Contents

Acknowledgments                                                                                                 v

Executive summary

1.       About this paper  PAGEREF _Toc85543738 \h 7

1.1     Australia’s criminal justice system   PAGEREF _Toc85543739 \h 7

1.2     Trade‑offs in the criminal justice system   PAGEREF _Toc85543740 \h 13

1.3     Scope of the paper PAGEREF _Toc85543741 \h 15

2.      Setting the scene: imprisonment in Australia  PAGEREF _Toc85543742 \h 19

2.1     The prison population  PAGEREF _Toc85543743 \h 20

2.2     Imprisonment rates  PAGEREF _Toc85543744 \h 24

2.3     Offences and sentences  PAGEREF _Toc85543745 \h 34

2.4     Remand  PAGEREF _Toc85543746 \h 39

2.5     Recidivism   PAGEREF _Toc85543747 \h 42

2.6     Putting it all together PAGEREF _Toc85543748 \h 46

3.      Prison: an economic perspective  PAGEREF _Toc85543749 \h 47

3.1     The role of prison  PAGEREF _Toc85543750 \h 48

3.2     Fiscal costs of prison  PAGEREF _Toc85543751 \h 55

3.3     The indirect costs of imprisonment PAGEREF _Toc85543752 \h 65

4.      Case studies of alternative practice  PAGEREF _Toc85543753 \h 71

4.1     Taking opportunities for diversion  PAGEREF _Toc85543754 \h 74

4.2     Home detention, electronic monitoring and early parole  PAGEREF _Toc85543755 \h 83

4.3     Treatment in prison  PAGEREF _Toc85543756 \h 86

4.4     Effective case management for rehabilitation and release  PAGEREF _Toc85543757 \h 88

4.5     Clear system objectives and administrative guidance  PAGEREF _Toc85543758 \h 89

4.6     Greater use of benefit–cost assessments  PAGEREF _Toc85543759 \h 92

4.7     Drawing the threads together PAGEREF _Toc85543760 \h 93

5.      Where to from here?  PAGEREF _Toc85543761 \h 95

5.1     Building the evidence base  PAGEREF _Toc85543762 \h 96

5.2     More systematic research into the criminal justice system   PAGEREF _Toc85543763 \h 96

5.3     More trials and evaluation of improvements and alternatives to prison  PAGEREF _Toc85543764 \h 97

5.4     A whole of system approach  PAGEREF _Toc85543765 \h 98

Appendices 

A.                                                                                                        Consultations                                                                                                                              103

B.      Drivers of imprisonment                                                                         105

C.      Case Studies: data sources and methodology                                   131

Abbreviations                                                                                                     143

Glossary                                                                                                              145

References                                                                                                         147

 Acknowledgments

The Commission is grateful to everyone who has shared their expertise and insights in the development of this paper, particularly officials from state and territory governments who provided data and advice. A list of the stakeholders consulted is in appendix A.

This paper was produced by a team led by Jane Melanie and consisting of Meredith Baker, Shane Evans, Marco Hatt, Yael Jacoby, Bryn Lampe, Josh Lipp, Jeremy Nott and Danielle Venn. It was overseen by Commissioners Stephen King and Richard Spencer.

 

Australia is locking up a record number of people. Our imprisonment rate has grown steadily since the 1980s and is around its highest level in a century (figure 1). On 30 June 2020, more than 40 000 Australians were in prison. Many more flow through the prison system each year. Over one third of prisoners are on remand, waiting for trial or sentencing. And nearly 60 per cent have been in prison before.

Figure 1 – Imprisonment is at historic highs, crime rates are falling^a,b,c

a. The imprisonment rate is the number of prisoners per 100 000 population aged 18 years and over. The homicide rate is the number of homicides per 100 000 persons.

b. The homicide rate is considered a useful indicator of trends in the incidence of violent crime, as almost all homicides are reported to police and data are available over a long period (Bricknell 2008; Indermaur 1996).

c. The fall in imprisonment during the COVID‑19 pandemic appears to be due to a combination of falling prison receptions — due to a slowdown in court processing during lockdown periods — and an increase in prisoner discharge — due to a deliberate change of policies or practices that resulted in the release of more unsentenced prisoners on bail.

The increase in imprisonment cannot be explained solely by changes in either the amount or type of crime. It is, at least in part, a policy choice.

As a policy, imprisonment serves multiple objectives — deterring crime, removing dangerous individuals from the community, punishing and rehabilitating offenders, and supporting the rule of law. But it is also expensive. This raises a key economic question for policy makers. Is the current policy of increased use of imprisonment producing benefits for Australia that outweigh the costs? And what, if any, are the alternatives?

In this paper — the Productivity Commission’s first venture into research on the criminal justice system — we highlight the information, data and options that policy makers need to answer these questions. The Commission has used an economic approach to help guide policy makers in weighing up the benefits of criminal justice policies against their costs. Even though this is only one perspective, it provides valuable insights into the complex trade‑offs facing policy makers.

Why are more people in prison?

Two broad changes are affecting Australia’s imprisonment rate.

Changes in the nature and reporting of crime: the level of imprisonment has changed due to changes in the level and mix of crime. There has been an increase in some types of serious crime, such as sexual assault and drug trafficking. But there has also been a decrease in other types of serious crime such as homicide and robbery. There is also evidence of increased reporting of crime, which raises the level of imprisonment. For example, in the past, there appears to have been under‑reporting of some serious crimes, such as domestic violence and sexual assault, due to social stigma and cultural norms.

Changes in criminal justice policy: for example, in a number of states and territories, policies have made bail harder to access and remand the default position for a wide range of offences. Also, many jurisdictions have introduced prison‑based mandatory sentencing. These policy changes mean that, for a given rate of crime, more people will spend more time in prison.

The evidence in this paper suggests that both of these changes underpin Australia’s current high imprisonment rate. However, the story is complex.

In part, the complexity reflects that criminal justice policy is largely a state‑based issue. Australia has nine different criminal justice systems and the key drivers of increased imprisonment are different across these jurisdictions.

There is also a lack of reliable data that can be used to determine the importance of each type of change. Data gaps are pervasive at each point in an individual’s ‘prison journey’ — arrest, remand, trial, sentencing, and parole.

Even so, it is clear that increased imprisonment is partly the result of policy choices.

The trade‑offs for prison policy

Governments have a range of policy levers that influence the level of imprisonment and the criminal justice system more broadly. Governments make laws and regulations that define what is a criminal offence and set some parameters for sanctions. They also manage and fund the main components of the criminal justice system: law enforcement, courts and corrective services.

Governments face trade‑offs when designing prison policy. There are multiple, sometimes conflicting, objectives. Longer prison sentences or widening the range of crimes punishable by imprisonment, for example, might deter crime. It also might meet the community’s desire for justice for victims or to show its repugnance for some kinds of crime.

But a longer sentence could be disproportionate to the seriousness of the crime or may severely punish an individual for a one‑time mistake. Longer imprisonment may also raise the likelihood of reoffending after release so that imprisonment may sometimes trade-off short‑ and long‑term safety of the community.

Different policies also have different costs. Prisons are expensive, costing Australian taxpayers more than $5 billion per year, or more than $330 per prisoner per day. In contrast, alternative punishments, such as community corrections orders, may have much lower costs. A community corrections order can cost as little as $30 per prisoner per day, but compared to imprisonment, changes the risks facing the community.

There are also indirect costs. As a deterrent to crime and punishment for crime, imprisonment imposes costs on prisoners, including through lost employment, poor health and family separation. However, some of these costs are likely to fall on prisoners’ families and society more generally.

Many of these costs are significant, but hard to measure. And it is people from society’s most disadvantaged groups, who are significantly over‑represented in prisons, who tend to bear the brunt of these costs. In contrast, alternative punishments, such as diversion from prison, or reduced imprisonment, together with offenders engaging in ‘restorative justice’ with their victims, can significantly reduce these indirect costs.

Governments need to consider these trade‑offs when designing prison policy. To do this, governments need information on the costs and benefits of both imprisonment and its alternatives.

What we do (and don’t do) in this paper

Prison policy is contentious. Views diverge widely on how best to balance the various objectives of the criminal justice system — be it keeping the community safe, punishing offenders or giving offenders a second chance through rehabilitation.

While this paper considers some of the complex trade‑offs that policy‑makers face, it does not reach conclusions about whether the ‘right’ trade‑offs are being made.

Nor does this paper consider the root causes of crime, as important as these are. Similarly, it does not focus on the critical issues around youth justice, or the interaction between Aboriginal and Torres Strait Islander people and the criminal justice system. These issues have been examined in detail in several recent reviews and are the subject of ongoing research.

Rather, this paper focuses on imprisonment, its costs and benefits, and some potential alternatives.

The paper begins with a detailed analysis of the data and trends underpinning Australia’s increased rate of imprisonment. The increase in the likelihood of receiving a prison sentence and longer sentences have consistently put upward pressure on imprisonment rates in most jurisdictions. Similarly, an increase in the number of prisoners on remand due to changing bail laws and length of court cases could be an important driver of rising imprisonment rates.

We then apply an economic framework to the underlying objectives and trade‑offs in the prison system. This highlights the complex interactions that policy makers must consider when making decisions about criminal justice. At the same time, the paper draws out some of the key evidence gaps that prevent policy makers from making fully informed decisions.

Finally, we look at some alternative approaches to prison, drawing on case studies from Australia and overseas. Some are about diversion programs that can involve alternative courtroom setups and processes (for example, Victoria’s Assessment and Referral Court); alternative sanctions to prison for low- to moderate‑risk offenders (for example, Operation Checkpoint in the United Kingdom); and restorative justice conferences (for example, the New Zealand model). Some, such as the Australian Capital Territory’s extended throughcare model, which provides continued support to prisoners for 12 months after their release, appear to be effective in reducing recidivism. Sometimes outcomes can be improved in prison, such as through intensive drug treatment or cognitive behaviour therapy (Washington State case studies).

These case studies aim to highlight alternatives for further investigation. Jurisdictions will need to carefully trial and evaluate any policy initiative to ensure that it works, is scalable and meets community expectations.

Building the evidence base — a critical first step

Empirical evidence is key to a proper assessment of the merits of new approaches in different jurisdictions, as well as to good program design and implementation. The Commission has come across some striking gaps in undertaking this project. As an example, the data do not provide a clear picture of how long people stay on remand. Nor is there a good understanding of reoffending patterns once people leave prison.

Some efforts are underway to fill these gaps. A joint project by the Australian Bureau of Statistics and several Australian Government agencies — the Multi‑Agency Data Integration Project — is linking correctional data with other data sources, although data will not be available under this initiative for some time. Some jurisdictions, such as Victoria and Queensland, are also developing linked datasets using administrative data from the criminal justice system.

While there is some compelling Australian‑based research, there are few systematic studies with sufficient empirical depth and theoretical ambition to inform large‑scale policy reform and evaluation. Systematic studies of criminal justice processes and decision making (covering policing, prosecution, sentencing, correction and parole) in the Australian context are largely missing.

We also need more longitudinal studies of pathways through the criminal justice system and how these affect outcomes for different cohorts. As part of this, there remain important questions about the high rate of incarceration of Aboriginal and Torres Strait Islander people and the fast‑increasing female imprisonment rate in several jurisdictions.

There is also an emerging need to look at how new technologies interact with criminal justice: changing the opportunities for criminal behaviour, the ability to detect crime and apprehend criminals, and the range of effective sanctions for criminal behaviour.

While interdisciplinary collaboration is necessary to answer many of these research questions, the economic approach used in this paper provides some valuable insights.

Australia’s criminal justice system imposes a large and growing cost on taxpayers, as well as indirect costs on prisoners, their families and society as a whole. Prisons are expensive, costing Australian taxpayers $5.2 billion in 2019‑20, or more than $330 per prisoner per day on average (SCRGSP 2021a, tables 8A.1 and 8A.19). More than 40 000 people were in Australia’s prisons on 30 June 2020, although many more will flow through the prison system over the course of a year (ABS 2020b). Imprisonment rates — and government expenditure on corrective services — have been rising for several decades in all jurisdictions. Australia’s imprisonment rate is above the OECD average. Prisons are already operating at or above design capacity in some states and territories. If current policies and trends continue, new prison capacity will be needed.

A well‑functioning criminal justice system helps to keep the community safe, is just and fair, and builds community confidence. Ultimately it is a matter for governments to decide on the balance between these sometimes‑conflicting objectives.

However, governments must also consider whether policies deliver desired outcomes at least cost to taxpayers, and to society more broadly. That is the focus of this paper: given the growing direct and indirect costs of prisons, do current policies reduce the harm from crime and provide just and fair punishment at least cost? Are there alternative policies that could reduce costs without compromising community safety, confidence, justice or fairness?

1.1        Australia's criminal justice system

Australia has nine different criminal justice systems

In Australia, there are essentially nine different criminal justice systems (one for each state and territory and the federal system) and eight prison systems (run by states and territories) (Bartels, Fitzgerald and Freiberg 2018). Each criminal justice system has three main components.

•     Law enforcement — comprising police, prosecutors and specialist law enforcement agencies — responds to reported crimes, investigates, arrests suspected offenders and decides whether to proceed with prosecution. Law enforcement is also responsible for crime prevention programs.

•     Courts adjudicate, deciding on the guilt or innocence of suspected offenders, and sentence the guilty. They also decide whether bail should be granted to suspected offenders while they await trial or sentencing.

•     Corrective services administer prisons and supervise offenders who have received community‑based sentences or are on parole. Corrective services also provide rehabilitation and reintegration services to offenders to reduce the risk of reoffending.

State and territory governments have primary responsibility for criminal law and administering police, courts and corrective services. State and territory criminal law and sentencing rules define the types of offences that are considered criminal, circumstances in which bail can be granted, types and lengths of sanctions that can be imposed by courts, and practices surrounding parole and release from prison.

Federal criminal law covers areas including terrorism, people smuggling, drug importation, treason, foreign interference, harassment over telephone or internet and fraud offences, and is enforced by the Australian Federal Police and federal courts (Criminal Code Act 1995 (Cwlth); Daly and Sarre 2017). Prisoners sentenced under federal laws are held in state and territory prisons and comprise 2.6 per cent of all sentenced prisoners in full‑time custody. About 79 per cent of federal prisoners are held in either New South Wales or Victoria (ABS 2021b, tables 2 and 10).

Police services represent the largest component of government expenditure in the criminal justice system (figure 1.1). The share of justice services expenditure that goes to corrective services ranges from 24 per cent in Victoria and South Australia to more than 30 per cent in Western Australia and the Northern Territory.

Figure 1.1 – Government expenditure on Australia’s criminal justice system^a

Dollars per person^b 2019‑20

a. Expenditure includes operating expenditure and capital costs, less operating revenue (for example, revenue from prison industries). Excludes payroll tax and prisoner health and transport/escort costs where able to be disaggregated by jurisdictions, and expenditure on youth justice services. Capital costs include user cost of capital (calculated as 8 per cent of the value of government owned assets), land, other assets, debt servicing fees, and depreciation. b. Per person in the total population of each jurisdiction.

Source: SCRGSP (2021a), table CA.2.

Imprisonment rates have been rising and crime rates falling

Australia’s imprisonment rate — measured as prisoners per 100 000 adults — is at its highest in a century (figure 1.2). The imprisonment rate has more than doubled in Australia since the mid‑1980s and at its peak in 2018 was higher than at any point since 1899 (Leigh 2020b). The imprisonment rate rose by 40 per cent between 2000 and 2018, before falling in 2019 and 2020.[1] Similar trends are evident over the past 20 years in all states and territories (chapter 2).

Figure 1.2 – Imprisonment is at a 100 year high, crime rates are falling^a,b

a. Adults are people aged 18 years and over. b The homicide rate is considered a useful indicator of trends in the incidence of violent crime, as almost all homicides are reported to police and data are available over a long time period (Bricknell 2008; Indermaur 1996).

Source: ABS (Prisoners in Australia, 2020; Recorded Crime – Victims, 2019‑20); Leigh (2020a, table A.1, 2020b, table A1).

Rising imprisonment rates since 2000 have occurred alongside a fall in many types of recorded crime (Weatherburn and Rahman 2021). Between 2000 and 2019 the number of victims of recorded crime (as a proportion of the population) fell by 59 per cent for homicide and related offences (figure 1.2), 42 per cent for kidnapping, 62 per cent for robbery, 70 per cent for unlawful entry with intent, 69 per cent for motor vehicle theft and 37 per cent for other theft from their 2000 levels (ABS 2010b, 2020c). Victimisation rates for some offences have increased over the same period, notably for sexual assault (up 24 per cent) and assault (in some states and territories), and the incidence of drug and firearms offences has also increased (ABS 2010b, 2020c, 2021d).

The overall offender rate (total offenders proceeded against by police per 100 000 population) fell by 18 per cent between 2008‑09 and 2019‑20, while the imprisonment rate rose by 25 per cent over the same period (ABS 2020b, 2021d).

