balcony, or tripped, or fell.” – John Key, 23 July 2015

Really, Mr Key?

So the prisoner picked himself up and threw himself over the balcony, for no apparent reason? Or “tripped”? Or “fell”?

I am reminded of the tragic fate of many anti-apartheid activists in South Africa, during the apartheid years;

More than 100 other people suspected of anti-apartheid activities died in security police custody in South Africa and tribal homelands. In some cases, authorities said the suspects died of natural causes, however implausible. A larger number were reported to have hanged themselves. Others “fell down stairs” and died. Or fell out of windows and died. Or were “injured in scuffles.” Or “fell in shower.” Except for Dr. Neil Aggett, a 29-year-old physician who became a trade union official, all the dead detainees were black.

What say you now, Mr Key?






References Mt Eden/ACRP contract manager announced

NZ Herald:MP: ‘Ill’ prisoner died after ‘dropping’

National Business Review: Corrections snatches Mt Eden Prison back from Serco

World Socialist Website: Another airline crisis—the case of Air New Zealand

TVNZ Q+A: TPP and National Party’s future – PM

NZ Herald: Serco hauled before minister

Fairfax media: Corrections Minister looking at options for Serco-run prisons after allegations of ill-treatment

Baltimore Sun: Biko and the goons of state security Power – The reopened case of Steve Biko

Previous related blogposts

The closure of three prisons and loss of 262 jobs – five issues for the National govt

“The Nation” reveals gobsmacking incompetence by Ministers English and Lotu-Iiga






This blogpost was first published on The Daily Blog on 27 July 2015.



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Letter to the editor – If Serco was the answer, what was the question?

28 July 2015 3 comments


Frank Macskasy - letters to the editor - Frankly Speaking


from: Frank Macskasy <>
to: Dominion Post <>
date: Sun, Jul 26, 2015
subject: Letter to the editor


The editor
Dominion Post


Our esteemed prime minister, John Key, recently made statements minimising Serco’s mis-management of Mt Eden Prison.

On 26 July, on TV1’s Q+A, Key said,

“And so the point will be, I think what it will show is on reported instances , that SERCO ‘s about consistant with the others [prisons]… as far as sexual assaults and violent assaults, I think you’ll see Mt Eden’s pretty similar to the other prisons.”

And in the NZ Herald, on 23 July, Key was reported;

Mr Key defended National’s prison privatisation policy, saying that violence was not limited to private jails.

If, as Mr Key maintains, there is no appreciable difference between privately managed or State-run prisons – then what is the point of contracting Serco to run Mt Eden and Wiri Prisons?

Why are we taxpayers paying out hundreds of millions of dollars of our money to a private company, when, as John Key tells us, “Mt Eden’s pretty similar to the other prisons”?

What is the point in  paying this company to do a job no better or worse than our own Corrections Dept?

In fact, there seems to be no point.


-Frank Macskasy



[address and phone number supplied]



= fs =

On private prisons…

25 July 2015 1 comment

From John Oliver in the United States, this piece on privatised prisons seems apropos…




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“The Nation” reveals gobsmacking incompetence by Ministers English and Lotu-Iiga



the nation_logo


If there is a crystal-clear example why a functioning democracy must have  vibrant, critical current affairs programmes on free-to-air televesion, then  TV3’s ‘The Nation‘ on the morning of 2 May was top-of-the-pile. Without doubt, this land-mark episode was a powerful insight into the general competence (or lack, thereof) of two of the government’s senior ministers; Finance Minister Bill English and Corrections Minister, Peseta Sam Lotu-Iiga.



Corrections Minister, Peseta Sam Lotu-Iiga -- TV3's 'The Nation' host & interviewer, Lisa Owen -- Finance Minister Bill English

(L-R) Corrections Minister, Peseta Sam Lotu-Iiga — TV3’s ‘The Nation’ host & interviewer, Lisa Owen — Finance Minister Bill English


The highly talented host-interviewer, Lisa Owen, interviewed both, drilling deep down, and extracting information; admissions; and more critically – waving aside pathetic attempts to fudge legitimate answers. The resulting exchanges did not make for a ‘happy day’ for either government minister, revealing one totally out of his depth, and the other unwilling to admit that his stewardship of the country’s economy has been an abject failure.

