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Speech to Institute of Policy Studies 'Costs of Crime' forum

Simon Power, Justice - Justice Minister
21 February 2011

Thank you for inviting me to open this forum. I would particularly like to acknowledge the Institute of Policy Studies for hosting this important public debate, fellow MPs, and all the organisations and NGOs here today from the coalface of dealing with crime.

I’ve been asked to speak to you about government policy on the costs of crime in the public sector.

You can imagine that as the Minister of Justice and an Associate Minister of Finance I approach the costs of crime from different angles. On one side I look at the immeasurable costs of crime on victims and the community, and on the other I look at it from the angle of what it’s costing the government, and ultimately the taxpayer, in monetary terms.

Though it’s easy to keep a record of the $3.7 billion we spend each year on justice sector agencies, it’s more difficult to put an overall figure on the true cost of crime to New Zealand. And we’re not alone in that. I’m advised that no country in the world has an established agreed process for calculating the costs of crime.

The most recent attempt by the Treasury in 2006 estimated the costs of crime to be $9.1 billion for the 2003/04 year. That paper estimated that of the $9.1 billion, $2.1 billion was borne by the public sector.

Those figures are expected to be higher now, when you consider that justice sector operating expenditure has grown by 38% since 2005, although this includes many costs not directly related to crime. Such a growth rate is unsustainable, particularly at a time when the Government is being forced to borrow $300 million a week.

So, to confront the growth, the justice sector has been forced to sharpen its approach to spending.

Broadly speaking, my approach, as the lead Justice-sector Minister, involves two elements. The first involves creating efficiencies in service delivery.

Our plans in this respect have been well-publicised. They began with Dame Margaret Bazley’s review of the legal aid system which focused on quality and administrative issues. We’re addressing those through the Legal Services Bill, which recently passed its second reading in the House.

But it’s very clear we cannot afford to ignore the enormous cost pressures the legal aid system is facing, which is why I will soon be announcing changes to help meet an expected $402 million funding gap over the next five years, while ensuring access to justice is maintained.

However, the legal-aid spend represents only one side of the equation.

This year, the Attorney-General, the Minister of Police, and myself will also be undertaking a fundamental review of the cost of prosecutorial services. There’s no denying that the process for justice to be done and to be seen to be done is a costly one, both in terms of time and money.

The 526-page Criminal Procedure (Reform and Modernisation) Bill, which contains the biggest changes to criminal procedure in many decades, is partly designed to address that, by simplifying and speeding up criminal procedure.

The annual benefits from these proposals are potentially huge, and include:

  • Freeing-up of 16,000 hours of court time.
  • Reducing the number of court events by 43,000, and
  • Shaving 13 weeks off the time it takes for a jury trial case to make its way through the system.

The monetary benefits are sizeable. It’s estimated these changes could result in savings of $24 million over a five-year period.

So, reforming legal aid and criminal procedure are just two of the ways we are addressing the costs of service delivery in the justice system.

The second and more important way we want to drive down the costs of crime is actually pretty obvious – by stopping crime before it happens. This is significant because justice-sector growth is almost entirely driven by demand for services, starting with the Police and then the court system.

Of particular concern to me are district court criminal case volumes, which have increased by 14% in the past five years. Remember that each and every person entering the system triggers an array of services at each stage of the process.

It helps to look at the system as a pipeline and when you bore down into it you come up with some very interesting and surprising numbers.

I want to run you through a couple of examples of the costs associated with putting a single person through the system. These examples are purely hypothetical but are designed to give you a better idea of how the pipeline looks.

The first is a person who is charged and then convicted of burglary. You can see that the total cost, from the time the crime is reported to the time the person is released, is $11,250, assuming a six-month home detention sentence.

The second example is a person charged and convicted for grievous bodily harm.

You can see that the total cost, from the time the crime is reported to the time the person is released was $326,920, assuming a 43-month custodial sentence. When you break it down it costs an average of $249 a day to keep someone in prison – or just over $90,000 a year.

These two examples show very clearly how essential the need to reduce the number of people entering the pipeline is if we are to cut the costs of crime.

The longer-term costs associated with severe anti-social behaviour are also significant. A study estimated that the lifetime cost to society of a chronic adolescent anti-social male in New Zealand is approximately $3 million.