Reconciling rising imprisonment and falling crime rates

The juxtaposition between rising imprisonment and falling crime rates suggests several possibilities:

•     increasing imprisonment caused falling crime rates

•     the Australian criminal justice system has become more punitive over time

•     changes to the characteristics of offenders and/or the composition of crime have resulted in a higher chance of imprisonment among a shrinking pool of offenders.

It is likely that all three have contributed to the decline in crime rates over the period. However, the evidence suggests that changes to the risk of imprisonment and sentence length may have played a smaller role than other criminal justice policies (particularly policing policies that affect the risk of arrest or conviction) (box 1.1).

Box 1.1 – Rising imprisonment played a minor role in explaining falling crime rates

The concurrent rise in imprisonment and fall in crime rates since 2000 begs the question: did increasing imprisonment cause falling crime rates? The available evidence for Australia suggests that other criminal justice policies — notably policing policy — may have played a bigger role than imprisonment in explaining falling crime rates. Other factors including economic conditions are likely to have had a greater impact on crime rates than criminal justice policies. Relatively few Australian studies have looked directly at the links between imprisonment and crime rates, due to data limitations and the difficulty of establishing causation (rather than just correlation). Two Australian studies present rigorous evidence on the relationship between crime and imprisonment, both using local government area‑level data from New South Wales from 1995‑96 to 2007‑08. •     Bun et al. (2020) found that the risks of arrest and conviction had much larger effects on crime rates than the risk of imprisonment, and average sentence length had a small and statistically insignificant impact. This is one of few papers to control simultaneously for the risks of arrest, conviction and imprisonment, as well as sentence length. The results suggest that the risk of imprisonment had only a small additional effect on crime rates once the risks of arrest and conviction were taken into account, and sentence length had no significant impact. The authors argued that ‘the lost social standing resulting from a conviction may well outweigh the effects of prison sentence’ (p. 2323). •     Wan et al. (2012) found that both violent and property crime fell in response to an increase in the risk of arrest and the risk of imprisonment given arrest (they did not control for the risk of conviction in their analyses). The risk of arrest had a bigger impact on crime rates than the risk of imprisonment. Sentence length had no significant effect on either type of crime. Both studies found that economic factors (such as income and unemployment) exerted a much stronger influence on crime rates than criminal justice policies. These findings are based on data from the same time period and jurisdiction, so may not necessarily hold in other states or territories, or in more recent years. However they are consistent with international evidence that the risk of arrest or conviction has a stronger deterrence effect than sentence length (chapter 3). Weatherburn and Rahman (2021) drew together evidence from econometric studies (from Australia and overseas), data on trends in policing, court outcomes and imprisonment rates, and evidence on other factors that may have contributed to falling crime rates between 2000 and 2019. They concluded that criminal justice policy — and imprisonment in particular — played a relatively small role in explaining the decline in crime rates over the period, although increases in the number and effectiveness of police may have been quite important. Other factors that seem to matter include improved economic conditions, better vehicle security, a decline in alcohol consumption, falling demand for stolen goods and a reduction in the use of cash.

There is also evidence of increasing punitiveness in Australia’s criminal justice system. The ratio of prisoners to offenders proceeded against by the police has increased from 8 per cent in 2009 to 11 per cent in 2020 (ABS 2020a, table 40, 2021b, table 1). This is broadly consistent with policy changes in recent years that have reduced the discretion of police, courts and parole boards on matters of bail, sentencing and parole (box 1.2). These changes have often been prompted by high­‑profile cases.[2] Several authors have argued that there has been an increasing emphasis on risk management and an explicit elevation of community safety and victims’ rights as goals of criminal justice policy (Auld and Quilter 2020; Bartels et al. 2018; Freiberg et al. 2018).

While there are some counterexamples, the net effect of most recent policy changes appears to be to increase the likelihood and length of imprisonment, all other things equal.

 

Box 1.2 – Recent policy changes have contributed to increasing punitiveness in Australia’s criminal justice system

Changes to bail policy have made it harder to access bail Until the mid‑1970s, police and courts had discretion to grant bail, with the presumption in favour of bail and the emphasis primarily on ensuring court attendance (Steel 2009) . Changes to bail laws in Australia since 2010 have seen a shift in emphasis to mitigating the potential risks of offending while on bail (Auld and Quilter 2020; Bartels et al. 2018). Many recent changes reverse the presumption of bail or create a presumption against bail in particular circumstances. Applicants must instead ‘show cause’ why bail should be granted. The most substantial changes to bail laws have taken place in Victoria and New South Wales, but there have been changes in all jurisdictions. The main changes include: •     expanding the range of offences for which show‑cause provisions apply, most commonly for terrorism, family and domestic violence, sexual and firearms offences •     applying show‑cause provisions to specific types of defendants, including repeat offenders and members of terrorist or criminal organisations •     imposing conditions on bail being granted, such as participating in treatment or rehabilitation programs or surrendering passports or weapons •     requiring police or courts to notify victims of family violence when there is a change to bail conditions in a case that they are involved in •     expanding the use of electronic monitoring during bail (Auld and Quilter 2020; Bartels et al. 2018; Travers et al. 2020b). In their analysis of bail amendments in New South Wales, Victoria and Queensland between 2009 and 2018, Auld and Quilter (2020, p. 648) reported that 52 per cent of amendments had decreased access to bail, 14 per cent increased access to bail and the remainder were administrative changes. Courts have less discretion on sentencing Criminal laws in Australia typically set maximum penalties for offences, leaving judges to decide on the type and severity of penalties, taking into account mitigating and aggravating circumstances (such as the background of an offender and previous offending history) (Gray 2017; Roth 2014a). Since the 1990s, Western Australia and the Northern Territory have had mandatory or presumptive sentencing laws for some offences. Such laws diminish or remove judges’ discretion by setting out a minimum or fixed penalty that must be imposed for a particular offence or type of offender (for example, for repeat offenders) (Roth 2014a, p. 2). Since 2010, the scope of mandatory sentencing laws has been increased in Western Australia and the Northern Territory to cover a broader range of offences (Law Council of Australia 2014; Law Society of Western Australia 2020). In addition, mandatory sentences have been legislated in New South Wales, Queensland, Victoria and by the Commonwealth for a range of offences including so‑called one‑punch attacks, criminal organisation activity, terrorism and people smuggling (Law Council of Australia 2014; Quilter 2014). New South Wales, Victoria and Tasmania have also abolished or are phasing out the use of suspended sentences (Freiberg 2019, pp. 82–83). The use of parole is increasingly focused on safety rather than rehabilitation Parole — conditional release that allows a prisoner to serve some of their sentence in the community — has traditionally been seen as a means of integrating prisoners back into the community and reducing the risk of reoffending (Freiberg et al. 2018). Since 2010, Victoria, Queensland, New South Wales and South Australia have all made changes to parole laws that reduce the discretion of courts and parole boards and emphasise community safety as a paramount consideration when parole is granted, including: •     setting standard or minimum non‑parole periods for particular offences •     bypassing parole boards when deciding whether to release specific prisoners or those convicted of particular offences on parole •     placing greater emphasis on victims’ rights when making decisions about parole (Freiberg et al. 2018). Freiberg et al. (2018, p. 214) argued that tighter parole conditions are likely to increase imprisonment rates by increasing parole suspensions, increasing the likelihood of prisoners being held on parole for longer (or not applying for parole), and increasing recidivism by giving prisoners fewer chances to reintegrate into society on supervised parole programs.

Finally, while crime rates may have fallen in aggregate, there has been a change in the composition of crime, with falls in property crime offset by increases in other more serious offences such as assault (including sexual assault) and drug crime. Further, it appears that in New South Wales, while there has been a large reduction in the number of young people committing crime for the first time, there has also been an increase in ‘chronic’ offenders who committed crime at a higher rate (Payne, Brown and Broadhurst 2018). These factors have increased the average severity of crime, which might result in an increase in the severity of sentences and rising imprisonment.

Rising imprisonment is costly

Rising imprisonment rates have increased the fiscal costs of running the criminal justice system. Real government expenditure on corrective services grew by 40 per cent over the seven years to 2019‑20. Between 2011‑12 and 2019‑20, government expenditure on prisons as a percentage of total government expenditure grew in all jurisdictions except New South Wales (chapter 3).

Prison is an expensive sentencing option, with expenditure per prisoner per day ranging from $294 to $559 across Australian jurisdictions in 2019‑20. The average daily cost of keeping an offender in prison is about ten times the cost of a place in a community corrections program (chapter 3).

Imprisonment also imposes indirect costs on prisoners, their families and society, including lost employment, poor health and family separation. Of course, punishment for crime is designed to impose costs on those who commit crime, in order to deter criminal behaviour or exact retribution for crime. However, at least some of these indirect costs are likely to be the unintentional result of imprisonment or fall on prisoners’ families or society more broadly. Chapter 3 examines the direct and indirect costs of imprisonment in more detail.

1.2        Trade‑offs in the criminal justice system

The objectives of the criminal justice system

Governments can use a range of policy levers to directly influence the criminal justice system. They make laws and regulations that define what is a criminal offence and set some parameters for sanctions (for example, maximum and, increasingly, minimum sentences). They also manage and fund the main components of the criminal justice system: law enforcement, courts and corrective services.

A well‑functioning criminal justice system should (figure 1.3; box 1.3):

•     keep the community safe by reducing crime through deterrence, incapacitation and rehabilitation

•     be just and fair to victims and offenders by punishing offenders based on the crime committed

•     build community confidence, ensuring voluntary community participation (such as by reporting crime or acting as witnesses or jurors).

The role that prisons play in meeting the objectives of the criminal justice system through punishment, deterrence, incapacitation and rehabilitation is discussed in more detail in section 3.1.

Figure 1.3 – The objectives of the criminal justice system

Box 1.3 – What are the objectives of the criminal justice system?

Making the community safer by reducing the harm from crime is a key objective of Australia’s criminal justice systems, and has been highlighted as a central aim of government in several states and territories (for example, New South Wales Government 2021, p. v; Queensland Government 2018a, p. 1). Reducing crime improves community wellbeing by reducing the direct costs of crime and crime avoidance, improving community coherence and ensuring that property rights are enforced (QPC 2019a, p. 7). Community safety is pursued through the deterrence, incapacitation and rehabilitation functions of the criminal justice system. These sub‑objectives are outlined in state and territory sentencing laws. For example, the Crimes (Sentencing Procedure) Act 1999 (NSW) states that the purposes of sentences imposed by courts include: ‘to prevent crime by deterring the offender and other persons from committing similar offences’, ‘to protect the community from the offender’ and ‘to promote the rehabilitation of the offender’ (s. 3A).a Recent reforms to sentencing and bail legislation in several states and territories have explicitly highlighted community safety as a priority (Auld and Quilter 2020; Bartels et al. 2018; Freiberg et al. 2018). Justice and fairness for victims and offenders are also emphasised in sentencing rules and practices. Notions of justice, including retribution and restoration, feature strongly in sentencing legislation. For example, in New South Wales the Crimes (Sentencing Procedure) Act includes among the purposes of sentencing: ‘to ensure that the offender is adequately punished for the offence’, ‘to make the offender accountable for his or her actions’, ‘to denounce the conduct of the offender’ and ‘to recognise the harm done to the victim of the crime and the community’ (s. 3A).a Fairness is emphasised in sentencing principles in common law, including that the sentence is proportional to the crime, parity (treating like cases alike and different cases differently), imprisonment being a last resort, and imposing the least severe sentence that can be used to achieve the purpose of punishment. Sentencing guidelines also require courts to take into account mitigating and aggravating circumstances in each case (ALRC 2017, pp. 187–188). Community confidence in the criminal justice system, as well as being desirable in its own right, is also important for the system to function effectively. For instance, the participation of victims and members of the public is vital for policing (to report crime, provide evidence and as witnesses) and court proceedings (as jurors) (Daly and Sarre 2017, p. 7; Indermaur and Roberts 2009). Legitimacy and trust encourage compliance with the law and influence cooperation with the police (Murphy, Mazerolle and Bennet 2014; Tyler and Fagan 2010) and may affect whether crimes are reported in the first place (Carcach 1997; Tyler 2011). That said, the evidence that confidence affects reporting of crimes is mixed for a number of reasons, including attitudes being imperfect predictors of behaviour, poor measures of complex attitudes towards police and the justice system, and variation in the effect of attitudes at national and local levels (Xie and Baumer 2019). a. Similar purposes are outlined in sentencing legislation in other states and territories.

A balancing act

Often, the objectives of the criminal justice system are aligned. For instance, a sanction that achieves justice for victims will often also deter potential offenders. If a sanction involves time spent in prison, the offender will be incapacitated and prevented from offending again while in custody. Incapacitation also offers the opportunity to rehabilitate the offender, which, if done well, can reduce their risk of reoffending when released.

However, sometimes these objectives come into conflict. For instance, a long prison sentence might meet the community’s desire for justice for victims, but be excessively harmful for offenders and their families, and increase the risk of reoffending.[3] If this is the case, there can be a conflict between justice for victims and offenders, between justice and community safety, and between community safety in the short term and in the long term.

The objective of community confidence can also come into conflict with other objectives. Community confidence in the criminal justice system relies on the public being well‑informed about the system. This is not always the case, particularly for extremely rare but highly visible and harmful criminal acts. Public reactions to such events may create a desire for stronger sanctions or the removal of alternatives to imprisonment. This may reduce the fairness of the system and could reduce community safety in the longer term. For example, if sanctions are already severe, then making sentences harsher could have a minimal deterrence effect, be disproportionate to the offence committed (and thereby fail to be just and fair), and hamper the ability of corrective services to rehabilitate offenders, increasing the likelihood of reoffending.

1.3        Scope of the paper

What is in scope?

Public inquiries, reviews and academic research on the criminal justice system in recent years[4] have highlighted a range of critical issues including:

•     high and growing imprisonment rates, and associated costs

•     the importance of socio-economic disadvantage in driving offending

•     significant over-representation of Aboriginal and Torres Strait Islander people in the criminal justice system

•     high rates of mental ill health and drug (including alcohol) dependency among offenders

•     rapid growth in the proportion of prisoners who are on remand

•     high rates of reoffending and churn within the criminal justice system

•     strong links between youth and adult offending.

This paper is the Commission’s first step into research on the criminal justice system. As such, the scope is deliberately narrow, focusing on imprisonment and its costs, benefits and alternatives. While the focus is largely on prisons, it is important to consider how decisions made at one point in the criminal justice system affect outcomes at other points (figure 1.4). As such, policing and courts are covered to the extent that trends and policies in these areas affect imprisonment rates and outcomes.

Figure 1.4 – Many policy decisions affect the likelihood of imprisonment

What is not in scope?

The paper does not attempt a systematic examination of the criminal justice system. Similarly, it does not delve into the underlying socioeconomic drivers of crime and imprisonment, as important as these are.

Where possible, the paper presents data on trends for Aboriginal and Torres Strait Islander people, who make up a disproportionately large part of the prison population. However, the paper does not focus in detail on the important, yet complex, issues that are specific to the incarceration of Aboriginal and Torres Strait Islander people. These have been examined in detail in several recent reviews (ALRC 2017; QPC 2019a; Senate Finance and Public Administration and References Committee 2016) and are the subject of ongoing research (for example, Donnelly et al. 2021).

The disproportionately high imprisonment rate of Aboriginal and Torres Strait Islander people is a critical area that has been flagged for action. The National Agreement on Closing the Gap aims to reduce the imprisonment rate for Aboriginal and Torres Strait Islander adults by at least 15 per cent by 2031. It specifically highlights the need to better measure and report on access to services in police custody and prison (including community‑controlled and culturally appropriate legal, health, rehabilitation and family support services), interactions between Aboriginal and Torres Strait Islander people and police, and to use data linkage to examine long‑term outcomes for Aboriginal and Torres Strait Islander offenders (JCOCTG 2020, outcome 10).

Likewise, the paper does not cover issues relating to youth justice, focusing more narrowly on the interactions of adults with the criminal justice system. While there are strong correlations between youth and adult offending, the youth justice system has been the subject of numerous recent reviews and inquiries (Clancey, Wang and Lin (2020) survey themes from recent reviews).

Our approach

The paper uses an economic approach to examine imprisonment and its alternatives. Economics can provide valuable insights into the complex trade‑offs facing policy makers in the criminal justice system. However, it is important to recognise that this is only one perspective. The findings from this paper are intended to complement those that use other approaches such as criminological, rights‑based or risk analyses.

In general terms, an economic approach assumes that policy makers aim to maximise the welfare of the Australian community — through some combination of community safety, justice, fairness and community confidence — at the lowest cost to taxpayers and to society as a whole. Substantive changes to criminal justice policies or practices should therefore be assessed by weighing their benefits against their costs. When assessing the costs and benefits of a proposed policy (or practice) change, it is important to look at the full range of costs and benefits, as well as consider potential trade‑offs between short‑ and long‑term costs and benefits. For example, a policy change could have a positive short‑term impact, but negative long‑term consequences for costs, effectiveness or both.