1. Finance Minister Bill English

In  the opening months of World War 2, there was a period from September 1939 to May 1940, known as “the Phoney War“. Both the Allied Nations (led by Great Britain) and the expanding Third Reich were technically at war, but major military operations did not commence until Nazi Germany invaded Belgium, the Netherlands and Luxembourg on 10 May 1940.

In New Zealand, we might have referred to those first eight months as a “Clayton’s War” – the war you’re having when you’re not really having a war. (For those old enough to remember, “Clayton’s” refers to a non-alcoholic beverage marketed in New Zealand in the 1970s and 1980s. It was heavily promoted with the catch-phrase, “the drink you have when you’re not having a drink”. The marketing campaign was an advertisers dream-come-true, catching the public’s attention. The product, unfortunately for the manufacturers, was less successful. )

The same could be said of New Zealand’s so-called “rock star economy” and “recovery”.

By nearly all accounts, our recent growth has been predicated on three factors;

  1. The Auckland housing boom/bubble
  2. The Christchurch Earthquakes re-build
  3. Exports – particularly dairy – to China

The first is reliant purely on borrowing from off-shore to fund speculative activity. When that bubble finally bursts, we will be left with a multi-billion debt; thousands of bankruptcies; and an economy in tatters as capital flight takes place.

The second is a short-term growth-spurt which owes it’s origins to two natural disasters – literally disaster capitalism.

The third is built upon China’s unsustainable growth, and has recently fallen away, returning Australia as our number one trading partner, as the value of dairy commodities plummet.

The first two are unsustainable. The last is reliant on a major trading partner’s economic well-being. As with New Zealand’s lamb and butter exports to the UK prior to it joining the EEC in January 1973, we have placed our export “eggs” in one, very big, very fragile, basket.

Against this backdrop of The Phoney Economic Recovery,  the following financial facts should give us cause for concern;

  1. The on-going cost of the 2009 and 2010 tax-cuts, estimated to be around $3.8 billion per year, and up to $4.26 billion last year
  2. Plummeting dairy prices resulting in lower payout to farmers and taking $7 billion out of the economy
  3. Reduced tax-take by the government is around $4.5 billion

In view of unsustainable tax-cuts in 2009 and 2010; the economy taking a $7 billion “hit”; and lower than anticipated tax revenue by this government, it was hardly unexpected that Bill English’s promises of a surplus this year have collapsed.

Lisa Owen challenged the hapless Finance Minister in a sixteen minute long interview. In this excerpt, English is evasive when asked questions about the governments surplus;



Full interview here

Throughout the interview, English was upbeat and insisted that a surplus was just around the corner;

“Well, okay, it would be nice if the number got there this year; it’ll just take a bit longer. What’s important here is the trajectory. So Government is closing its deficits; it’s getting to surplus. We’ll soon be in a position to start paying off debt. Our expenditure’s under control; the revenue’s a  bit harder. You’ve just seen in the last day or two, dairy prices are going down again; that has an impact. So we’re sufficiently confident in the direction that we’re not going to cut services or cut entitlements to try and chase a larger surplus number.”

Lisa Owen asked the Minister: “Okay. Well, before on The Nation, you said that the Government would not make any cuts to reach surplus. Is that still your plan?

English replied;  “That’s right. We’re not going to make any specific extra decisions now just because our tax revenue’s a percentage point – 1% down.”

Then, incredibly, English maintained that tax-cuts were still on National’s agenda;

Owen: “I just want to look at some of the big promises, like tax cuts. They were meant to come from that $500 million that you now don’t have. But is it fair to say that they’re not really likely now?

English: “As we indicated last year, we wouldn’t be able to contemplate that until 2017 for some of the reasons that you’ve outlined. So at the moment, the ability to deliver some kind of moderate tax cut hasn’t changed and we would have the next couple of budgets to work out how that would happen.”

Owen: “Hang on, Minister. It has changed, hasn’t it, Minister, because you’ve just identified the fact you’ve got less money, so it must have changed.

