Crimes cost $9b - and it's rising

Crime costs New Zealand $9.1 billion a year, and Government efforts to fight it are not working, says a hard-hitting Treasury report.

The report shows $7 billion of the bill was incurred by private citizens. This includes the cost of security, property loss and damage, lost employment and intangibles such as effects on life quality.

The remaining $2.1 billion was spent by Government agencies and includes obvious costs such as policing and prisons, and others such as the health spending on crime victims.

The Treasury report says the Government is not getting value for the money it spends on crime-fighting.

It singles out the rising number of people in prison and the cost of keeping them there, as an example, and makes several suggestions aimed at reducing both.

They include reviewing the policy of longer sentences and re-introducing suspended sentences.

The officials question whether it would be more effective to divert some prison spending to crime prevention.

The report, "Treasury's In-depth Review of Criminal Justice", was written in December and given to National MP Simon Power under the Official Information Act.

It was commissioned because of increasing concern over the justice system's "emerging social, economic and fiscal risks".

This is centred on the huge costs incurred since 2002 by the rising prison population, which the report says was an "unintended and unplanned consequence" of legislative and policy changes towards tougher sentences.

New Zealand has about 7500 prison inmates.

The report said a better-informed debate was needed on the value of imprisonment as a means of tackling crime, as it was the most expensive way of reducing offending - and one of the least effective.

While there was "considerable support for tough approaches to criminal justice", the public did not realise this could increase the social cost of crime.

The report also identified problems affecting efforts to reduce crime.

It said the Government's Crime Reduction Strategy lacked focus, and suggested its goals be shifted from promoting community safety to the more tangible one of reducing the total cost of crime to society.

The Government is reviewing criminal justice laws and policies as it tries to reduce the prison population and avoid having to build more jails.

Papers on proposed reforms are to go to the Cabinet this month.

The Treasury report gives several ideas on crime-fighting which have been withheld under the Official Information Act.

But the information released makes it clear significant changes are needed to improve the way the criminal justice system is working.


The report says the Government spent considerably less proportionately on "public order" than comparable countries, but also earned less per capita. It would have to spend an extra 16 per cent to match Australia, but this was not realistic.

Mr Power said the $9.1 billion figure - which comes from the 2003-04 year - was a "staggering sum".

He said the review found the Crime Reduction Strategy "unclear and undocumented" in accountability and strategy. This meant the Government "does not know where to start".

"The only way to prevent an exploding prison population is to stop crime. When Treasury says the Government has no idea how to do that, there is a serious systemic problem."

He claimed the focus on reducing the prison population was "a downflow to try to deal with the issue that hasn't been addressed in the first instance, which is stopping crime".