Economics also provides insight into how individuals and groups respond to incentives. The ‘economics of crime’ literature that began with Becker (1968) characterised, among other things, the trade‑offs that individuals face when considering the payoffs from crime against outside economic options such as employment. This prompts policy makers to consider how a broad range of factors that affect economic opportunities can affect the outcomes of criminal justice policies and programs.

Decision making in the criminal justice system often entails assessing and managing risk. Adopting an economic approach that considers relevant trade‑offs can help to put risk into a broader context. For example, when a court decides whether to release an offender on bail, they take into account (among other things) the risk that the offender will fail to attend future court hearings or will reoffend while on bail. A simple solution focused purely on mitigating risk could see all offenders refused bail. However, a broader examination would highlight the trade‑offs. It might show that the reduced risk to community safety from such a policy is outweighed by the fiscal cost (of remanding more people) and indirect costs, including reduced confidence in the fairness of the criminal justice system.

Many of the costs and benefits of criminal justice policies and programs are hard to measure. While the direct fiscal costs of policing, courts and corrective services are relatively well measured (SCRGSP 2021a), indirect costs — including lost income, poor health or family disruption — are much harder to quantify. Likewise, measuring the benefits of criminal justice policies and programs (such as reduced crime, a fairer justice system or improved community confidence) is complicated, both because such things are inherently difficult to measure, and because it is difficult to attribute any changes to a specific policy or program.

Nevertheless, economics is a useful framework for examining the costs, benefits and consequences of policy alternatives.

This paper is largely a desktop review. It draws on published data from the Australian Bureau of Statistics, the Report on Government Services (SCRGSP 2021a), state and territory justice and corrections departments and the Australian Institute of Health and Welfare, as well as existing literature from Australia and overseas. The research presented in this paper has been limited by the lack of accessible, comparable and high‑quality data, particularly a dearth of microdata that could be used to track transitions through the criminal justice system and evaluate outcomes. Chapter 5 highlights areas where further data and research would be valuable to inform ongoing policy making in the criminal justice system.

The Commission also consulted with a range of stakeholders, including academics, officials from state and territory government agencies and experts from the United States, United Kingdom and New Zealand (appendix A). The Commission would like to thank all participants for their time and valuable insights.

A road map

The paper starts by examining trends in imprisonment and the characteristics of the prison population (chapter 2), including the drivers that may have contributed to growth in Australia’s imprisonment rate (appendix B).

It then looks at the costs and benefits of imprisonment (chapter 3) and considers several case studies of policy approaches to criminal justice that have been effective in reducing costs and achieving positive outcomes for individuals and the broader community (chapter 4).

The final chapter (chapter 5) highlights areas that warrant further data and research.

Key points
	Most prisoners come from disadvantaged backgrounds. Prisoners have a disproportionately high rate of physical and mental ill health and many have complex needs.
	While imprisonment rates have increased in all jurisdictions, imprisonment levels differ substantially. Imprisonment rates are highest in the Northern Territory and Western Australia. Imprisonment growth has been driven by different factors in each jurisdiction.
	Imprisonment growth has been higher among women in several jurisdictions, particularly since 2010. Nonetheless, men still make up the bulk of the prison population.
	While the majority of Aboriginal and Torres Strait Islander people do not have any contact with the criminal justice system, Aboriginal and Torres Strait Islander people are vastly overrepresented in Australian prisons — comprising 3 per cent of the Australian population but 29 per cent of prisoners — and have also seen the most growth in imprisonment rates over the past two decades. Imprisonment rates are also increasing for non‑Indigenous people across all jurisdictions.
	More than half of prisoners were charged with violent offences including assault and sexual assault. Even so, about 15 per cent of prisoners were charged with offences which have not caused direct harm to others but exposed others to risk of low- to medium‑level harm, or caused harm to self, such as drug‑use offences. The composition of offences (by most serious offence) appears to be changing over time. Fewer people are in prison for property offences but more for violent and drug offences.
	A third of the prison population is on remand, awaiting trial or sentencing. This proportion has almost doubled since 2000. The average time spent on remand has increased to 5.8 months in 2020 from 4.5 months in 2001. Remand creates uncertainty for prisoners, victims and corrective services. Remandees typically have limited access to services available in prison such as rehabilitation programs.
	The recidivism rate has been rising in most jurisdictions over the past ten years with about 60 per cent of prisoners having prior convictions. This figure is high by international standards.
	High recidivism rates and large numbers of prisoners on remand or serving short sentences suggest that many prisoners cycle in and out of prison. This is more common among Aboriginal and Torres Strait Islander people.

Australia’s imprisonment rate has increased substantially since the mid-1980s (chapter 1). As at 30 June 2020, Australia had 41 060 adults in prison (ABS 2020b), including both those who have been proven guilty and sentenced to time in prison, and those still awaiting their trial or sentencing (remandees).

As context for the remaining chapters in this paper, this chapter looks more closely at the characteristics of the prison population (section 2.1). Following this is an exploration of trends in imprisonment (section 2.2), offence type and sentencing (section 2.3), remand (section 2.4) and recidivism (section 2.5).

2.1        The prison population

The demographic profile of the prison population differs from that of the general population across several dimensions. Most prisoners are male, relatively young, disproportionately Aboriginal and Torres Strait Islander people, and from low socioeconomic backgrounds. The prison population is also generally characterised by poor health, a high level of illicit drug use and alcohol abuse, and high prevalence of mental ill health and experiences of trauma (figure 2.1).

These characteristics highlight the complex needs of the Australian prison population. This, in turn, suggests that sentencing, rehabilitation and throughcare[5] programs need to be well targeted to be effective and to best use the criminal justice system’s resources. Some case studies exemplifying more targeted approaches are explored in chapter 4.

Many prisoners are from disadvantaged backgrounds

The prison population comes from disproportionately disadvantaged backgrounds compared to the general population. Factors such as unemployment, lower educational attainment, intergenerational incarceration, previous imprisonment, substance abuse and mental illness are considered to be risk factors correlated with imprisonment (SCRGSP 2020b). In 2018, 23 per cent of prison entrants aged 25–34 were unemployed compared to 4.8 per cent of the same age group in the general population (measured in the 2016 census). People in prison are also less likely to have completed high school. Of prison entrants aged 25–34, 78 per cent have not completed high school compared to 20.5 per cent of this age group in the general population. Moreover, prisoners are more likely to have experienced homelessness before entering prison: in 2018, 5.3 per cent of prison entrants were sleeping rough or in non‑conventional housing compared to 0.035 per cent in the general population (ABS 2017; AIHW 2019a).

Many prisoners have complex health needs. As well as a high prevalence of mental ill health, some prisoners suffer from chronic health conditions and have histories of substance abuse, smoking, and trauma. In New South Wales, in 2015, 65 per cent of prisoners had experienced or witnessed at least one traumatic event and about one third of prisoners reported having previously suffered some kind of head injury (JHFMHN 2020). Having experience of family violence is also a risk factor for future offending. A study of Aboriginal mothers incarcerated in Western Australia found that women who reported using violence were more likely to have experienced it themselves. Of those mothers who reported using violence, 91 per cent had experienced family violence compared to 77 per cent of those mothers who did not report using violence (Wilson et al. 2017).

Figure 2.1 – The prison population^a,b

a. Characteristics of Australian prisoners. b. Prison entrants data are taken from the Australian Institute of Health and Welfare’s prisoner survey and do not include New South Wales. Data from New South Wales are broadly consistent with these findings. Most recent data are used and mostly covers the period 2015–20

Source: ABS (Prisoners in Australia, 2020); AIHW (2019a); Justice Health and Forensic Mental Health Network (2020).

These complex needs have implications for prison costs — including the indirect costs of imprisonment on families and the broader community — and how prisons can best tailor rehabilitation programs. Chapter 3 explores both the direct and indirect costs of prison in detail.

The prison population is young, but ageing

Australia’s prison population is young relative to the general population. In 2019 the median age for adult prisoners was 35.2 (compared to 43.5 for the general population) and the mean was 37.3 (compared to 45.3).

However, Australia’s prison population is steadily ageing.

•     The mean age of prisoners has increased from 33.8 in 2002 to 37.3 in 2020.

•     The median age of prisoners has increased from 32 in 2002 to 35.2 in 2020 (ABS 2020b).

This increase has ramifications for the type and costs of health services that may need to be provided to prisoners over time. In the United States one, report suggested that in 2015 prisoners aged 50 and over cost about 8 per cent more to imprison than their younger counterparts (Office of the Inspector General 2020). Older people in prison tend to have higher rates of chronic conditions such as diabetes, heart disease, and liver disease compared to young people in prison (Skarupski et al. 2018).

Most prisoners are aged between 25 and 44, although Aboriginal and Torres Strait Islander prisoners tend to be younger (figure 2.2). This reflects the relative young age of Aboriginal and Torres Strait Islander people compared with the non‑Indigenous population, as well as the fact that Aboriginal and Torres Strait Islander prisoners tend to have contact with the criminal justice system at a younger age than non‑Indigenous prisoners (QPC 2019b).

Figure 2.2 – The demographic profile of people in prison

Proportion of people in prison by age and Indigenous status, 2020

Source: ABS (Prisoners in Australia, 2020).

Mental ill health is more prevalent in prisons

The overrepresentation of mental illness amongst prisoners is well established in Australia and overseas (Fazel and Seewald 2012; Stewart et al. 2020). Two in five Australian prison entrants from jurisdictions participating in the Australian Institute of Health and Welfare’s (AIHW) prisoner survey[6] report having a previous diagnosis of mental illness (figure 2.3) (AIHW 2019a). This is much higher than the estimated prevalence in the general population aged 18 and over (22 per cent), although the data are not directly comparable (PC 2020, p. 1016).[7] Commonly, prisoners suffer from depression, anxiety, drug abuse and dependence, and post‑traumatic stress disorder. Mental ill health may be even more prevalent amongst people on remand (PC 2020, p. 1016).

People in prison are also more likely to suffer from comorbidities than people in the community. For example, people in prison with post‑traumatic stress disorder are at higher risk of major depression, agoraphobia, substance abuse or dependence and of being at moderate or high risk of suicide (Fovet et al. 2021). People with these types of comorbidities have a higher risk of reoffending (Stewart et al. 2020).

Prevalence of mental illness is higher among some groups of prisoners. Women in prison are more likely to have a history of mental illness than men — in 2018, 65 per cent of females compared with 35 per cent of males reported a previous diagnosis of mental illness (PC 2020, p. 1016).

There are various estimates of mental ill health prevalence amongst Aboriginal and Torres Strait Islander prisoners. While Aboriginal and Torres Strait Islander prisoners have lower rates of self‑reported mental ill health than non‑Indigenous prisoners, there is evidence that mental ill health affects 70–90 per cent of imprisoned Aboriginal and Torres Strait Islander people (PC 2020, p. 1017). While it is difficult to tell, this tendency to under‑report might explain the relatively low rates of self‑reported mental health diagnoses amongst those entering prison in Western Australia and the Northern Territory (figure 2.3).

Moreover, Aboriginal and Torres Strait Islander women in prison have a higher incidence of mental ill health than Aboriginal and Torres Strait Islander men or non‑Indigenous women. A study of Aboriginal and Torres Strait Islander people in Queensland prisons found that 51 per cent of Aboriginal and Torres Strait Islander women in the sample, compared with 20 per cent of Aboriginal and Torres Strait Islander men, suffered from anxiety. In the same sample, 29 per cent of women compared with 11 per cent of men suffered from depression and 23 per cent compared with 8 per cent suffered from psychotic disorders (Heffernan et al. 2012). Data from a prisoner cohort born in 1990 found that 44 per cent of non‑Indigenous women in prison had mental ill health compared with 52 per cent of Aboriginal and Torres Strait Islander women (Stewart et al. 2020). These differences highlight the importance of considering gender, Indigenous status and other characteristics when considering the needs of people in prisons.

The Commission’s inquiry into mental health found that the relationship between offending and mental ill health is not straightforward (PC 2020, p. 1019). Some factors which lead to the overrepresentation of people with mental ill health in prison include deinstitutionalisation from mental health facilities, use of illicit substances, limited capacity of mental health services and social determinants.

Figure 2.3 – Mental illness is common among prison entrants

Per cent of prison entrants that report having a previous diagnosis of a mental health disorder by jurisdiction, 2018^a,b

a. Mental health disorders are inclusive of alcohol and other drug‑use disorders. b. NSW data from 2019.

Source: AIHW (2019a); JHFMHN (2020).

 

Finding 2.1

Prisoners are much more likely to be male and Aboriginal and Torres Strait Islander than the general population. Prisoners tend to have lower educational attainment and are more likely to have been homeless and unemployed prior to imprisonment than the general population. Many have been in prison before. Prisoners have disproportionately high rates of physical and mental ill health. In addition, the prison population is young but ageing despite the notably younger age distribution of Aboriginal and Torres Strait Islander people in prison. This has implications for the type and costs of health services that may need to be provided. The clustering of disadvantage, overrepresentation of Aboriginal and Torres Strait Islander people and the heterogeneity of the prison population suggests that solutions to recidivism and alternatives to imprisonment need to be tailored to individual needs.

2.2        Imprisonment rates

For every 100 000 people in Australia 202 are imprisoned. Notwithstanding the downward trend in 2019‑20, the national imprisonment rate has increased by 35 per cent since 2000 — a trend that is broadly reflected across all states and territories (figure 2.4).

Figure 2.4 – Imprisonment rates increased in all jurisdictions

Prisoners per 100 000 people (adult population)

Source: ABS (Prisoners in Australia, 2012 and 2020).

Imprisonment rate levels vary across states and territories

Against the rising national trend, there is clear variation in the levels of imprisonment across Australian jurisdictions.

The Northern Territory has the highest overall imprisonment rate in Australia (measured on the right hand side axis in figure 2.4) and stands as an outlier compared to other states and territories (ABS 2020b). The Northern Territory’s imprisonment rate is higher than that of the United States, which has the highest imprisonment rate of any country in the world (Institute for Crime and Justice Policy Research 2021).

As outlined in chapter 1, Australia has nine criminal justice systems (one for each state and territory and the federal system) and eight prison systems (run by states and territories) (Bartels, Fitzgerald and Freiberg 2018). This gives rise to different approaches in legislation and policies as well as different interpretations of common law. These variations often reflect distinct historical contexts, differing cultures and political discourses.

For example, imprisonment policies in New South Wales have ebbed and flowed substantially as a response to political discourse. Policies have ranged from decriminalisation and sentence shortening in the 1970s to numerous changes to bail legislation between 1992 and 2008. Bail legislation changes preceded a doubling of bail refusal rates between 1995 and 2005 (Tubex et al. 2015).

On the other hand, Western Australia has had a more consistent history of using imprisonment as a response to crime. For example, Western Australia was one of the first jurisdictions to introduce mandatory sentencing practices for non‑violent offences in 1992 (Tubex et al. 2015; Tubex, Blagg and Tulich 2018). This policy approach is reflected in the high levels of imprisonment in Western Australia.

Growth in imprisonment rates is driven by different factors in each jurisdiction

Prison is the final point in a complex set of decisions within the criminal justice system. As such, a range of factors can potentially drive increases in the number of people in prison. These include:

•     the number of people offending, being brought to court, found guilty and then sentenced

•     the average length of sentences

•     shifts in the composition of offending towards more serious offences that have a bearing on the number of people sentenced and the length of sentencing.

Disentangling the drivers of rising imprisonment is complicated by data limitations. Nevertheless, the Commission’s analysis of the drivers of imprisonment (appendix B) uses two approaches to look at factors that affect the rate at which individuals arrive in prison and the length of prison stays. These factors include the severity of offences, length of sentences, time on remand (which is influenced by court processing times) and policies regarding parole.

The first approach adopts a mathematical model — called ‘Little’s Law’ (Little 1961) — to disentangle and compare the relative contribution of each factor to the imprisonment rate. The results are summarised in figure 2.5, with associated caveats noted in box 2.1.

As a complement to Little’s Law, the second part of the analysis examines  trends in each factor and draws on the literature to identify some of the underlying drivers.

Looking at the results across both approaches, the analysis found that although the relative importance of some drivers varies across jurisdictions, there are some common themes.

•     Imprisonment grew in all jurisdictions while offending (as measured by the number of offenders proceeded against by police) mostly fell between 2011‑12 to 2018‑19. In jurisdictions where offending increased, imprisonment still grew faster than offending.

•     Changes in court outcomes and policing policies towards more punitive policy settings are important drivers of increasing imprisonment rates. For example, focussed deterrence strategies that target high‑risk and repeat offenders may increase the likelihood that offenders are sent to prison.

•     A shift to more serious offending was likely a key driver of higher imprisonment rates in Victoria and Queensland. In Western Australia and Tasmania, a shift to more serious offending likely dampened the effect of falling numbers of offenders proceeded against by police rather than contributing to increased imprisonment rates.