English: “Well, we’ve shifted the money from next year to the year after; that’s technically what’s actually happened. We’ll deal with that as time goes on, but the point I’m making is our finances are-“

Owen: “Is it likely that your tax cuts then will be delayed as well? Maybe 2018, not 2017?

English: “No, we’re not suggesting that. We said at the end of last year that they would be possible in 2017. We’ve made allowance for that.”

It beggars belief that we have a Finance Minister willing to entertain the notion of tax cuts at a time when dairy prices are dropping; tax revenue is falling; and public debt has ballooned to $59.9 billion  and rising by $27 million per day, every day.


public debt - NZ Treasury


Never mind tax cuts – when do we, as a nation, start to repay this debt mountain?!

The reality is that if National proceeds with promises of tax cuts in 2017 (which is an election year – bribe anyone?) New Zealand will have to  borrow from offshore to make up the shortfall in revenue. Our debt mountain will continue to grow.

English himself admitted that the deficit this year will be in the order of around half a billion dollars;

“…It is what it is, and that is for the 14/15 year, we budgeted $370 million surplus. It looks like it will be a $500 or $600 million deficit, and the surplus will be the next year. So we’re on track.”

Somewhere in National’s gross mis-management of the economy, they have gone from a $370 million surplus to a potential $600 million deficit – just shy of $1 billion lost.

How does a government make such a colossal mistake? “It is what it is” is hardly an explanation.

Throughout the interview, English kept repeating the mantra of a future surplus;

“The direction is pretty clear. Our surpluses will come and they will grow, and we’ll be able to pay off debt.”

“The target remains getting to surplus, and in the Budget, you’ll see the details of where the Government is up to with it. But I’m indicating that despite falling a bit short in 14/15, we’re on track for surplus.”

Though English insisted that there would be no cuts to spending, he did use coded language for possible reductions to welfare spending;

Owen: “Is it likely that your tax cuts then will be delayed as well? Maybe 2018, not 2017?”

English: “No, we’re not suggesting that. We said at the end of last year that they would be possible in 2017. We’ve made allowance for that.”

Owen: “Okay. So what about measures to curb poverty, then? Will they have to be delayed? Because the Prime Minister identified them as something of a priority. Is that going to be delayed?”

English: “Well, we’ve been working on these issues for a while, particularly focused on communities and families with persistent deprivation and caught in a cycle of dependence. And so you could expect to see us continue with that sort of programme through this Budget…

… Or sickness and invalids beneficiaries with more support for their health issues and more support for employment, could actually get out of dependency, off welfare and remain in work.

Because as we all know, invalids don’t actually have real disabilities or debilitating injuries or diseases – they are simply on a “cycle of dependence”.

When in trouble, blame someone else. In this case, invalids.

Owen then moved on to the issue of Auckland’s growing housing crisis and nailed English on this government’s spectacular inability to manage and address that city’s housing shortage. English simply blamed the Auckland Council;

“Well, the migration numbers have stayed high, bearing in mind about half of migrants appear to go to Auckland; the other half go to the rest of the country. But there’s pretty clear signals that Auckland City Council need to get on with the job. They are the ultimate decision-maker around the infrastructure and around the consenting for new houses. We’re giving them the toolkit to enable them to do it faster, but there’s clearly a lot more to be done, and we’ll keep looking for more tools to help the Auckland City Council to do the job they need to do.”

When still in trouble, keep blaming someone else. In this case, the Auckland Council.

Thus far, National’s grand strategy to cope with Auckland’s housing crisis is to shift ownership of 2,800 properties from Housing NZ to the Tamaki Redevelopment Company – as if shifting properties around on a giant ‘Monopoly’ board will somehow solve the problem?

Owen pointed out to English that in transferring 2,800 houses to the Tamaki Redevelopment Company, that he was breaking a previous committment;

Owen: “Now, hang on a minute. There you offloaded 2800 houses, and I thought you had a cap on getting rid of state houses of about 2000. So is that cap gone now?

English: “Well, no. What we’ve said is Housing New Zealand will own at least 60,000 houses, and that certainly hasn’t changed. Government remains the owner—”

Owen: “No, you said a cap, Minister. So has the cap gone now with this 2800 houses? The cap’s blown?