The debate about the justice system should not be fixated solely at the punitive end. Perhaps that’s because the solutions are more easily quantifiable, involving either more or less punishment. And that’s why the Government is seeking to change this through the drivers of crime strategy.

This approach requires a lot more patience because it takes longer to see results. But I ask you to be patient because in the strategy’s short life it is making real progress to stop crime before it happens.

And, we all know that if we can stop people from getting on the carousel of crime in the first place then the savings – not only monetary but also in terms of human cost – will be huge.

The drivers of crime strategy was set up by Dr Pita Sharples and myself in April 2009 and aims to proactively address the underlying causes of crime, rather than just mobilise the criminal justice system’s response to it.

It’s the first time I can recall that a government has gone back to basics in this way, based on shared responsibility across a range of agencies, including Social Development, Education, Health, Police, and Corrections.

Our work is separated into four priority areas, based on evidence of what causes crime, with the focus of each priority on providing better and more coordinated services to people who most need support. Overlaying each is also a focus on reducing Maori offending and victimisation.

The first is to improve maternity and early parenting support. To do this we’ve funded 19 more teen parent intensive case workers to help the most vulnerable young parents stay in education and prepare for future employment.

The case workers also link vulnerable teen parents and their children to support services, including antenatal care, housing, budgeting, Well Child, and early-childhood education.

The Government has also set up seven new supported houses where teen parents receive 24/7 supervision and mentoring with trained staff to help them make plans for their family’s future. During all this, Kaitoko Whanau and Oranga Whanau are working with vulnerable Maori parents to promote positive parenting, safe and healthy babies, and resilient whānau. These projects are all about ensuring that very young children get the best possible start in life.

The second priority area comes via our work to address conduct and behavioural problems in young children, which focuses on those in the 3-8 year age bracket.

Research suggests that if successful early intervention occurs with the 5 to 10 per cent of children with the most severe behavioural problems, there is the potential for a 50 to 70 per cent overall reduction in adult criminal activity and associated poor life outcomes.

To complement this we have expanded the Incredible Years and Positive Behaviour for Learning programmes. By 2014, up to 12,000 parents will have participated in these two programmes – and evidence shows they have the potential to turn around the behaviour of up to 80 percent of the children of participating parents.

The next phase of action on conduct and behavioural problems will involve expanding mentoring and activity programmes for youth offenders, and continuing the development of behavioural programmes for Māori.

The third and perhaps the most well-publicised priority area in the drivers of crime strategy is preventing alcohol-related harm.

That’s hardly surprising when you consider that alcohol is implicated in 30 per cent of all police recorded offences, 34 per cent of recorded family violence, and half of all homicides. This is backed up by District Court Judges estimating that up to 80% of defendants coming before them have alcohol or other drug dependency issues – while recent estimates have put the cost of alcohol-related harm at up to $562 million a year.

The Government’s response to tackle alcohol harm is largely contained in the Alcohol Reform Bill. As I’ve said before, that bill is merely Parliament’s starting point for reform and we’ll be listening carefully to what submitters to the Select Committee say.

The fourth priority area in the drivers of crime initiative is the management of low-level repeat offenders.

If we can divert low-level offenders away from long-term patterns of offending – get them away from that carousel – while holding them to account for their actions, we can reduce crime.

One of the real success stories in this area is Community Link in Courts, a project which links offenders and victims in the Auckland, Porirua and Masterton Family Violence Courts to a range of social services to help them address the offending and the families needs.

There’s not enough time to go into every initiative being pursued through drivers of crime. However, I hope the examples I have set out give you some indication of the progress we’re making.

I want to re-emphasise that there’s no quick-fix solution for addressing the drivers of crime. Tangible results will take time.

But again, I ask for your patience and support, because the truth is, the more buy-in we have for the drivers of crime initiative, the more successful it will be, not only in reducing the fiscal costs of crime, but more importantly the immeasurable costs of crime on victims, and the wider community.

Ladies and gentlemen thank you again for inviting me to open this forum. Addressing the costs of crime is an important issue, not only the Government but for the wider community, and I’m sure this forum will make a valuable contribution to the debate.


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