•     Growth in the number of people on remand accounted for about two thirds of the growth in imprisonment rates, suggesting bail laws or the duration of court cases could be important drivers of imprisonment. However, available data do not separate out people on remand who are subsequently found not guilty or do not receive a prison sentence at an individualised level. This makes it difficult to assess the extent to which the growth in remand has added to the total number of people in prison or simply shifting some imprisonment from post‑ to pre‑sentencing. Court cases per offender (the chance an offender was taken to court) was relatively stable or decreased in most jurisdictions.

•     Overall, the severity of court outcomes has increased to varying degrees:

–   court cases were more likely to end in a guilty verdict in 2018‑19 than in 2011‑12 in the Northern Territory and the ACT (figure 2.5)

–   people found guilty were more likely to be sentenced to prison in 2018‑19 than in 2011‑12 in all jurisdictions. The analysis suggests that this was the first or second most important driver of increased imprisonment in all jurisdictions except New South Wales (figure 2.5). Both police and penal policy likely contributed to this increase

–   half of the jurisdictions saw an increase in the average sentence length. This was the most important driver of imprisonment for the national average as well as in New South Wales. It was also an important driver of imprisonment in Tasmania and Queensland (figure 2.5).

Figure 2.5 – The relative importance of factors driving imprisonment differ across jurisdictions^a,b,c

	Offender count	Offender composition	People held on remand	Time on remand	Chance offender is taken to court	Chance a court case is found guilty	Chance a guilty person is sent to prison	Average sentence length
NSW
Vic
Qldd
SA
WA
Tase
NT
ACT
Australia

 

	Most upward pressure		Most downward pressure
	Second most upward pressure		Second most downward pressure

a. The analysis holds each factor constant in turn to see how the absence of change in a factor (for example average sentence length) affects imprisonment numbers. Colours and arrows represent how much pressure and in what direction each variable held constant under the scenario put on imprisonment. Orange boxes with upward arrows suggest that in the absence of change in that factor imprisonment might have been lower, meaning the factor placed upward pressure on imprisonment numbers. Similarly, blue boxes with downward arrows suggest that imprisonment might have been higher, meaning the factor placed downward pressure on imprisonment numbers. b. See table B.2, appendix B for further information underpinning these measures. For example, people held on remand measures the number of people placed on remand who were not subsequently sentenced to imprisonment. c. The effect of offender composition does not imply that a compositional change increased imprisonment rates. In some cases a positive compositional effect simply means the compositional change slowed the fall in imprisonment implied by the fall in total offending d. For Queensland, offender composition was a close third for most upward pressure (table B.2). e. For Tasmania, average sentence length was a close third for most upward pressure (table B.2).

Source: Commission estimates based on ABS (Criminal Courts 2012 to 2020 and custom data request; Prisoners in Australia, 2020; Recorded Crime – Offenders, 2021).

Box 2.1 – Little’s Law: some caveats

Data limitations and the simplification of complex decisions that lead to prison can mean that some important components are not perfectly accounted for by Little’s Law: •     measures of time on remand are imperfect and are likely to bias downward the estimate of time spent in prison (box B.3, appendix B) •     parole decisions are not observed in the data used •     the underlying factors that drive imprisonment growth are usually not independent from one another and the model is unable to account for this •     the analysis in appendix B does not account for the underlying circumstances of an alleged offender or their characteristics. As such heterogeneity in what drives imprisonment growth in different groups is not apparent in the aggregate data used •     the analysis compares differences in variables between two points in time and treats both points as a steady state. This will tend to under‑represent the importance of variables whose path is not evenly changing between those points in time. A dynamic modelling approach would be required to identify transition effects (see, for example, Halloran, Watson and Weatherburn 2017; Johnson and Raphael 2012).

 

Finding 2.2

While the key drivers of imprisonment differ between jurisdictions, more punitive policy measures such as  increases in the likelihood of receiving a prison sentence and longer sentences, were important drivers of growing imprisonment rates across most jurisdictions between 2011‑12 and 2018‑19. Similarly, an increase in the number of prisoners on remand due to changing bail laws and length of court cases appears to be an important driver of rising imprisonment rates. A compositional shift to more serious offences cannot be ruled out as an underlying driver, but is only likely to be important in some jurisdictions.

Australia’s imprisonment growth is third highest in the OECD

While Australia’s imprisonment rate is just above the OECD average (figure 2.6, panel a), imprisonment growth in Australia is high by international standards (figure 2.6, panel b). The rate of increase in Australia’s imprisonment rates between 2003 and 2018 was among the fastest in the OECD at 39 per cent. Only Turkey (120 per cent) and Colombia (46 per cent) experienced faster growth in imprisonment between. By contrast, the imprisonment rate grew by 29 per cent in New Zealand, and fell by 1 per cent in Canada and the United Kingdom, and by 14 per cent in the United States over a similar period.

Figure 2.6 – Australia’s imprisonment rate has grown faster than most OECD countries

a. Imprisonment rate per 100 000 people, in 2018

b. Imprisonment rate growth between 2003–2018

a. Imprisonment rates for Australia differ here from figure 1.2 because they are based on the total population, rather than the adult population which is limited to those aged 18 and above. b. 2003–2017 for Canada; 2004–2018 for Luxembourg and Belgium; 2005–2018 for Austria. c. Data for United Kingdom are for England and Wales.

Source: United Nations Office on Drugs and Crime (2019).

Imprisonment rates are growing faster for some groups

Another feature of Australia’s imprisonment trends is that imprisonment rates are increasing faster for some demographic groups. While women comprise only 7.7 per cent of the national prison population, female imprisonment rates have increased faster than male imprisonment rates nationally and in several jurisdictions (figure 2.7). This faster growth in female imprisonment has been common across Western countries including New Zealand, the United Kingdom and the United States.

Figure 2.7 – Female imprisonment rates are increasing

Indexed imprisonment rates by jurisdiction and sex, 2002 to 2020^a

a. Indexed to 2002.

Source: ABS (Prisoners in Australia, 2012 and 2020).

There is some evidence from New South Wales that much of this increase has been driven by more women presenting to courts as repeat offenders. In 2011, 18 per cent of women appearing before courts had one or more prior court appearances. By 2017, this number had increased to 46 per cent. This could reflect women’s changing criminal behaviour or changes to policing practices. There is little evidence that women are committing more serious crimes or spending longer in prison (Ooi 2018). That said, the growth may be driven by different factors in different jurisdictions.

Additionally, Aboriginal and Torres Strait Islander people are vastly overrepresented in the Australian prison system. Aboriginal and Torres Strait Islander people comprised 3.3 per cent of the national population but 29 per cent of the prison population in 2020. In the Northern Territory, Aboriginal and Torres Strait Islander people make up 84 per cent of the prison population but only 30 per cent of the total population. Aboriginal and Torres Strait Islander people’s overrepresentation is a central and persistent issue for Australia’s criminal justice system, and some of the underlying reasons are explored in box 2.2.

 

Box 2.2 – Why are imprisonment rates so high for Aboriginal and Torres Strait Islander people?

Aboriginal and Torres Strait Islander people comprise about 3 per cent of the Australian population and yet account for 29 per cent of the prison population (ABS 2020b). While the majority of Aboriginal and Torres Strait Islander people have never committed a criminal offence, the overrepresentation of Aboriginal and Torres Strait Islander people in prison remains a central and persistent issue for Australia’s criminal justice system. The rate of imprisonment for Aboriginal and Torres Strait Islander people is 13.3 times the non‑Indigenous imprisonment rate. Explanations for the relatively high imprisonment rate of Aboriginal and Torres Strait Islander people are well documented in various landmark reports, inquiries and reviews including the Royal Commission into Aboriginal Deaths in Custody (1991) and Australian Law Reform Commission (2017). The research points to a range of risk factors for offending — including low socioeconomic status, child maltreatment, unemployment, poor education, cognitive impairment, poor mental health, exposure to violence and family dysfunction, homelessness, and substance misuse — that are more prevalent among Aboriginal and Torres Strait Islander people (SCRGSP 2020b; Shepherd et al. 2020). The higher prevalence of risk factors among Aboriginal and Torres Strait Islander people stems in part from experiences of dispossession, forced removal, intergenerational trauma and racism (ALRC 2017; SCRGSP 2020b). Structural and systemic factors could also work to the detriment of Aboriginal and Torres Strait Islander people because of the particular circumstances and disadvantage they are more likely to experience. For example, mandatory sentencing for particular offences (including property crime) has been cited as disproportionally affecting Aboriginal and Torres Strait Islander people (ALRC 2017). Socioeconomic disadvantage, community and cultural obligations can make it difficult for some Aboriginal and Torres Strait Islander people to meet strict bail and parole conditions (NATSILS 2017). Many Aboriginal and Torres Strait Islander people report discrimination, racism and lack of cultural capability in the criminal justice system (Aboriginal Legal Service (NSW/ACT) 2017; ALRC 2017; Cunningham and Paradies 2013). For example, there is evidence of racialised policing practices such that Aboriginal and Torres Strait Islander people are more likely to be arrested, less likely to be cautioned and more likely to be referred to court than non‑Indigenous people (ALRC 2017, chapter 14; Cunneen 2020; SCRGSP 2020b). After controlling for other factors that affect sentencing, Thorburn and Weatherburn (2018) estimated that Indigenous status increases the likelihood of receiving a prison sentence by about 1.2 percentage points.

Nationally, the rate of imprisonment for Aboriginal and Torres Strait Islander people is 13.3 times the non‑Indigenous imprisonment rate, even adjusting for the relative youth of the Aboriginal and Torres Strait Islander population (table 2.1).

Table 2.1 – Aboriginal and Torres Strait Islander people have very high imprisonment rates

Age standardised^a imprisonment rate per 100 000 adult population,^b 2020

	NSW	Vic	Qld	SA	WA	Tas	NT	ACT	Aus
Aboriginal and Torres Strait Islander people	1 778	1 753	1 897	2 422	3 464	727	2 270	1 891	2 081
Non‑Indigenous people	160	125	157	188	217	154	198	100	156
Ratioc	11.1	14.0	12.1	12.9	16.0	4.7	11.5	18.9	13.3

a. Age standardised imprisonment rates adjust crude rates for age differences in underlying populations. b. Population aged 18 years and over. c. Ratio of the imprisonment rate for Aboriginal and Torres Strait Islander people to the imprisonment rate for non‑Indigenous people.

Source: ABS (Prisoners in Australia, 2020).

Moreover, the imprisonment rate for Aboriginal and Torres Strait Islander people has increased by 35 per cent since 2006, compared with an increase of 14 per cent for the non‑Indigenous population. However, the national trend masks significant variation across jurisdictions and within the Aboriginal and Torres Strait Islander population. The growth of imprisonment rates for Aboriginal and Torres Strait Islander people was fastest in the ACT (149 per cent growth between 2006 and 2020), Victoria (126 per cent), Tasmania (87 per cent) and South Australia (61 per cent) (ABS 2020b).

Aboriginal and Torres Strait Islander women have experienced the fastest growth in imprisonment rates. Aboriginal and Torres Strait Islander women’s imprisonment rates have increased by 115 per cent between 2000 and 2020 compared with an increase of 65 per cent for Aboriginal and Torres Strait Islander men. (ABS 2020b; SCRGSP 2020b). The underlying structural, relational and personal circumstances of Aboriginal and Torres Strait Islander women put them at greater risk of imprisonment (SCRGSP 2020b).

While Aboriginal and Torres Strait Islander overrepresentation in prisons is a central issue facing Australia’s criminal justice system, it is not the only source of high imprisonment rates. Western Australia, for example, has a non‑Indigenous imprisonment rate higher than the overall national average (Tubex, Blagg and Tulich 2018, p. 217). Growth in imprisonment of non‑Indigenous people is also clearly contributing to overall imprisonment growth across all jurisdictions, perhaps with the exception of the Northern Territory (figure 2.8).

Figure 2.8 – Growing numbers of Aboriginal and Torres Strait Islander and non‑Indigenous prisoners

Number of prisoners by jurisdiction and Indigenous status, 2002 to 2020

Source: ABS (Prisoners in Australia 2012 and 2020).

	Finding 2.3
While Australia’s imprisonment rate was just above the OECD average in 2018, between 2003 and 2018 its growth was third fastest among OECD countries. Imprisonment rates have increased steadily over the past two decades in all Australian jurisdictions from different base levels. This growth has been more pronounced for women and Aboriginal and Torres Strait Islander people.

2.3        Offences and sentences

In parallel with the increasing imprisonment rate, the composition of offences that people in prison have been charged with as well as the patterns of sentencing have evolved over the past decade.

This section uses data on the most serious offence that prisoners are charged with during a particular year (box 2.3). As such, the section does not present a complete picture of crime as the data do not include non‑reported crime or reported crime that does not involve time in prison. The data also do not capture the instances of multiple offences being committed by an individual prisoner within a year. For these reasons, caution is needed in interpreting the results.

More than half of prisoners are charged with violent crimes

In 2020, more than half (58 per cent) of the people in prison (either on remand or sentenced) were charged with violent crimes (box 2.3) (ABS 2020b). Nonetheless, a notable proportion of prisoners (15 per cent or 4085 prisoners) were charged with offences which have not caused harm but exposed others to risk of low- to- medium direct or indirect harm, or which cause harm to self; such as drug use offences.[8] Prisoners may be charged with multiple offences per year which may increase the probability of imprisonment even though individual offences were relatively minor.

In 2020, the most common offences prisoners were charged with were acts intended to cause injury (including assault) (23 per cent), followed by illicit drug offences (15 per cent), and sexual assault and related offences (14 per cent) (figure 2.9). There was an increase in the proportion of the prison population charged with one of these three offences over the period 2010–20 (figure 2.9).

At the same time, there has been a decline in the proportion of prisoners charged with crimes such as theft, fraud and traffic regulatory offences. Overall, there was a 6 per cent increase in the proportion of prisoners charged with violent crimes as their most serious offence between 2010 and 2020 and an 8 per cent decrease in non‑violent charges over the same period. This shift in offending composition does not appear to have driven imprisonment growth (appendix B).

These changes in the composition of offending broadly reflect trends in reported crime rates (chapter 1). Weatherburn and Rahman (2021) outline some likely explanations for falling property crime rates, including better vehicle security, falling demand for stolen goods, the rise of the cashless, population ageing, and changes to policing and imprisonment policy.

Due to the data limitations noted above, the observed trends in non‑violent offences could reflect a decline in these offences being reported as the most serious offence, rather than a decline in the overall incidence of these offences. On the other hand, the increase in violent offences — in particular sexual assault and related offences — could reflect, a greater willingness on the part of victims to come forward and report these crimes.

 

Box 2.3 – Classification of offences
Data on offences which prisoners are charged with or convicted of are collected based on the most serious offence that an individual is charged with during that year. This means that an individual who has committed multiple crimes is recorded with their most serious crime (or alleged crime). This is important to note before interpreting some of the figures in this section. Claims that growth in serious offences outweighs that of less serious ones — particularly crimes which often occur in conjunction with other crimes — should be taken with caution. The National Offence Index (NOI) orders offence divisions in the Australian and New Zealand Standard Offence Classification (ANZSOC) by their level of severity and determines what is the most serious offence. ANZSOC is used by the Australian Bureau of Statistics (ABS) in its justice statistics including the yearly prisoner statistics, Prisoners in Australia. The main purpose of the ANZSOC is to create a standardised framework and characterisation of criminal activity. This helps bridge differences in definitions of offences across Australian states and territories allowing for more comparability of data. There are 16 divisions in the ANZSOC classification. These are not necessarily ordered by their NOI level of severity, but rather by whether or not offences were violent, intentional, had a specific victim, involved property acquisition or compromised the safety of others. Overall, the divisions attempt to align with jurisdictional variation in legal definitions and codes in order to create a single, comparable classification. In this paper, divisions 01 to 06 have been designated as ‘violent’ crimes. These divisions involve offences committed against another person and include attempts and conspiracies but do not include acts committed against organisations, the state or the community. These also generally involve high harm or risk of harm to others. Source: ABS (2011).

Figure 2.9 – The composition of offences is evolving

Per cent of prisoners by offence type in 2010 and 2020

Source: ABS (Prisoners in Australia, 2020).

Custodial sentences do not always mean prison

Not all custodial sentences result in imprisonment. Custody in a correctional institution or imprisonment accounted for 68 per cent of custodial sentences handed down in 2019‑20 (figure 2.10, panel a). Non‑prison custodial sentences include custody in the community and suspended sentences (ABS 2020a). Suspended sentences have been phased out in several jurisdictions, including Victoria and New South Wales (Freiberg 2019).

When given more sentencing options, judges have greater discretion to hand down sentences that better suit the offence and the characteristics and needs of the offender, while still providing an appropriate level of punishment. The relative costs of community‑based custody and imprisonment are explored in chapter 3.

Figure 2.10 – Sentence type and length

Source: ABS (Criminal Courts, Australia, 2020).

Sentence lengths are mostly short but increasing over time

The vast majority of people sentenced to prison will re‑join the wider community at some point. Over a third (35 per cent) of convicted prisoners received a short prison sentence (defined in this paper as less than six months) in 2019‑20 (ABS 2020a) (figure 2.10, panel b). There is variation across jurisdictions with some having a much higher proportion of prisoners with short sentences (figure 2.10, panels b and c).