English: “No. Government will remain the owner of the Tamaki houses. We’ve simply put them in a different government company, which has been set up specifically to regenerate that community, because it’s a very particular skillset.”

English had all but surrendered to Owen’s persistent questioning by outright admitting his government’s failure to address Auckland’s mounting housing crisis;

“That’s right. We’re not meeting demand. I certainly agree with that. Whether it gets worse before it gets better, forecasters can argue over that. We’ve got plenty to do to meet the demand that’s been there for a while. And as I said, the Government’s supporting Auckland City, trying to get them a better toolkit and making our own contribution through redeveloping our own land in Auckland.”

For English, this interview was possibly the worst in his political career. He had to explain why his commitment to returning to surplus this year was now in tatters, and why his government’s housing plan for Auckland consisted of moving state housing from owner to owner, without adding significantly to the overall stock.

The only reason why National’s reputation for being a “sound prudent fiscal manager” survives intact is because New Zealanders are not paying attention.

But worse was to come when Corrections Minister, Peseta Sam Lotu-Iiga took the chair and was also interviewed by Lisa Owen. What followed was a debacle of Hekia Parata proportions.

2. Corrections Minister, Peseta Sam Lotu-Iiga

With on-going  privatisation of State services dressed up as so-called “Public-Private Partnerships” (PPPs), Lisa Owen put several questions to the Corrections Minister on the role of UK company, Serco, which has been contracted to run the new prison at Wiri.

His responses were jaw-droppingly incompetant. The man was totally out of his depth, as these excerpts show;

Owen: “So are they getting paid and how much?”

Lotu-Iiga: “Well, the contract is between Serco and PlaceMakers, and I’m not privy to those sums, but—”


Owen: “So you don’t know how much the business is going to make—”

Lotu-Iiga: “I don’t have the figures on me, but we could ask Serco what the contract’s for.”


Owen: “Out of the inmates building framing and having these contracts. So who makes the profit out of the contract?”

Lotu-Iiga: “ Well, we don’t know whether there’s profits being made, but what PlaceMakers—”


Owen: “Why don’t you know that, Minister? Because this is under your watch.”

Lotu-Iiga: “Well, I spoke to the managing director of PlaceMakers yesterday, and they said that they will pay a standard contract for fees to Serco. I don’t know what that amount is…”


Owen: “Right, so in terms of rehabilitation, but you don’t know who’s making a profit or if one’s being made?

Lotu-Iiga: ” Hang on. They’ve got a commercial transaction between Serco and PlaceMakers. I don’t know what that figure is, but we can work it out.”


Owen: “Even with that $30 million? Even with that $30 million profit that they’re making per annum?”

Lotu-Iiga: “I don’t think they’re making a $30 million profit.”


Owen: “You don’t think it’ll make $30 million, and what you’re saying is it’s still saving money even though this company is making a profit out of it? It’s still saving us money even though they’re taking that profit.”

Lotu-Iiga: “It’s… Well, it’s saving the taxpayer money. It is saving the taxpayer money.”


And then this astounding admission from the Minister that must have had every viewer that Saturday morning choking on his/her milo/tea/coffee, and the Prime Minister speed-dialling his Chief-of-Staff;

Owen: “Who employs those monitors? Who employs the monitor in the prison? “

Lotu-Iiga: “There will be— If I can just finish, there will be an ombudsman. They will be subject to complaints—”

Owen: “So the monitor in the prison, Minister, just to be clear, the monitor in the prison; who employs the monitor?
Lotu-Iiga: “My understand is that the monitors are based in the prisons, but they report to the Department of Corrections.”

Owen: “Who employs the monitor and pays their wages, Minister?

Lotu-Iiga: “Well, I don’t have those facts on me, but they do report—”

Owen: “Well, I do. The person who employs the monitor— the person who employs the monitor is the company, Serco. They employ the monitor, and pay their wages.”

Lotu-Iiga’s spectacular ignorance of his own portfolio has almost certainly destroyed his political career. He will also have disappointed his political strategist and mentor, controversial far right-winger,  Simon Lusk.

