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The cost of prison vs residential treatment for offenders

Reviewing the alternatives

Diverting Indigenous offenders from prison to community rehabilitation can deliver significant financial savings as well as improvements in health and mortality.

In 2009, the Australian National Council on Drugs’ National Indigenous Drug and Alcohol Committee (NIDAC), released a paper, Bridges and Barriers: addressing Indigenous incarceration and health, which identified a disproportionate number of Indigenous Australians in the correctional system, and argued the importance of diverting young men and women away from a life of substance use and crime. The paper recommended that funding be redirected from the construction and operation of any further correctional centres to establish a ‘break the cycle’ network of Indigenous-specific residential rehabilitation services for courts to utilise as a viable alternative to incarceration.

Deloitte Access Economics was commissioned by NIDAC to:

  • Examine the patterns and prevalence of Indigenous people in the prison system
  • Outline the impact and implications of incarceration of Indigenous people and 
  • Analyse the costs and benefits of addressing Indigenous problematic alcohol and drug use with treatment, particularly residential rehabilitation, as compared to prison.

The cost–benefit compares the costs and benefits of investment in residential drug and alcohol treatment for Indigenous people convicted of non-violent crime related to their substance use versus incarceration.The report finds that there are significant financial savings of $111,458 per offender, as well as improvements in health and mortality, with the diversion to community rehabilitation of offenders from prison.

Prison vs residential treatment
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