Nevertheless, sentence lengths appear to be increasing over time. The median sentence length has increased by 46 per cent since 2011‑12, from six months in 2011‑12 to 8.8 months of imprisonment in 2019‑20 (ABS 2020a). The mean sentence length has increased by 20 per cent since 2011‑12, from 13 months in 2011‑12 to 15.6 months in 2019‑20 (ABS 2020a).

This trend could reflect several factors. The shift towards more violent crimes could account for some of the increase in sentence length, assuming that more violent offences receive longer prison sentences on average. Alternatively, people coming through the prison system could be receiving longer sentences because they are being convicted of multiple offences or are repeat offenders — trends that would not be captured by the data on offences as currently reported. Sentence length could also be increasing due to policy changes such as the imposition of minimum and maximum sentence lengths. Sentence length has contributed to the overall growth in imprisonment (box 2.1; appendix B).

In 2020 more Aboriginal and Torres Strait Islander prisoners received short sentences relative to non‑Indigenous prisoners (figure 2.10, panel d). National Aboriginal and Torres Strait Islander Legal Service (NATSILS 2017, p. 14) noted some specific concerns regarding shorter sentences for Aboriginal and Torres Strait Islander people:

… short sentences are particularly problematic, as they disconnect individuals from their communities and support networks, and often mean that an important contributor is removed from the community, thereby harming the entire community. Further, prison can mirror past trauma and abuse (and inter‑generational trauma), and reinforce themes of powerlessness, lack of control, and vulnerability.

More generally, the majority of prisoners (70 per cent) serving short sentences are in prison for non‑violent offences, such as theft and drug offences. These offences often have their root causes in poverty, drug addiction, homelessness and poor mental health. Short prison sentences for these types of offences disrupt family ties, housing, employment and treatment programs but are likely to offer little in terms of deterrence and rehabilitation.

 

Finding 2.4

There has been a shift towards prisoners charged with violent offences as their most serious offence within a 12‑month period. More than half of people in prison have been charged with crimes which are considered violent (such as acts intended to cause injury and sexual assault). Nonetheless, 15 per cent of prisoners are charged with offences which have not caused harm but exposed others to risk of low- to medium-level direct or indirect harm, or which cause harm to self (such as drug use offences). While average sentence lengths appear to be increasing over time, over a third of sentenced prisoners receive short sentences of less than six months, mostly for non‑violent offences.

2.4        Remand

A third of Australia’s prison population is on remand; awaiting trial or sentencing. The share of the remand population has nearly doubled in the past two decades (figure 2.11). While on remand, prisoners awaiting their trial are in a state of flux. The uncertainty associated with this for prisoners, victims and corrective services limits access to available services such as education and training and rehabilitation programmes (ALRC 2017, pp. 287–89). Remanding people in custody means that governments face the fiscal costs of imprisonment itself (chapter 3). Additionally, remandees face indirect costs similar to those associated with short sentences but remand can have a particularly adverse impact on mental health. A study looking at New South Wales and South Australia found that 50 per cent of prisoners who committed suicide were on remand at the time (Willis et al. 2016).

Figure 2.11 – The proportion of prisoners on remand has increased

Per cent of prison population who are unsentenced

Source: ABS (Prisoners in Australia, 2020).

Australia ranks relatively high among OECD countries on two commonly‑used measures of remand (figure 2.12). The average proportion of remandees in OECD countries is 26 per cent of the prison population, six percentage points lower than Australia’s (32 per cent). Moreover, in 2020 Australia had 57 people held on remand per 100 000 in the general population compared to an OECD average of 37 per 100 000.

A high rate of remand is consistent with a high proportion of violent crimes, for which bail is more likely to be denied. However, the nature of a crime is not the only consideration in granting bail. Factors such as the likelihood of attending a hearing, prior offending and characteristics of the accused are also taken into consideration (Bartels et al. 2018; Travers et al. 2020b). By ensuring that defendants attend trial, that witnesses are protected, and that further offences are not committed, remand is an important element of the legal and policy framework surrounding community safety.

People on remand are most likely to be charged with acts intended to cause injury (34 per cent of remandees) or illicit drug offences (16 per cent) (ABS 2020b). Both of these offences have seen large increases over the past two decades (figure 2.9). Of people on remand in 2020, 9.5 per cent were charged with offences which have not caused harm but exposed others to risk of low- to medium-level direct or indirect harm, or which cause harm to self; such as drug use offences.

Figure 2.12 – Australia’s rates of remand are above the OECD average

Remandees as a proportion of the population and prison population, 2016

Source: Institute for Crime and Justice Policy Research (World Prison Brief, 2021).

Consistent with the overrepresentation of Aboriginal and Torres Strait Islander people in the total prison population, Aboriginal and Torres Strait Islander people are increasingly overrepresented in the remand population, accounting for 31 per cent of remandees in 2020, up from 23 per cent in 2006 (ABS 2020b).

While there is variation across jurisdictions, a larger proportion of Aboriginal and Torres Strait Islander prisoners are on remand than non-Indigenous prisoners in all jurisdictions except for the Northern Territory. In the Northern Territory, 29 per cent of Aboriginal and Torres Strait Islander prisoners were on remand compared to 31 per cent of the non‑Indigenous prisoners in 2020 (ABS 2020b). The largest gaps in the proportion of Aboriginal and Torres Strait Islander prisoners versus non‑Indigenous prisoners on remand were reported in South Australia (53 per cent compared with 38 per cent), and Victoria (43 per cent compared with 34 per cent). New South Wales (34 per cent compared with 32 per cent) and Tasmania (32 per cent compared with 29 per cent) reported the smallest gaps in remand rates (ABS 2020b)

The average time spent on remand increased slightly from 4.5 months to 5.8 months between 2001 and 2020. In 2020, the longest average times on remand were experienced in Queensland (6.5 months), Western Australia (6.3 months) and New South Wales (6.1 months). Victoria (5.7 months) was near the national average, while the Northern Territory (3.3 months), the ACT (3.7 months) and Tasmania (3.8 months) had the lowest average times on remand (ABS 2021a).

There is some evidence to suggest that jurisdictions appear to be taking longer to process individual cases. The length of time between case initialisation and finalisation has increased, which may affect the length of time that individuals spend on remand before their case is heard in court. This is especially true in higher courts for which case duration has increased by two months (appendix B).

The growth in the remand population is striking and the literature suggests that changes to bail legislation have played a role in increasing the remand population (Bartels et al. 2018; Brown 2013; Fitzgerald 2000; King, Bamford and Sarre 2005). That said, other factors such as increases in bail breaches and increases in the length of court proceedings can also influence the remand population (Weatherburn and Fitzgerald 2015).

However, there is also some evidence to suggest that remand is increasingly common as a judicial response. A recent study of the use of pre‑trial detention across ten international jurisdictions (including New South Wales) suggested an over‑reliance on remand had arisen both from systemic issues, such as under‑resourced prosecution services, inadequate legal aid funding and a lack of alternatives, as well as from judicial culture and practice (Heard and Fair 2019).

Remand and imprisonment growth

Notwithstanding the clear growth in remand and the effects of remand on prisoners, corrective services and victims, the extent to which growing remand has contributed to overall growth in the prison population is difficult to identify (appendix B).

If all remandees eventually receive prison sentences that are at least as long as the time spent on remand then the growth in remand is simply a shift in the timing of sentencing with no net impact on total prisoner numbers. However, if instead either:

•     some remandees are found not guilty; or

•     some remandees are found guilty but receive sentences that are shorter than the time spent on remand,

•     then growth in remand contributes positively to an overall increase in prisoner numbers.

 While the vast majority (approximately 91%) of remandees are found guilty, a small number of remandees are either found not guilty or have their case dismissed. This has likely resulted in a small increase in prisoner numbers. For example, in New South Wales in 2019, 8.7 per cent of remandees were either found not guilty (2.4 per cent) or had their case dismissed (6.3 per cent). The proportion found not guilty was higher for Aboriginal and Torres Strait Islander people on remand. Aboriginal and Torres Strait Islander male remandees were 1.3 times more likely to be found not guilty than non‑Indigenous male remandees, while Aboriginal and Torres Strait Islander female remandees were 3.8 times more likely to be found not guilty than non‑Indigenous female remandees (Commission calculations based on unpublished data from New South Wales Bureau of Crime Statistics and Research (BOCSAR)). As these alleged offenders received no sentence their time on remand is additional to prison numbers.

Furthermore, among remandees who received sentences, many do not receive custodial sentences or are discharged with ‘time served’. For example, in New South Wales, an average of 25 per cent of guilty verdicts between 2011 and 2019 did not result in custodial sentencing (Commission calculations based on unpublished data from BOCSAR). In South Australia over the period 2015‑16 to 2019‑20, on average, 60 per cent of prisoners that were discharged had only been on remand.[9] Of those, 56 per cent had been released on bail and 29 per cent were given either time served or had their charges withdrawn (South Australian Department for Correctional Services, pers. comm., 25 August 2021). This raises the possibility that many remandees had periods in prison that exceeded the sentence they would have received had court processes been quicker.

The Commission’s analysis into the relative importance of the drivers of imprisonment suggests that remand was only a relatively important driver of prison population growth in New South Wales. The growth in remand in other jurisdictions was comparatively less important than other factors (appendix B).

 

Finding 2.5

The proportion of prisoners on remand has nearly doubled since 2000 to account for a third of Australia’s prison population. The average time spent on remand has also increased from 4.5 months in 2001 to 5.8 months in 2020. Both statistics likely reflect a combination of systemic resourcing constraints, largely relating to courts, as well as a judicial response to wider contextual factors such as reduced judicial discretion over bail decisions. Remand creates uncertainty for prisoners, victims and corrective services. To the extent that there are barriers to accessing alternatives to remand, these need to be considered. While the contribution of remand to imprisonment numbers is difficult to identify precisely, growth in remand will contribute to growth in the prison population when some remandees are found not guilty or have their case withdrawn or dismissed. This is the situation in New South Wales where a notable proportion of remandees (about 9 per cent in 2019) were found not guilty or had their case withdrawn or dismissed.

2.5        Recidivism

Rehabilitation of offenders and their reintegration into society is one of the key objectives of imprisonment. Success in reducing recidivism by breaking patterns of reoffending contributes positively to community safety and reduces the costs of crime, including the costs borne by individuals, families and the community.

Recidivism can be measured in different ways (box 2.4). Both measures commonly used in Australia show that the rate of recidivism has grown over the past decade.

•     The proportion of prisoners with a prior sentence increased from 55 per cent in 2010 to 59 per cent in 2020.

•     The proportion of prisoners who returned to prison within two years of release increased from just under 40 per cent in 2011‑12 to 46 per cent in 2019‑20.

A higher rate of return to prison (recidivism) leads to a larger prison population. Recidivism rates are determined by many factors such as the quality of rehabilitation and post‑prison support, the higher likelihood of prison sentences for repeat offending, and the degree to which a prison sentence leads a person to commit subsequent crime. In New South Wales, evidence shows that reoffending increases the likelihood of a prison sentence, and thereby places upward pressure on prisoner numbers (Weatherburn 2020). While comparable national data are not available, there is still indicative evidence that reoffending patterns may be playing a role Australia‑wide. The number of people in prison who had a prior spell of imprisonment grew by about 54 per cent, whereas the number of people with no prior spell only grew by about 35 per cent (ABS 2020b).

 

Box 2.4 – Measures of recidivism in Australia

There are several ways that recidivism is measured in Australia. Although the concept is simple, comparing statistics on recidivism is made difficult by differences in the way it is measured — including the period over which it is measured, whether it is determined by reoffending or reimprisonment, whether it includes community orders or their equivalents and the definition of the group being assessed (such as all offenders or a sub group). The level of measured recidivism is also influenced by overall approaches to imprisonment more generally compared to other remedies, and the likelihood of being apprehended and convicted. The Australian Bureau of Statistics (ABS) provides data on prisoners held in Australian jails on 30 June in each reference year (ABS 2020b). As part of this reporting, data are provided on the number of prisoners who have been imprisoned before. For example, in 2020, 24 413 prisoners of a total prison population of 41 060 had been imprisoned before. This measure includes all prior convictions for an prisoner, no matter when they occurred. The Report on Government Services (SCRGSP 2020a) provided three other measures of the rate of reoffending. •     The proportion of people aged 10 years or over who were proceeded against more than once by police during the year. •     The proportion of adults released from prison after serving a sentence who returned to corrective services (either prison or community corrections) with a new correctional sanction within two years. •     The proportion of adults discharged from community corrections orders who returned to corrective services (either prison or community corrections) with a new correctional sanction within two years. The first of these measures provides useful information about the workload on police and the court system from short term reoffending. The second measures recidivism among released prisoners. The third deals with recidivism for those on community corrections orders rather than prison sentences.

While the different ways of measuring recidivism make international comparisons challenging, studies that have attempted to compare like‑with‑like suggest that Australia is at the higher end of the spectrum for both reconviction and reimprisonment of released prisoners (Yukhnenko, Srihdar and Fazel 2020). The range reported for reconviction internationally was 20 to 63 per cent, with Australia at 53 per cent. For reimprisonment the range internationally was 14 to 45 per cent, with Australia at 45 per cent (table 2.2).[10] Recidivism rates are high nationally but there are some differences across jurisdictions. Recidivism rates are highest in the ACT (78 per cent), the Northern Territory (74 per cent), and Queensland (69 per cent), compared with the national rate of 59 per cent (ABS 2020b).

Table 2.2 – Australia has relatively high recidivism rates

Illustrative selection of countries in 2020, per cent

	Rate of reconviction two years after release	Rate of reimprisonment two years after release
Norway	20
Israel		28
Austria	26
Canada (Ontario)	35
Finland	36
USA (Oregon)	36	14
USA (23 States)		32
France	40
Netherlands	46
Australia	53	45
Canada (Quebec)	55	43
USA (federal)		60
New Zealand	61	43
Sweden	61
Denmark	63

Source: Yukhnenko, Srihdar and Fazel (2020).

Different offences are associated with different rates of recidivism. For example, property offences are often recurring whereas violent offences, such as homicide and sexual assault, often have low levels of reoffending (Payne 2007).

Overall, increasing recidivism reflects an increased likelihood of reoffending in most offence categories. At the same time, the changing composition of offences in the prison population has put some downward pressure on the recidivism rate. Fewer people are being imprisoned for offences which historically have had high rates of reoffending (for example, traffic offences, burglary, theft and robbery). Further, offences for which recidivism has been historically less likely (for example, acts intended to cause injury, drug offences, weapons offences and property damage) make up increasing shares of the prison population (Commission analysis based on ABS (2020b) data).

Offending is chronic for many prisoners. While 23 per cent of prison entrants have been in adult detention once or twice before, 32 per cent of prison entrants had previously been in prison five or more times (figure 2.13, panel a). High‑risk (rapid) recidivism is associated with frequent and short sentences (Fitzgerald, Cherney and Heybroek 2016).

Recidivism accounts for a significant proportion of the fiscal costs of imprisonment (chapter 3). Moreover, imprisonment for repeat offending can entrench pathways of disadvantage by exacerbating the risk factors that lead to offending (Centre for Policy Development 2020). For example, 62 per cent of prison dischargees had no paid work lined up to start within two weeks of leaving prison (AIHW 2019a). About 36 per cent either did not know whether they had a valid Medicare card or did not have one on the first day of release (AIHW 2019a). A similarly large proportion (44 per cent) expected to stay in short term or emergency accommodation (AIHW 2019a). Throughcare and reintegration efforts have been recognised as important in reducing reoffending (Tubex 2021).

Figure 2.13 – A more granular picture of repeat offending^a

2018

(a) Prison entrants by number of times previously in adult detention, per cent

(b) Per cent of prisoners with a prior record by Indigenous status

a. AIHW includes responses for all jurisdictions except for New South Wales.

Source: AIHW (2019a); Justice Health and Forensic Mental Health Network (2015).

Recidivism rates are higher for Aboriginal and Torres Strait Islander prisoners than for non‑Indigenous prisoners (figure 2.13, panel b). This may be explained in part by Aboriginal and Torres Strait Islander prisoners entering the criminal justice system at a younger age, on average, and having greater exposure to risk factors (before, during and after prison) that increase the likelihood of reoffending relative to non‑Indigenous prisoners (SCRGSP 2020b, chapter 11). The high rates of imprisonment, recidivism and shorter sentence length of Aboriginal and Torres Strait Islander people further suggest that Aboriginal and Torres Strait Islander prisoners have, on average, shorter but more frequent prison stays.

 

Finding 2.6

Australia has a high level of recidivism when compared internationally. Almost 60 per cent of prisoners have a prior prison sentence, and this rate is even higher for Aboriginal and Torres Strait Islander prisoners. High recidivism rates, combined with a large proportion of prisoners on remand or serving short sentences, suggest that many prisoners cycle in and out of prison, following a ‘churn’ pathway through the criminal justice system. This is likely to be more common among Aboriginal and Torres Strait Islander prisoners.