Lusk was employed by Lotu-Iiga during the 2008 election campaign for the Maungakiekie Electorate Campaign. In return, as well as being paid by Lotu-Iiga, in his Maiden Speech in Parliament the newly-elected MP openly acknowledged Lusk’s involvement in his election to Parliament. In this Youtube video, Lotu-Iiga mentions Lusk at 3:56. Note who is sitting behind Lotu-Iiga – Aaron Gilmore, another Lusk protégé.

Bad luck, Simon.

It is not often that I feel sympathy for a Minister of a National Government. When I do, it is the pity I feel for a doomed man whose career has come to a grinding, crushing halt.

At the next Cabinet re-shuffle, Lotu-Iiga will be joining Kate Wilkinson, Phil Heatley, and Aaron Gilmore in political oblivion.

Dead Minister Walking.

3. Political Panel

Mike Williams, Bernard Hickey & Jamie Whyte comment on interviews with Bill English and Peseta Sam Lotu-Iiga. Note ex-ACT leader, Jamie Whyte’s cringe-worthy apologistic comments on behalf of English, and why he thinks government debt does not matter.

4. The Programme

All in all, this was one of the most outstanding episodes of “The Nation” with excellent interviews; topical subject matter; and insightful analysis by (most) of the panellists. Lisa Owen joins Kim Hill as two of this country’s most formidable interviewers.

This is the sort of programming Mediaworks should be broadcasting at Prime Time. My “money” would be on people desperate for informative television – who are sick to their stomachs on a sickly diet of “reality tv” – to flock to such a viewer-friendly scheduling.

Good, quality, current affairs should never be tucked away as some sort of “guilty pleasure”.




Wikipedia: The Phoney War

Wikipedia: Claytons

Rabobank: Country Report New Zealand

Farming Show: Australia becomes top trading partner once again

Radio NZ: Price drop another blow for dairy farmers

NZ Herald: Brian GaynorPlans for jump-start reveal differing styles

Scoop media:  Govt’s 2010 tax cuts costing $2 billion and counting

Fairfax media: Dairy prices fall at Fonterra GlobalDairyTrade auction

Beehive: Fact sheet – Personal tax cuts

Radio NZ: English concedes surplus target unlikely

Youtube: The Nation – Can National promise a surplus by 2016?

TV3: The Nation – Interview –  Finance Minister Bill English

Treasury: Debt

Fairfax media: Public debt climbs by $27m a day

Fairfax media: Government offloads 2800 state houses to Auckland development company

TV3: The Nation – Interview – Corrections Minister Sam Lotu-Iiga

Wikipedia: Serco

Simon Lusk: Clients

Fairfax media: The rapid rise of a well-educated man

Youtube: Peseta Sam Lotu-Iiga MP – Maiden Speech

Previous related blogposts

Tax cuts and jobs – how are they working out so far, my fellow New Zealanders?

Did National knowingly commit economic sabotage post-2008?

Budget 2014 – Why we will soon owe $70 billion under this government

The Mendacities of Mr Key #3: tax cuts

When the Rich Whinge about paying tax

Two Tax Strikes against Dunne?

“It’s one of those things we’d love to do if we had the cash”

National’s Ohariu candidate admits contact by Simon Lusk

Power Struggle in the National Party?!

Other blogs

Unframed: John Key has no credibility on debt and no Plan B


Tim Watkin, Producer of “The Nation“, for interview transcripts; link to Youtube excerpt featuring Bill English; and valuable insights.




This blogpost was first published on The Daily Blog on 3 May 2015.



= fs =

Citizen A – 4 October 2012 – Online now!


Citizen A


– 4 October2012 –


– David Slack & Selwyn Manning –



Issue 1: two inquires, one Police investigation , spies meeting in Wellington, Key visiting Hollywood and an official apology – how much more weird can the Kim Dotcom scandal get?

Issue 2: Does the Education Ministry’s handling of school closures in Christchurch make the GCSB illegal spying look competent?

Issue 3: If crime is down, why are we building a new billion dollar private prison?


Acknowledgement (republished with kind permission)




= fs =

Not all con-artists are in prison.

