Is 1% as Small as We Think?

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It is estimated that 45.6% of all released prisoners reoffend within two years alone. This figure varies state by state, but every state sees more than a third of ex-prisoners back in the system within two years.

Returning back to society is much harder than it may seem. There is always a complex array of factors that influence a person’s propensity to reoffend. Some of the most significant issues include age, education, employment, aboriginal status, and mental health.

Why does it matter?

Preventing reoffending is economically beneficial for the Australian community. The national operating expenditure on prisons in Australia was $3.9 billion in the 2017/2018 financial year (excluding capital costs). This is equivalent to $94,000/inmate p.a.

With an estimated 44.8% of 47,000 released prisoners returning to prison within two years, this presents a great financial burden on the economy.

It begs the question, then, what alternative measures would be more beneficial to prisoners and the wider Australian community?

Prison Fellowship Australia was privileged to take part in the 2019 Actuarial Hackathon, an event sponsored by the Actuarial Institute, Finity Consulting, and Pacific Life Re. We conducted research to discover the economic benefit of reducing recidivism by a mere 1% (approximately 500 ex-prisoners).

The study took into account:

  • Direct Costs: the cost to the system of holding inmates
  • Productivity Costs: lost productivity of inmates and their support network
  • Other Costs: including non-financial costs and support programs
  • Release Costs: the costs associated with the initial release of a prisoner

DIRECT COSTS

These are the variable costs associated with operating the prisons borne by the government (and therefore the taxpayers).

A reduction in recidivism of 1% would save approximately $40.6 million p.a.

PRODUCTIVITY COSTS

This is the value lost due to incarceration in the form of salary and payroll tax borne by the inmates and the government.

Prisoners would otherwise be employed, creating approximately $118-173/day per person on average. (This includes paid and unpaid work).

However, prisoners also create value during imprisonment through employment and community work. This offsets the value loss by an estimated $52-73/day.

When extrapolated over an average prison sentence, this equates to $12.1-18.3 million p.a.

NON-FINANCIAL COSTS

Non-financial (economic) costs of crime refer to the time, energy, and resources diverted. While difficult to measure accurately, it is still estimated to be $96.7 million.

RELEASE COSTS

Certain post-release costs can be considered unproductive if they do not produce the required outcome of preventing recidivism. These include: parole and supervision, housing services, legal services, employment services. (Other release costs have not been included: support groups and counselling, drug and alcohol programs, training and mentoring programs, childcare assistance).

Unproductive release costs equate to a minimum of $8,500 per inmate.

It is difficult to get an accurate gauge on the non-financial and release costs. However, even if only considering the reduction in direct and productivity costs, reducing recidivism by 1% equates to nearly $60 million p.a. saving to the Australian economy.

What now?

Prison Fellowship remains committed to working with Corrections Departments, chaplaincy services, and faithful volunteers in order to engage meaningfully with prisoners and others affected by crime. Prison visitors and restorative justice programs offer the transformative love of Jesus, targeting the heart behind the crime. We trust in a patient God, who desires that none should perish, but that all might come to repentance. (2 Peter 3:9)

Joanna Mann, Staff Writer