2.6        Putting it all together

Many of the trends described above underscore the challenges that corrective services face in striving to meet the broad objectives of the criminal justice system. Further, increasing imprisonment rates, the overrepresentation of Aboriginal and Torres Strait Islander people combined with the high proportion of people in prison with complex needs and the high rates of churn and recidivism point to a cycle of incarceration that can be costly to address. While imprisonment growth is driven by different factors in each jurisdiction there is a common move towards more punitive policy approaches seen in increasing sentence lengths and a higher likelihood of receiving a prison sentence. In these settings, crime‑control policy ought to be asking the question of whether there are alternative approaches to prison that are more cost‑effective and yet deliver similar or better outcomes.

 

Finding 2.7

The fiscal implications of high and increasing imprisonment and recidivism rates, combined with the growing overrepresentation of Aboriginal and Torres Strait Islander people as well as people from disadvantaged backgrounds with complex needs, are concerning facts of the prison system. These trends highlight the potential gains from finding alternative approaches that are more cost‑effective without compromising the crime‑control and other benefits of the criminal justice system.

Key points
	Prison benefits the community by providing justice and punishment for crime. It is important that community attitudes to criminal behaviour are reflected in sentencing to meet community expectations of safety and maintain public confidence in the criminal justice system.
	Prison reduces crime by removing high-risk individuals from the community and by deterring some individuals from committing crime in the first place.
	The fiscal costs of prison are growing, both as a component of the overall criminal justice system and as proportions of most state and territory governments’ budgets. •      Nationally, in 2019-20, state and territory governments spent $5.2 billion on prisons, representing about 1.6 per cent of total government expenditure. •      Recidivism accounts for more than half of these costs.
	Costs per prisoner over time do not exhibit any clear trend within jurisdictions, though there are differences in levels across jurisdictions. •      Total cost per prisoner per day ranged between $294 and $559 in 2019-20. •      Many factors underlie these cost differences including staffing requirements and program delivery.
	Alternatives to prison can lower fiscal costs significantly. Community corrections orders tend to have less deterrence and incapacitation effects than prison, but they can achieve better rehabilitation outcomes, particularly where the risks of harm to the community are low. •      A 1 per cent shift in the number of people from prison to community corrections would save taxpayers approximately $45 million per year nationwide.
	In addition to fiscal costs, prison can have indirect costs in terms of lost employment and productivity. Even individuals who were employed before imprisonment may face additional hurdles when re-entering the job market. Prison employment and training programs can improve post-release outcomes.
	In some cases, imprisonment of a parent or carer can provide a degree of protection to children and other family members. However, it can also result in enduring adverse effects to families and future generations.
	Even though the experience of being in prison can increase the likelihood of reoffending, it is also an opportunity to rehabilitate individuals. The prison environment itself, programs undertaken while in prison, and access to basic needs such as housing and health care are important influences that can work to reduce reoffending.

The rule of law is fundamental to a well-functioning society. It underpins governance, social cohesion, and the market economy — and in doing so, sustains Australia’s quality of life. It includes the expectation of a safe, secure, and just environment afforded by an effective criminal justice system that allows individuals to pursue their daily lives free of concern for their wellbeing.

Notwithstanding its sociological and economic drivers, crime is often seen by the community as a failure of government to deliver on one of its core responsibilities. While reducing crime to zero is a goal beyond the reach of any government, systemic criminal activity or high-profile instances of harm often lead to calls for a tougher stance on crime, and more enforcement and punishment.

Imprisoning those found guilty of crimes is one way to help meet community expectations surrounding safety and security. In addition to its role in punishing individuals for committing harmful acts, prison works to reduce crime through deterring would-be criminals, incapacitating habitual offenders or individuals that present as a high risk to the community, and serving to rehabilitate individuals so that they are less likely to reoffend upon release.

But imprisonment also comes with costs, only some of which are easy to define and measure. The direct fiscal costs of imprisonment are relatively straightforward to measure. The costs of prison sentences in terms of individual prisoner outcomes, and the impact on their families and the community, are important but difficult to pin down precisely.

The decision to imprison an individual is a complex process. Imprisonment involves a trade-off between the benefits of maintaining community safety, delivering just and fair punishment, and ensuring community confidence in the criminal justice system (chapter 1). Each imprisonment sentence must also balance the purposes of punishment, deterrence, incapacitation, and rehabilitation effects, as well as taking into account the fiscal and social costs of prison to individuals, families and the broader community.

In practice, prisons cater to a significant degree of heterogeneity in both the types of crime and the individuals convicted of offences. In the Australian context, trends in remand, imprisonment, and recidivism, the overrepresentation of Aboriginal and Torres Strait Islander people and people from disadvantaged backgrounds, and the prevalence of short sentences are all part of the risk management and decision‑making process (chapter 2). To the extent that similar or better outcomes can be achieved at lower cost through alternative approaches, it is important for criminal justice policy to give these alternatives due consideration. Chapter 4 explores a number of specific alternatives to prison through a case study approach.

This chapter looks at imprisonment through an economic lens from a community-wide perspective. It opens by outlining why we have prisons (section 3.1), and then looks at the costs of imprisonment, including fiscal costs (section 3.2) and indirect costs (section 3.3).

3.1        The role of prison

Prison has two core functions. The primary function of a prison is to carry out the custodial orders imposed by courts on convicted criminals. However, prisons also hold some charged individuals in remand for a (sometimes significant) period before they can appear in court to have their case heard. People on remand represent a growing segment of the total prisoner population (section 2.3). An alleged offender can be remanded for a number of reasons, including the seriousness of the offence, the risk of reoffending, to ensure the defendant will appear in court, and to assist in the care and protection of the defendant and victim (King, Bamford and Sarre 2005; South Australian Department of Correctional Services 2020).

A sentence of imprisonment is at the severe end of the scale of possible penalties that are available to courts and is generally treated as the sentence of last resort in Australian jurisdictions. Other legislated penalties typically include fines, probations, and community service orders. The majority of sentences each year fall into the first category of fines.

In deciding to impose a sentence of imprisonment over alternative sanctions, judges and magistrates consider whether the purposes of the penalty are appropriate for the crime. Across Australian jurisdictions, the various legislative sentencing Acts set out the purposes of a prison sentence to include punishment, as well as to reduce crime through deterrence, incapacitation, and rehabilitation. There are trade-offs between each of these components (chapter 1). Sentencing decisions consider the degree to which each purpose contributes to the overall sanction so that the interpretation and application of the law strikes the right balance for offences.[11]

Punishment

A key purpose of prison is to ensure that the offender is adequately punished for the offence committed (chapter 1). Punishment in this context is based on the principle that justice is served when an offender gets a socially appropriate sanction. It follows that a prison sentence is one means by which the criminal justice system aims to achieve a measure of retribution on behalf of victims and the community (Materni 2013, p. 226).

Community perception of the effectiveness of sentencing policy and sentencing decisions in delivering just punishment is an important consideration for the criminal justice system. Public confidence in the system, and therefore its effective operation, depends on whether community attitudes to criminal behaviour are adequately reflected in the sentencing decisions made by magistrates and judges (Bartels, Fitzgerald and Freiberg 2018; Roth 2014b).

Notwithstanding the community’s desire that crime be punished, it is difficult to place a monetary measure on the value of justice or retribution from punishment for specific instances of offence. Part of the difficulty lies in the heterogeneity of offence types, individual offender and victim characteristics, and other extenuating circumstances. More importantly, magistrates and judges weigh the retributive value of punishment alongside consideration of the other purposes of prison, such as deterrence, incapacitation and rehabilitation (Materni 2013, p. 289).

Deterrence

The deterrence effect of prison reduces crime by discouraging would-be criminals from committing harmful acts through the threat of imprisonment (Chalfin and McCrary 2017, p. 6; Shavell 2015). The criminal justice system deters crime in several ways. For some people, conviction without a prison sentence can deter crime because convictions carry with them social opprobrium, suspicion, and lost job opportunities. For others, imprisonment has the additional feature of restricted freedom, while living in an unpleasant environment. There is evidence that the deterrence associated with conviction is actually higher than from incarceration (Bun et al. 2020), which may influence the type of desirable corrective action to a crime.

The threat of a sanction deters people from committing crimes in the first place (general deterrence), or the experience of a previous sanction might deter previous offenders from committing further crimes (specific deterrence). In theory, the level of deterrence from a prison sentence is a function of the probability of arrest or conviction conditional on arrest; and the type or length of sentence applied to a conviction. In practice, there are difficulties with making precise estimates of the deterrence effect of imprisonment (box 3.1).

 

Box 3.1 – Estimating the crime-reducing effect of imprisonment is difficult
Ideally, researchers would like to obtain an empirical estimate of the responsiveness (or elasticity) of crime reduction with respect to prison from the available data. That is, an estimate of ‘what percentage reduction in crime can be isolated and attributed to a percentage increase in sentences?’ Unfortunately, producing this estimate is complicated by the feedback effect of prison on crime rates, leading to an issue plaguing empirical research on criminal justice known as simultaneity bias. Simultaneity bias arises because to be sure that the estimate of crime reduction results purely from a sentencing policy change, all possible factors capable of influencing crime or prison sentences need to be held constant or controlled for. However, sentencing policy changes typically happen in response to some other change in the criminal justice environment, and the researcher is unable to control for all interactions. For example, if changes in sentencing policy come about because policy makers have responded to increases in crime, then the data may show both an increase in sentence length and an increase (or less of a reduction) in crime rates. This would lead to the conclusion that harsher sentencing policy increases crime. Researchers have to use sophisticated techniques to control for the feedback effects of sentencing policy on crime to account for simultaneity bias, though many studies have not been careful in this regard leading to biased estimates of the deterrence effect of prison. In addition to simultaneity bias, empirical research on criminal justice must be carefully designed to account for a number of other common problems that arise in crime data. These include: issues that bias estimates due to aggregating-up individual observations that may mask variability in the data;  measurement errors related to self-reporting of survey data; and dealing with the effects of omitted variable bias, where one or more relevant variables are not included in the analysis — usually because data on that variable are not available. Source: Bun et al. (2020); Chalfin and McCrary (2017).

These difficulties notwithstanding, a few themes stand out from the international literature seeking to estimate the effect of crime deterrence (Chalfin and McCrary 2017; Schnepel 2016).

•     The probability of arrest or conviction consistently provides a meaningful level of general deterrence, with a stronger effect for violent crime than for property crime.

•     There is evidence of a deterrence effect from ‘sentence enhancements’ for existing offenders, such as ‘three strikes’ laws, whereby habitual offenders receive progressively more severe sanctions, culminating in a prison sentence. On the other hand, there is limited evidence that simply lengthening the prison sentence for a given crime increases the deterrence effect, with the marginal effect of an extra year in prison generally found to be diminishing for longer sentences.

•     There is also some evidence that, after controlling for prisoner characteristics, imprisonment, harsher prison conditions and longer sentences may increase the likelihood or severity of recidivism.

Recent Australian-based studies have produced findings in line with these patterns. Statistical research using panel data from local government areas in New South Wales found statistically significant short‑ and long-run effects on rates of property and violent crime from both the arrest and imprisonment per arrest rate, but not from the average length of sentence (Wan et al. 2012).[12] A similar approach found only a small effect from the imprisonment per conviction rate and none from the average sentence length (Bun et al. 2020). Another study looking at specific deterrence from prison sentences also found no evidence that prison deters offenders convicted of burglary or non-aggravated assault after employing matching and statistical controls for the issues raised in box 3.1 (Weatherburn 2010). That study — which compared matched burglary and non-aggravated assault offenders who received custodial and non-custodial sentences — also found that for non-aggravated assault, the custodial group was slightly more likely to reoffend within the next two years following their release.

Incapacitation

Incapacitation has the effect of taking offenders out of circulation and thus directly prevents crime as a result of imprisonment (Chalfin and McCrary 2017, p. 12; Shavell 2015). The underlying assumption is that those individuals, if not for being incarcerated, would be more likely to continue to offend than the general populace. Any measure of the incapacitation effect of prison will therefore depend on the ability to predict the counterfactual scenario — how much crime would have been committed by an incarcerated individual if not for being in prison (see box 3.2 for measures of the benefits of avoided crime).

The literature has consistently found that incapacitation through incarceration leads to significant reductions in crime. The estimated effect of incapacitation from changes in sentencing policy ranges widely between 2.8 to 15 crimes per year of incarceration depending on the type of crime and the cohort of offenders (Chalfin and McCrary 2017; Johnson and Raphael 2012; Levitt 1996; Owens 2009). More specifically, the incapacitation literature identifies two key themes:

•     collective versus selective incapacitation: there is a distinction between a collective incapacitation effect (where there is an increase in sentence severity for all offenders of a particular offence) and a selective incapacitation effect (where individual offenders are identified as posing a risk of reoffending and selected for a targeted increase in sentence severity based on that prediction) (Ritchie and Ritchie 2012, p. 2)

•     the distribution of offence rates matter: this distribution of offences is often highly skewed with a few offenders posing the greatest risk of reoffending. A policy of incarcerating the most frequent offenders could prevent a significant fraction of crimes through incapacitation. An older US-based study (Spelman 1994) captured this idea, finding that incarcerating 10 per cent of the most frequent offenders could prevent between 40 and 80 per cent of personal crimes and 35 to 65 per cent of property crimes.

Imprisonment has also been found to have an important incapacitation effect on prisoners in empirical studies within Australian contexts. Morgan (2018, pp. 19–25) estimated the benefit of incapacitation at more than $3000 per prisoner per year, derived by attributing the actual crimes committed by a cohort of offenders in community correction orders to a statistically-matched cohort who were imprisoned.[13] Weatherburn, Hua and Moffatt (2006, p. 6) showed that imprisonment prevents a large number of burglaries per year in New South Wales through incapacitation, although a significant additional increase in imprisonment of burglars would be required for a further 10 per cent reduction in burglaries.[14]

 

Box 3.2 – Measures of the benefits of prison
The benefits of prison are typically measured as the expected dollar value of harm prevented when an additional offender is sentenced to prison. This depends on three factors. •     The average dollar value of harm from specific offences. For example, estimates of harm vary from about $3 million for homicide, $65 000 for assault resulting in hospitalisation, $2500 for burglary and $7300 for vehicle theft (QPC 2019, chap. 7; Smith et al. 2014). However, the empirical basis for assessing avoided harm is often weak, with a range of caveats documented in the literature. •     The number of crimes reduced if an additional person is sentenced to prison. Estimates of these elasticities for different offences range between -0.7 and -0.1 (Chalfin and McCrary 2017, p. 26). These estimated elasticities are negative, meaning that higher levels of imprisonment tend to reduce crime.a This reduction depends on both the deterrence of would-be criminals, and on the incapacitation (and subsequent rehabilitation) of imprisoned offenders who might have otherwise committed further acts of crime. Disentangling the deterrence and incapacitation effects of imprisonment is challenging both at a conceptual and empirical level (Chalfin and McCrary 2017, p. 12). •     The value from punishing the additional offender. Estimates of the value that the community places on justice and retribution from imprisonment, as well as the public perception of safety, are intangible and/or difficult to measure, but are likely to be high for some types of crime. For example, the value of punishing an offender convicted of sexual violence is likely to be considerably higher than for a property theft. a. This range comes from a survey of the literature (Chalfin and McCrary 2017). In many of the studies surveyed, the statistical methodology is to individually regress violent and property crime on prisoner population plus other control variables, but each have different ways of controlling for simultaneity bias (box 3.1). Sentence length in those papers was not an explanatory variable.

Rehabilitation

Rehabilitation is a legislated purpose underpinning sentencing in all Australian jurisdictions (chapter 1). Whereas general deterrence and incapacitation effects seek to reduce crime, rehabilitation seeks to reduce the likelihood that an individual commits future crime. Its aim is to prevent a reversion to crime by altering an individual’s behaviour while they are in prison, and its success is measured by the rate of recidivism.

There are several characteristics of imprisonment that can influence the prospects for rehabilitation, both positively and negatively.

•     The day-to-day environment of the prison, the types of work which prisoners are able to engage with to develop skills and good practices, as well as the availability and quality of specific behavioural programs, training and education (QPC 2019a, p. 339).

•     The benefits associated with being in a stable social environment (for example, away from homelessness) or from removing destabilising influences (for example, substance misuse, and negative influences from peers) (Davis, Bahr and Ward 2013).

•     On the other hand, exposure to anti-social inmates and learning criminal behaviour may undermine rehabilitation efforts and increase the likelihood of recidivism (a criminogenic effect) (Abrams 2011; Mueller-Smith 2015).

The Queensland Productivity Commission (2019a) detailed the key elements of effective throughcare — the process of rehabilitation and reintegration aimed at helping inmates overcome a range of often complex needs and return to society. Throughcare was first introduced in South Australia in the late 1990s and versions of this system now operate in all states and territories (Baldry 2007).