16 September 2011 3 comments


As far back (or even further, if one looks harder) as 2006, National (and it’s little “buddy”, ACT)  was advocating privately-run prisons as a means of saving taxpayers money. They were supposedly more cost-effective, and would save the country considerable sums of money.

In June 2006, the then-National Party Law & Order Spokesman, Simon Power, said in a press release,

“Overseas experience indicates that contracting out prison operations reduces costs, both in the design and construction and in the management of prisons.”

Power was effusive in his enthusiasm for privately-managed prisons, going so far as to quote Treasury documents which also promoted the concept.

Labour ignores Treasury on private prisons


National and ACT both promoted privately-managed prisons as a money-saving concept,

ACT’s Law & Order Policy:

“Action: Bring back private prisons – now best practice overseas. Let private firms free up cops for ‘Zero Tolerance’ policing. Speed up courts (eg. night courts) to reduce unfair delays.

Benefit: More secure, more humane, cheaper prisons. Young taggers don’t progress to worse crimes. People feel safer. More decisions sooner.”

ACT Policies


National’s 2008 policy document, “Law and Order Policy: Prisons“, under the heading “The Management of Prisons” states (in part),

“The average per-prisoner cost over the five years of private management of ACRP from 2000-2005 was $42,720 per prisoner per annum, compared to the average cost for Corrections to keep a remand prisoner of $52,925in 2001/02. Of the original short list of four tenderers for ACRP, the Public Prisons Service was listed as fourth. Aside from cost advantages, Treasury has argued that contestability of prison management also encourages innovation in reducing recidivism…

…The British National Audit Office review of the private prison system in the UK concludes that “competition has helped drive up standards and improve efficiency across the prison system as a whole.”

National Law and Order Policy: Prisons


Throughout the press releases, and policy documents, both National and ACT complain that  “Labour’s objection to private prisons has been ideological”.

It is also interesting to note that National compares the figure of $42,720 per prisoner per annum, over a five year period with that of $52,925 over a two year period.  Neither of National’s references provided on their policy paper can be verified on-line.  So it seems that National may be comparing an average figure over five years with an average figure over two years, which results in privately-run prisons appearing to be a cheaper option.

National’s dubious figures are then parroted by others, such as right-wing bloggers,

“Delighted to see the new Wiri prison will be openly tendered. Not only may it cost less, but more importantly it provides opportunities to have a lower escape rate, and a higher rehabilitation rate.”



As someone infamous once said, if you tell a lie big enough and keep repeating it, people will eventually come to believe it.

In November 2009, the year-old National Government passed  legislation – under Urgency – permitting prisons to be handed over to private companies for management. Quite why this piece of legislation was considered “urgent” has never been made clear.

Private prisons bill passed


Corrections Minister Judith Collins claimed that National’s previous experiment in privately-run prisons, in the late 1990s had been “generally positive”.  ACT’s Law & Order spokesperson, David Garrett, stated that ” international data showed privately run prisons were cheaper and delivered better outcomes“.

Labour’s Lianne Dalziel pointed out that ten out of eleven British prisons  were in the bottom 25% of all the prisons on performance measures.

In May 2010, the Green Party released a media statement that said,

Private Prisons cost more

Privatising Auckland prison is a dangerous precedent that will increase costs and compromise New Zealand’s justice system, said the Green Party today.

John Key’s Government announced yesterday the joint Mt Eden-Auckland Central Remand Prison (ACRP) will be run privately. The corporation to run the prison will be announced by the end of the year.

“The last privatisation experiment with the ACRP increased costs by $7000 per prisoner,” said Green Party Corrections Spokesperson David Clendon…

… Evidence from the US and Australia shows that private prisons do not reduce costs for the Government. Research from New South Wales suggests prisoner safety is compromised because of the focus on profit…

… “If John Key’s Government really wants to reduce prison costs, they need to get serious about addressing the causes of crime – especially inequality which they seem to be hell bent on making worse,” said Mr Clendon.”


