Prime Minister John Key today signalled the Government's intention to put some of the country's prisons under private management.
"In my view, competition is a healthy thing," he said at his post cabinet press conference.
"It's my expectation that the vast bulk of corrections services will continue to be operated by the Corrections Department but I think it's eminently possible that some prison facilities may in the future be run by private sector contractors."
Mr Key said the Government did not have Labour's ideological view that there was no place for the private sector in running prisons.
"When Auckland Remand Prison was under a private operator it had very good results," he said.
"It had one escapee...rehabilitation rates were very good and they were effective from a cost perspective."
Mr Key said the cabinet was discussing prison management, not allowing the private sector to build new prisons.
The previous National government allowed Auckland Remand Prison to be run by a private contractor but Labour would not review the contract after it won the 1999 election.
Labour's law and order spokesman, Clayton Cosgrove, said overseas experience had shown "huge flaws" in private prison systems.
"There is certainly no evidence in New Zealand to suggest private prisons can be run any more cheaply," he said.
"National is ideologically committed to private prisons, no matter that they will be foreign-owned, when logic tells us that running prisons should be a core business and responsibility of the state."