Assessment of the risk profile and needs of incoming prisoners appears to be a widely-used approach to target rehabilitation efforts across most Australian jurisdictions. For example, Queensland Corrective Services use a Risk of Reoffending assessment based on a number of indicators including age, education level, employment status, number of current offences and number of convictions in the past ten years (Queensland Government 2018b). The measure is a strong predictor of reoffending and is used to help target rehabilitation programs.[15]

However, mixed objectives of the different parts of the prison system can easily undermine the objectives of throughcare (Baldry 2007). The goal of rehabilitation can be lost amongst the needs of prison security and punishment, particularly in facilities under pressure from high numbers of prisoners.

The experience of being in prison can also influence an individual’s behaviour upon release, and if rehabilitation is effective then it can reduce the likelihood of reoffending. The indirect costs associated with post-release behaviour are discussed in section 3.3.

The benefits from imprisonment are difficult to measure precisely. However, the techniques outlined in box 3.2 can provide an indication of the benefits from avoiding some types of crime. Combined with some estimates of cost (the subject of section 3.2), it is possible to generate some illustrative net benefits of prison by type of crime. Box 3.3 outlines a simple methodology that can be used to estimate some of the benefits and costs.

Box 3.3 – Cost and benefit measures of an additional prison sentence
Some of the costs and benefits of an additional prison sentence for specific offence types can be estimated by combining measures of the costs of crime with estimates of the crime-reducing effects of prison, average sentence lengths by crime type and prison costs (QPC 2019a, chap. 7). While subject to a range of caveats (discussed below), the estimates produced provide indicative values and provide some partial information about the order of magnitude of the value of prison, and a relative sense of the welfare change by offence type. The value of the savings from avoided crime is calculated by multiplying the cost per incident for each offence by the number of avoided crimes due to the prison sentence. The fiscal cost of prison for crime is produced by multiplying the average prison cost by the average sentence length (QPC 2019a, chap. 7). The table below outlines these measures for two crime types. Some indicative costs and benefits of avoided crimes in Australia   Per incident costa Number of crimes avoidedb Savings from avoided crimec Fiscal cost of prison sentenced Acts intended to cause injury $3 063 5.4 to 37.5 $16 540 to $114 863 $128 013 Robbery/extortion $4 299 0.9 to 6.2 $3 869 to $26 654 $315 497 a. Based on Smith et al.’s (2014) estimates and inflating to 2020 prices. Costs of specific crimes may vary widely from this estimated average. b. The number of crimes avoided is estimated as the number of offenders divided by the prison population multiplied by the assumed elasticity of avoided crime (-0.1 to -0.7). c. The savings from avoided crime is the number of crimes avoided multiplied by the cost of crime. d. The fiscal cost of a prison sentence is based on the daily prison cost in 2019-20 ($331.39) multiplied by the mean sentence length for that crime. Source: Smith et al. (2014); ABS (Prisoners in Australia, 2020; Recorded Crime – Offenders, 2019-20; Criminal Courts – Australia, 2019-20). Many of the parameters that are required to measure cost savings from crimes prevented have not been credibly estimated. Consequently, estimates are either incomplete or rely heavily on untested assumptions (Mueller-Smith 2015). Caveats to the calculation of costs and benefits Per incident cost — is based on a ‘bottom up’ approach which includes medical costs, lost output, and intangible losses (Chalfin 2016; Smith et al. 2014). Intangible losses (fear, pain, suffering, and lost qualify of life) are likely to underestimate emotional harms (QPC 2019a, chap. 7). Importantly, ‘top down’ approaches, like contingent valuation based on surveys, report considerably higher estimates of intangible losses (Chalfin 2016). Number of crimes avoided — is a function of the number of actual crimes per offence, the prison population for each offence type, and the elasticity of crime with respect to prison population. Each is subject to measurement issues which affect the accuracy and precision of the estimate. Fiscal cost of prison — average cost is used to compute fiscal costs of prison. Ideally, the marginal cost of a prison sentence would be used, which is the increase in total costs that arise because of the need to accommodate the additional prisoner. In the presence of fixed costs, marginal costs are generally lower than average costs, but when prisons are at capacity marginal costs may be higher than average costs (Henrichson and Galgano 2013). Source: Chalfin (2016); Henrichson and Galgano (2013); Mueller-Smith (2015); QPC (2019a).

3.2        Fiscal costs of prison

Criminal justice system spending is increasing

Spending by Australian governments on the criminal justice system, including police, courts, and corrective services were about $20 billion in 2019-20. Outlays have increased since 2012-13 by about 30 per cent in real terms (figure 3.1). Across all jurisdictions, real expenditure on corrective services grew by an average annual rate of 5.1 per cent between 2012-13 to 2019-20, matched by growth in police and courts at 5.1 and 5.4 per cent respectively (Commission estimates based on Steering Committee for the Review of Government Service Provision’s (SCRGSP 2020a) Report on Government Services data).

Figure 3.1 – Corrective services is part of an increasing criminal justice system spend

Expenditure, $ billions, 2012-13 to 2019-20, 2019-20 dollars^a

a. Expenditure includes operating expenditure and capital costs, less operating revenue (for example, revenue from prison industries). Excludes payroll tax and prisoner health and transport/escort costs where able to be disaggregated by jurisdictions, and expenditure on youth justice services. Capital costs include user cost of capital (calculated as 8 per cent of the value of government owned assets), land, other assets, debt servicing fees, and depreciation.

Source: SCRGSP (2021a) (drawn from 2013 to 2021).

Expenditure on corrective services is about 30 per cent of the total criminal justice system cost. These services include the management of offenders and prisoners through the provision of both custodial and non-custodial services. This includes the provision of safe, secure, and humane custodial environments, management of community corrections orders, and delivery of a range of programs including the diagnosis and treatment of the physical and mental health of prisoners.[16]

The cost of prison and community corrections services have both increased …

The increase in real spending on corrective services — of 40 per cent over the seven years to 2019-20 (figure 3.2) — appears to correspond to increased prisoner numbers. Real spending on prison services grew by an average annual rate of 5.1 per cent, in line with prisoner number growth at about 5.3 per cent over the same period. On the other hand, community corrections expenditure grew by 5.4 per cent, slower than the growth of people in community-based corrections at 6.2 per cent (Commission estimates based on SCRGSP (2021a)).

While spending on both prisons and community corrections have increased since 2012-13, the proportion of the corrective service spending is predominantly on prisons, and has consistently comprised 87 to 88 per cent of total corrective service spending (Commission estimates based on SCRGSP (2021a)). Expenditure on the prison services component of corrective services was about $5.2 billion in 2019-20.

Figure 3.2 – Spending on corrective services has increased

Expenditure, $ billions, 2012-13 to 2019-20, 2019-20 dollars^a

a. Expenditure includes operating expenditure and capital costs, less operating revenue (for example, revenue from prison industries). Excludes payroll tax and prisoner health and transport/escort costs where able to be disaggregated by jurisdictions, and expenditure on youth justice services. Capital costs include user cost of capital (calculated as 8 per cent of the value of government owned assets), land, other assets, debt servicing fees, and depreciation.

Source: SCRGSP (2021a) (drawn from 2013 to 2021).

The SCRGSP’s Report on Government Services data on prison expenditure do not include some expenditure items. Expenditure on corrective services-related transport and prison escort services, and health services by jurisdictions are reported separately from the total corrective services expenditures. This is done to improve the comparability of data across jurisdictions (SCRGSP 2021a). However, both components represent large items in some cases; in New South Wales, Victoria, Tasmania and the Northern Territory corrective services-related health spending are about 10 per cent of the aggregate prison spend (figure 3.3).

Figure 3.3 – Health spending is up to 10 per cent of total prison spending

Health services, Transport & prison escort services, per cent of total expenditure, 2019-20^a,b,c

a. These items are subject to significant variation in whether, and the extent to which, they are included within the corrective services budget. b. Transport and escort services spending is not available for Tasmania and Northern Territory; health services spending is not available for ACT. Some jurisdictions are unable to disaggregate costs from operating cost. c. Total expenditure includes operating and capital expenditure plus health services and transport and prison escort services.

Source: SCRGSP (2021a), table 8A.1.

… and the share of prison costs in budgets has increased in several jurisdictions

In 2019-20, prison costs as a share of state and territory governments’ budgets were highest in Western Australia and the Northern Territory (table 3.1).[17]

Moreover — with New South Wales as an exception — the fiscal costs of prison have generally increased as a proportion of state and territory budgets over the past decade (table 3.1). This change has been more pronounced in the Northern Territory (where prison costs as a proportion of that Territory’s budget has increased from 2.2 per cent to 3.2 per cent over that time).

These jurisdictional trends are also broadly reflected in differences in average annual growth in real prison costs, with Victoria (7.3 per cent), the Northern Territory (7.0 per cent) and South Australia (4.5 per cent) sitting above the national average annual growth rate of 4.5 per cent (table 3.1).

Table 3.1 – Fiscal cost of prison: a small but growing proportion of state and territory budgets

Expenditure on prison as a proportion of each state and territory budget

Jurisdiction	Prison costs  as a proportion of budget in 2010-11a	Prison costs as a proportion of budget in 2019-20	Growth in level of real prison costsb
	(%)	(%)	(%)
New South Wales	1.7	1.6	2.0
Victoria	1.2	1.6	7.3
Queensland	1.3	1.6	4.0
South Australia	1.2	1.6	4.5
Western Australia	2.2	2.5	3.9
Tasmania	1.4	1.4	2.0
Northern Territory	2.2	3.2	7.0
ACT	1.2	1.4	5.5
Total	1.5	1.7	4.2

a. Percentages expressed as ratio of total prison expenditure to Government Financial Services. b. Average annual growth in the real level of prison cost from 2011-12 to 2019-20.

Source: SCRGSP (2021a); ABS (Government Financial Statistics, Australia, December 2020).

The prison pathway is costly

Having been charged by police and remanded into custody, corrective services expenditure associated with an individual begins accumulating rapidly with a raft of items. This includes provision of accommodation, supervision by staff, as well as technical services such as risk assessment, program delivery, health services and transportation of offenders.[18]

In 2019-20 the total cost per prisoner per day ranged between $294 and $559 across Australian jurisdictions (table 3.2). In real terms, costs per prisoner have remained relatively constant within most jurisdictions, but there are differences in levels across jurisdictions (table 3.2 and figure 3.4).

Differences in costs may arise due to differences in:

•     the type, scope, and quality of programs available to prisoners and offenders

•     staffing levels and the composition of workforce required across different facilities

•     the number, type, and location of facilities being used.

The range of factors that determine the cost level in each jurisdiction makes it difficult to draw inferences about the relative efficiency of different prison systems.

Table 3.2 – Expenditure per prisoner varies widely^a,b

Expenditure per prisoner per day and per year, 2019-20

	NSW	Vic	Qld	SA	WA	Tas	NT	ACT
Net operating expenditure ($ per prisoner per day)	218	323	206	236	259	335	229	421
Capital costs ($ per prisoner per day)	76	97	98	76	64	53	110	139
Total expenditure ($ per prisoner per day)	294	421	304	313	322	387	338	559
Total expenditure ($’000 per prisoner per year	107	154	111	114	118	141	124	204

a. Net operating expenditure excludes operating revenue (for example, revenue from prison industries), payroll tax and prisoner health and transport/escort costs where able to be disaggregated by jurisdictions. b. Capital costs include user cost of capital (calculated as 8 per cent of the value of government owned assets), land, other assets, debt servicing fees, and depreciation.

Source: SCRGSP (2021a), table 8A.19.

Figure 3.4 – Daily prison costs vary across jurisdictions

Expenditure, $ per prisoner per day, 2019-20 dollars^a

a. Expenditure includes operating expenditure and capital costs, less operating revenue (for example, revenue from prison industries), but excludes payroll tax and prisoner health and transport/escort costs where able to be disaggregated by jurisdictions. Capital costs include user cost of capital (calculated as 8 per cent of the value of government owned assets), land, other assets, debt servicing fees, and depreciation.

Source: SCRGSP (2021a) (drawn from 2013 to 2021).

Daily average costs are not necessarily a good measure of performance across jurisdictions (SCRGSP 2021a). For example, a lower cost per prisoner over time may be due to an increase in prisoner population without a corresponding change in program expenditure. On the other hand, a higher cost per prisoner over time may be the result of increased program expenditure to reduce reoffending with no change in prisoner numbers.

Further, daily average costs do not capture any variation within the period covered. It is likely that the changing prisoner numbers led to a variety of challenges for each jurisdiction to overcome that would have implications for how budgets were spent. For example, the case study below highlights some of the major issues that arose in New South Wales due to rapid growth in prisoner population from 2012–2018 (box 3.4).

 

Box 3.4 – Managing growth in New South Wales prisoner population
Between 2012 and 2018, the New South Wales prison population grew from 9602 to 13 630 inmates, an increase of about 40 per cent, with further growth expected to occur. A 2019 audit of the New South Wales Corrective Services Division’s management of the growing prisoner population highlighted a range of issues that have broad applicability across jurisdictions. The report provided an overview of the New South Wales Government’s response in the short, medium, and long term. Short-run responses to growing prison population included: •     increasing temporary high-risk beds in cells and reopening and converting existing facilities •     designing and delivering a rapid-build prison with dormitory-style accommodation. Medium-run responses (undertaken in 2016) included: •     forming a dedicated unit inside New South Wales Department of Justice to liaise with the Correctional Services Division to integrate decision-making into government processes •     implementing a $3.8 billion budget measure — the Prison Bed Capacity Program — to expand bed numbers at existing prisons, expand existing facilities, and build a new dormitory-style prison. Long-run responses (planned for next 20 years) included: •     the New South Wales Department of Justice developing a long-term strategic framework titled ‘Corrective Services Infrastructure Strategy’ to guide planned actions and investment direction for prison infrastructure to meet projected inmate population over 20 years. Source: Audit Office of New South Wales (2019).

The New South Wales experience is also applicable to other jurisdictions that have seen similar trends in their prison populations. The need to accommodate a greater level of prisoners in institutions has seen increases in transportation between facilities, over-crowding, lower-quality delivery of business-as-usual programs affecting longer-term pathway inmates, a need for new programs to deal with shorter-term pathway inmates’ needs, as well as dealing with emerging issues created by housing more inmates. An important fiscal cost pressure to single out is staffing, as it accounts for up to 80 per cent of operating costs for prison budgets and represents the main short-term cost pressure in response to changing demands on prison services (AONSW 2019).

Community-based orders are a lower cost but imperfect substitute …

The closest alternative to a prison sentence is a community corrections sanction, which involves an offender continuing to live in the community under the supervision of community corrections officers. These may involve different levels of supervision or include an order to undertake community work or attend specific programs. Community corrections are an imperfect substitute for prison because they differ in terms of the purposes of punishment, deterrence and incapacitation, and rehabilitation. They have been found to be a more effective alternative to prison sentences for lower-order property crime rather than for violent crimes. For example, in the United Kingdom, a 1 per cent increase in the conviction rate for community sentences was found to reduce the crime rate by 0.2 per cent, compared to a 0.15 per cent reduction through prison sentences (Abramovaite et al. 2019, pp. 806–809).[19]

While supervision in the community is a form of punishment for those convicted of crimes, in general, community-based orders do not have the same degree of deprivation of liberty as prison, and may not meet the community’s expectation for retribution, particularly for serious crimes (Drake 2018). Community-based orders range from the more punitive intensive corrections orders, through to lighter-touch community service orders. Intensive corrections orders are typically used for offenders at significant risk of reoffending and include an intensive regime of community supervision and conditions, with the aim of rehabilitating the offender. Under a community service order, the court may direct the offender to perform community service work for a specified number of hours, but otherwise allow for freedom to move in the community (Gelb et al. 2019).[20] In addition to providing a non-custodial sentencing alternative, community corrections also serve as a post-custodial mechanism for reintegrating prisoners into the community (Gelb et al. 2019).

… and are less restrictive on each offenders’ capacity to reoffend …

Community-based orders do not have the same deterrence and incapacitation effects as prison in general, though as with punishment, there are differences in the types of order as well as the types of crime under consideration (Abramovaite et al. 2019; Nagin 2013). The degree of supervision as well as the number of conditions are key parameters of community corrections affecting both the degree of rehabilitation and the likelihood that people in community corrections complete the order without breach of conditions (Vera Institute of Justice 2013).

Approximately 70 per cent of community corrections orders are typically completed on an annual basis at the national level (SCRGSP 2021a). Community orders are considered incomplete if an offender is found in breach of the order requirements or further offences are committed. Up to one third of all breaches involve the offender committing at least one imprisonable offence while serving their community corrections order (Fisher and Stewart 2017; Gelb, Stobbs and Hogg 2019; Morgan 2018, pp. 26–27). But there is also evidence that stronger supervision of community corrections orders can reduce the rate of offending (Drake 2018; Morgan 2018, p. 21).