The Green Party blogsite links to two interesting reports on privatised prisons in Australia and US. The reports make for interesting reading and seem to undermine claims by National and ACT that privately-managed prisons are cheaper options.  For example, the US Justice Office of Justice Reforms report stated, in part,

“The study resulted in some interesting conclusions. For example, it was discovered that, rather than the projected 20-percent savings, the average saving from privatization was only about 1 percent, and most of that was achieved through lower labor costs.”  Source

The Australian report “Privatisation and New South Wales Prisons: Value for Money and Neo Liberal Regulation”, makes similar points,

“For example, Cooper and Taylor (2005), in a study of prison privatisation in Scotland, identify reducing labour costs and increasing labour flexibilities as a key reason for privatisations. We contend that, in the specific case of the New South Wales ‘Value for Money Report’, the government’s support for the maintenance of ‘at least one private prison’, in the absence of meaningful cost data, was on the basis of the continuing disciplinary effects it would have upon the union, and therefore the leverage it would grant the government in extending its workplace reform agenda.”  Source

Privatisation and New South Wales Prisons

Emerging Issues on Privatised Prisons, US Department of Justice


It seems that  warnings regarding the ideology that private-is-cheaper come home to roost, though somewhat earlier than many had anticipated,


Full Story


As for  Corrections deputy chief executive Christine Stevenson claiming that  “costs were high because it was New Zealand’s first PPP prison” –  one wonders where she’s been for the last ten years?!

Has Ms Stevenson no knowledge of National’s previous experiment with privately-managed prisons? The Auckland Central Remand Prison (ARCP) was under private management from 1999 to 2005,  after which  the former Labour Government did not renew the contract.

If six years of private prison management has not privided the necessary experience to prevent spending $21 million on “consultants” and “internal costs”, then what confidence is there that this exercise will not end up costing the tax-payer vast sums of money?

The NZ Herald article quotes Conservative MP Richard Bacon,

“It is clear that [PPP] has spawned an entire industry of advisers who have done extremely well out of it.”

The whole point of this exercise is that private enterprise has the necessary expertise and experience to put this project together. Thus far there appears precious little indication that private management is most cost effective or efficient than State management.

However, as Damien Cahill and Jane Andrew write (“Privatisation and New South Wales Prisons: Value for Money and Neo-liberal Regulation”),  the privatisation of prison management is not simply about cost-effectiveness per se. Instead, it is more about driving down employees wages.

Remember what Bill English let slip on 10 April of this year, on TVNZ’s Q+A, when English said the 30% difference in incomes between New Zealand and Australia is a way of competing,

“If we want to grow this economy we need capital and we’re competing for people too…  and we need to get on with competing for Australia.  So if you take an area like tourism, we are competing with Australia.  We’re trying to get Australians here instead of spending their tourist dollar in Australia.” – Bill English

It seems that not all con-artists are in prison.

Some are busily trying to sell us a “lemon”. A bloody expensive one at that.






***Additional Info***

1. One of the references in the National Party 2008 policy document – Dom Karauria, General Manager of Auckland Central Remand Prison (ACRP) – was an employee of  GEO Group Australia Pty Ltd – the private contractor that managed the ACRP from 2000-2005.

2. Catholic organisation Caritas …  noted that in the US the same people running private prisons were also involved in lobbying government for longer sentences.  Source

3. In a June 2009 submission to the Law and Order Select Committee , GEO Group Australia Pty Ltd  admitted that privately-managed prisons do not always deliver cheaper services;

However, comparing the quality and cost of private and publicly−managed
correctional centres is fraught with difficulties. Simple questions about which
approach delivers the best outcome cannot always be answered definitively. Such
comparisons must be based on a strict like−for−like basis and this rarely is possible,
and the performance of any correctional centre varies over time through factors both
within and outside its control.
There are correctional facilities under public−management that perform exceptionally
well, whilst others perform poorly. Whilst privately−managed correctional centres
cannot reliably be stated as always being superior or inferior to publicly−managed
correctional centres, on a number of occasions privately−managed correctional
centres have been singled out for the highest praise…”  Source

Furthermore, GEO Group Australia managing director Pieter Bezuidenhout said,

“Privatisation is not about cost savings. If that’s all you want to achieve I am saying that you are knocking at the wrong door.

“Privatisation will bring an enhanced public service…” Source





With acknowledgement to Tumeke Blog, for highlighting this issue,

Private prison costs more than public prison