… but may perform better in terms of rehabilitation than prison

Community-based orders appear to perform better than prison in terms of rehabilitation, with evidence of relatively higher rates of reoffending for incarceration (Gelb, Fisher and Hudson 2013; Weatherburn 2010, pp. 6–9). More specifically, there is evidence that intensive corrections orders are more effective at reducing reoffending than short terms of imprisonment, especially among offenders classified as high risk of reoffending (Gelb, Stobbs and Hogg 2019). Supervised community corrections sanctions (with conditions) appear to produce better rehabilitation outcomes than unsupervised community sanctions, notwithstanding differences among cohorts of offenders.

Community-based orders are significantly less costly than prison

There are considerably more people placed on community corrections across Australia than in prison, with about 83 000 people in community-based corrections nationally in 2019-20 compared with a prison population of about 41 000 (chapter 2).

The average daily prison cost is approximately $330 per person while the corresponding cost for community corrections is less than $30. The ratio of daily costs for prison relative to community corrections is approximately 10:1 on average, with variation across jurisdictions (figure 3.5). Changing sentencing so that there is a 1 per cent decrease in the number of people in prison, with the relevant offenders moved to community corrections orders, would save taxpayers approximately $45 million per year nationwide.

The higher cost of prison relative to community service is driven by infrastructure (prison facilities) and supervisory requirements. On the other hand, community corrections appear to be much less capital intensive and more dependent on staff requirements. Differences in the cost of community services across jurisdictions stem largely from the offender-to-staff ratio (figure 3.6). Jurisdictions with relatively higher offender-to-staff ratios, such as New South Wales and Queensland, tend to have lower costs per offender.

Figure 3.5 – System costs are structurally different across jurisdictions

Daily average expenditure — prisons versus community corrections, per person, 2019‑20^a

a. Expenditure includes operating expenditure and capital costs, less operating revenue (for example, revenue from prison industries). Excludes payroll tax and prisoner health and transport/escort costs where able to be disaggregated by jurisdictions. Capital costs include user cost of capital (calculated as 8 per cent of the value of government owned assets), land, other assets, debt servicing fees, and depreciation.

Source: SCRGSP (2021a).

Figure 3.6 – Community corrections costs are lower with higher offender-to-staff ratios

Community corrections daily cost ($) and offender-to-staff ratio

Source: SCRGSP (2021a), tables 8A.7 and 8A.19.

The fiscal cost of recidivism

A significant proportion of the costs of prison can be attributed to prisoners with prior convictions (figure 3.7). A simple approximation to the annual fiscal cost of imprisonment attributable to recidivism is about $3.1 billion nationally, which accounts for between half and three quarters of the operating costs across jurisdictions.[21]

Attributing a cost to the prison turnover from recidivism is complicated by the many possible pathways that individual prisoners may take over the course of their lives. For instance, Morgan (2018) documented the complex pathways that a sample of prisoners and offenders in community corrections took over a five year period, with many individuals in the sample moving in and out of and between prison and community detention.

Figure 3.7 – Recidivism — a major contributor to the costs of prisons

Expenditure, $ millions, 2019-20^a

a. Columns show expenditure on prison apportioned by the percentage of prisoner population with prior offence and no prior offence derived from the Australian Bureau of Statistics prior imprisonment status data.

Source: ABS (Prisoners in Australia, 2020 table 14); SCRGSP (2021a), table 8A.1.

 

	Finding 3.1
The fiscal cost of prison, both as a component of the overall criminal justice system and as a proportion of state and territory governments’ budgets, is growing. Prisoners with prior convictions account for the bulk of prison costs across most jurisdictions. Costs per prisoner differ across jurisdictions reflecting a range of factors including staffing requirements as well as program delivery.

 

Finding 3.2

The higher relative cost of prison to community corrections suggests that there is potential for major cost savings if there are alternatives that still meet the objectives of the criminal justice system. Community corrections provide a lower cost but imperfect substitute for prison — while their effectiveness relative to prison in terms of deterrence and incapacitation appears to be lower, they tend to perform better in terms of rehabilitation.

3.3        The indirect costs of imprisonment

While the fiscal costs of imprisonment are relatively straightforward to calculate, there are other costs of imprisonment that are typically difficult to monetise with any degree of precision, but which nonetheless can be material. While some of these costs are imposed intentionally on prisoners to deter criminal behaviour or exact retribution for crime, others are unintentional or fall on prisoners’ families or society more broadly. At a conceptual level, Becker (1968) described indirect costs as the discounted sum of the earnings foregone while incarcerated, and the value on the restrictions in consumption and freedom.

Many subsequent studies that have attempted to estimate the magnitude of these indirect costs are mired in statistical and data challenges around causality. At issue is the ability to attribute just the incremental costs borne by an individual, their family, and, ultimately, the broader community, specifically to the incarceration of that individual. While many studies look at these costs, a lot of them are associative in nature rather than causal.

In many cases, individuals enter prison from a position of social disadvantage (chapter 2). Many have poor family or community connections. Individuals are likely to be unemployed, have limited education, or perhaps have a pre-existing mental or physical health condition (Morgan 2018). Any indirect costs that are attributable to prison would need to be measured over and above the baseline implied by these existing factors. That said, some of the collateral consequences of imprisonment on individuals may reinforce the pre-conditions that often get people into prison in the first place.

These indirect costs can be categorised to include the impact of prison on:

•     offender outcomes, such as employment, education or health

•     the wellbeing of affected children and families

•     post-release behaviour.

There are alternatives to prison that may perform better in terms of offender outcomes, preserve family and community networks, or improve post-release behaviour at lower fiscal cost. However, alternatives are also likely to entail a different balance of community expectations of safety, fairness, and confidence in the criminal justice system for different risk categories of offenders. These issues are pointed out below where relevant, and explored further in chapter 4 in the context of case studies of alternative approaches.

Prison experience affects a range of offenders’ outcomes

Prison is generally associated with poorer employment and education outcomes

Research has consistently found that crime and recidivism outcomes are associated with lower educational attainment and employment (Giles and Le 2009). The question here is: does the experience of being in prison make this worse?

A range of studies (mainly US-based) report a significant negative effect of prison on post-release employment and earnings (Bushway 2004; Finlay 2009; Raphael 2007).

However, only a few of these studies are based on evidence which has discerned the direction of causation. For example, there is causal evidence that pre-trial detention (that is, remand) decreases formal sector employment (Dobbie, Goldin and Yang 2018). Similarly, a study that explicitly calculated the social costs of imprisonment found that each additional year of incarceration in Texas reduced post-release employment by 3.6 per cent. Further, for felony defendants with otherwise stable prior earnings who were incarcerated for one or more years, re-employment declined by at least 24 per cent in the five years after being released. These employment effects translated into social costs ranging from $56 000 to $67 000 for a one-year prison sentence (Mueller-Smith 2015).

The adverse impact on future job opportunities reflects both a depreciation of skills and the stigma attached to having a criminal record — both of which raise the costs of re-entering the labour market (Executive Office of the President of the United States 2016; Leigh 2020b).

As an offsetting factor, individuals who were likely to have been unemployed or out of the labour force prior to being incarcerated may gain access to employment programs inside prison, which could enhance their job prospects. Many prisoners undertake education, training and/or work in conjunction with more specific rehabilitation programs. About 80 per cent of eligible Australian prisoners are employed while incarcerated, and more than 30 per cent undertake some type of formal education and training, with 20 per cent undertaking accredited vocational education and training (SCRGSP 2021a).

Alternatives to prison tend to have lower disruption to employment and education

Offenders who are diverted from prison and given a non-custodial sanction, such as a community corrections order, have the opportunity to retain their employment — although it may be disrupted due to the conviction (Morgan 2018; Vera Institute of Justice 2013). That said, many offenders do not have a job to start with. A Victorian study into the relative costs and benefits of prison compared to community corrections found that in a matched cohort of about 800 offenders, only a quarter of individuals were employed at the time of entering prison (Morgan 2018, p. 28).

Alternatives to prison where evidence suggests less of a disruptive impact on employment and education include a range of diversion programs and alternative sentencing courts — particularly those with a restorative justice element. In both cases, the programs potentially create benefits from improved employment and education outcomes for low-risk offenders without compromising community safety, fairness, and confidence. Chapter 4 outlines several relevant case studies, including diversionary programs, alternative sentencing courts targeted to Aboriginal and Torres Strait Islander people, and restorative justice in New Zealand.

The mental health of prisoners is much poorer than the general population

The state of an individual’s health has an important impact on prisoner outcomes. It is well-documented internationally that prisoner populations are disproportionately made up of individuals with a high burden of disease (National Research Council 2014).

In Australia, the differences in prisoners’ health from the general population is most notable for mental health. For instance, an Australian Institute of Health and Welfare (AIHW) survey of prisoners indicated a mental ill-health prevalence of about 40 per cent compared to 22 per cent in the general population (AIHW 2019a).

This burden of disease can be pre-existing, but can also develop or be exacerbated in custodial settings. In relation to mental illness in particular, there is some evidence to suggest that, for the most part, common psychiatric disorders tend to predate incarceration (Schnittker, Massoglia and Uggen 2012). However, those authors also found that incarceration was related to subsequent depressive and bipolar disorders.

Suicide is a leading cause of deaths in prison, and is strongly related to mental ill-health as well as history of child abuse, alcohol and other drug disorders, all of which are more prevalent in the prison population than in the general population (AIHW 2019a; Butler et al. 2006; Stewart et al. 2020). People in prison are ten times as likely as the general Australian population to report a history of suicide attempts and suicidal ideation (Butler et al. 2018). And the rate of suicide has been measured to be between five times higher in men, and twelve times higher in women incarcerated in Australian prisons compared to the general population (Kariminia et al. 2007).

While it is difficult to attribute a cost to the loss of life and the impacts on families and communities, these studies demonstrate the prevalence of suicide is a priority issue for all governments in improving prisoner outcomes. The importance of this issue is a priority under the National Agreement on Closing the Gap — a significant and sustained reduction in suicide of Aboriginal and Torres Strait Islander people to zero (JCOCTG 2020, target 14).

Treatment of mental health and drug issues can be effective in prison

For some people, interaction with the justice system might be the first time that a health professional has assessed their mental health, even though it is not necessarily the ideal environment for treatment (AIHW 2019a; National Research Council 2014). Drug and mental health treatment, and other cognitive behavioural interventions delivered in the community are typically more effective than those offered in prison (Vera Institute of Justice 2013).

Notwithstanding, there are a range of interventions that serve as strong examples of how mental health and substance abuse issues can be dealt with in prison (chapter 4). These include inpatient or intensive outpatient drug treatments, and cognitive behaviour therapy for lower-risk prisoners.

Imprisonment can affect families in different ways

Incarceration of a parent may harm children and their development, potentially transmitting the current cost of incarceration to families, future generations, and the broader community in which they live. The dynamics underlying these effects are complex, making the impact of imprisonment on families difficult to quantify. The experience of trauma and intergenerational effects from parental incarceration facing Aboriginal and Torres Strait Islander people in particular highlights some of these complex issues (box 3.5).

Incarceration of a parent can have negative and positive effects on children. The negative side includes the psychological strain from the separation experience, learnt harmful behaviours that are passed down from parent to children, or a reduction in household income with subsequent adverse effects on human capital investment (Murray and Farrington 2008).

On the other hand, incarceration of a parent can lead to a positive outcome for children in terms of incapacitation, but also through changed behaviour of the non-incarcerated parent, a deterrence effect on children through a higher salience of the prison experience, and a post-release benefit from rehabilitation of the parent while in prison (Norris, Pecenco and Weaver forthcoming).

Some alternatives can have better rehabilitation outcomes for lower-risk offenders

There is evidence that sentences that do not involve time in prison can lead to better rehabilitation outcomes by letting offenders remain with their families and maintain connections with the community (Vera Institute of Justice 2013). A US-based study on community-based electronic monitoring of lower-risk offenders has estimated significant reductions in reoffending, partly due to the promotion of attachment to work and family (Williams and Weatherburn 2020).

Examples of community-based alternatives to prison that build on the benefits of maintaining family and community connections are explored in chapter 4.

Box 3.5 – Intergenerational effects of parent or carer incarceration on children
High rates of imprisonment for Aboriginal and Torres Strait Islander people, as described in chapter 2, have significant and detrimental effects on Aboriginal and Torres Strait Islander children and families. Aboriginal and Torres Strait Islander children with a parent or carer in prison are likely to have faced a range of adversities before imprisonment occurred. However, imprisonment often compounds other adversities, exacerbating the severity and chronicity of trauma and deprivation. Imprisonment of a parent or carer of Aboriginal and Torres Strait Islander children has been found to be associated with the children having poor physical, social, emotional, communicative, and cognitive developmental outcomes. For many Aboriginal and Torres Strait Islander people, the trauma of parent or carer imprisonment can be felt across multiple generations and kinship networks. Disrupted social and cultural bonds, and the removal of key people in the lives of children through incarceration create greater social, cultural and economic costs in Indigenous families within communities with high incarceration rates (Roettger, Lockwood and Dennison nd). There are a number of programs that aim to address trauma and intergenerational effects of incarceration on Aboriginal and Torres Strait Islander children. However, there is little formal evidence of the effectiveness of the programs. Notwithstanding, three general themes can be distilled from the studies and reports that do exist. 1.  Prioritise the principle of self-determination — experience suggests that policies and programs that are responsive to Indigenous families holistically are more effective. Indigenous services can better support parents, carers and children to tackle complex traumas caused by imprisonment through the provision of culturally-safe services. Ensuring cultural safety is also important for non-Indigenous service delivery. 2.  Minimise trauma from separation — correctional services can support families by providing opportunities to maintain or re-establish bonds when a parent or carer is incarcerated to reduce the negative impacts of separation on children. Programs should aim to overcome the barriers for maintaining family connections with parents or carers who are incarcerated. Significant barriers include travel times to prison, costs of visits, and the cost of phone calls. There is also evidence that Aboriginal and Torres Strait Islander parents actively discouraged their children from visiting while in custody to reduce the experience of emotional disruption and the intimidating prison environment. 3.  Wrap-around services — there is a growing body of evidence supporting the use of trauma-informed wrap-around services for high-risk families. A wide range of services have been identified as high priority for parents or carers post-release, including assistance with stable housing, relationship issues, trauma, and childcare. Wrap around services are delivered through a case manager that liaises with the different professional service providers, and aims to deliver a highly individualised approach to address specific needs. Source: Roettger, Lockwood and Dennison (nd).

The experience of prison can affect people’s post-release behaviour

Being in prison can influence how people behave upon release, including their likelihood of reoffending. A person who has been released from prison will often face the same factors that led to their offence in the first place, with the addition of any changes that have occurred during their period in prison. Exposure to a peer network of offenders in prison might allow individuals to gather knowledge of how to commit crimes, increasing the likelihood of reoffending on release (Abrams 2011). Post-release behaviour may also be affected by the loss of employment and family links while incarcerated, as well as the stigma of being an ex‑prisoner (Siwach 2018; Tissera 2019).

On the other hand, it is possible that a prison sentence may improve post-release behaviour and outcomes, especially in circumstances where rehabilitation is emphasised (Arbour, Lacroix and Marchand 2021; Bhuller et al. 2021; Tobon 2020). There is evidence that use of risk and need assessment tools to identify and target criminogenic factors, and assign rehabilitation programs accordingly, can significantly reduce reoffending. Results like this critically depend on the effectiveness of targeting, so that only individuals with a higher likelihood of benefiting from a rehabilitation program are selected (Arbour, Lacroix and Marchand 2021).

Access to stable housing has been shown to have an important influence on post-release behaviour. Homelessness has been consistently recognised as an important factor in whether an individual first comes into contact with the police, and there is evidence that access to stable housing affects whether an individual reoffends after being released (Baldry et al. 2006).

In Australia, homelessness among people detained in prison is pervasive. An Australian study into the relationship between homelessness, housing stress and criminal justice (Payne, Macgregor and McDonald 2015) found that the need for intensive accommodation support services in the detainee population was larger than previously understood. In the four weeks before entering prison, 5 per cent of entrants reported sleeping rough, and 28 per cent reported being in emergency accommodation (AIHW 2019a). Among prisoners about to be released, more than half (54 per cent) expect to go in to short‑term or emergency accommodation (AIHW 2019b).

Post-release outcomes can be improved through continuity of support

Support for transitioning back to the community reduces the likelihood of reoffending, whether that be for employment, education, continuity of healthcare or housing services (Baldry 2007; Griffiths et al. 2016; QPC 2019). The effective throughcare model, briefly described in section 3.1, is one approach to helping inmates address a range of often complex needs, and return to society.

The need for effective case management to underpin improved rehabilitation upon a release from prison is discussed as a case study in chapter 4, along with more direct approaches to reducing recidivism through explicit system-wide targets.

 

Finding 3.3

Notwithstanding shortcomings in the empirical literature, the indirect costs of imprisonment on employment prospects are likely to be significant for some offenders. The impact of incarceration on children and other family members is more nuanced, with studies reporting both negative and positive impacts. More effective rehabilitation may lower the indirect costs of prison, but further research and evaluation is needed to provide the necessary evidence about what works.