Australia's continued reliance on incarceration is costing taxpayers more each year, with new data showing the 'revolving door' back into prison is becoming further entrenched as governments double down on the American approach of building more expensive prisons while ignoring the evidence about what actually reduces crime.
The Productivity Commission's latest Report on Government Services, released late Tuesday, reveals that total net operating and capital costs for Australian prisons have skyrocketed to more than $7.3 billion, representing a 5% increase since 2021-22. At the same time, the proportion of people returning to prison within two years has climbed to a six‑year high of 44.5%, despite ABS data showing that rates of most major crime categories have fallen over the past decade.
Justice Reform Initiative chair Robert Tickner AO said the figures are a damning indictment of the failed approach that is delivering poor returns for taxpayers and communities.
"If any other area of government had such a high failure rate there would be a public outcry about the waste of public money," he said. "The evidence is very clear: the experience of prison increases the likelihood of future offending. If we want to get serious about community safety, we need to invest in the underlying drivers of incarceration rather than simply building and filling more prison cells."
"These figures underscore the strong economic case for reform. We are spending billions each year on ineffectual prisons when that money could be better spent on schools, hospitals, mental health services and addressing the factors behind disadvantage.
"All the research shows us that jailing is failing. It doesn't work to deter crime, it doesn't work to address the drivers of crime or improve community safety, it costs an exorbitant amount, and it increases the likelihood of people returning to the justice system."
"Stopping the relentless flow of people into Australian prisons deserves cross-party collaboration and support from Australians from all walks of life. Overreliance on prisons without addressing the underlying issues is letting all of us down.
"The fact that Aboriginal and Torres Strait Islander people represent 36.4% of the prison population 35 years after the Royal Commission into Aboriginal Deaths in Custody is beyond belief and I call on the Australian Government to step up to work with the states and territories to address the underlying issues identified by the commission."
Key Findings from the 2026 RoGS Data:
- Real net operating expenditure on prisons reached $5.43 billion in 2024–25, up 4.3% in one year and 49.3% over the past decade.
- Over the past five years, real net operating expenditure has risen 18% nationally, with the steepest increases in Tasmania (up 51%), Queensland (up 50%) and the Northern Territory (up 27%).
- The national average daily prison population reached an eight-year high of 45,526 people, up from 43,009 in 2019-20. The Northern Territory recorded the sharpest rise in the past year (up 19%), followed by Western Australia (up 13%) – these jurisdictions have also recorded the sharpest rise in the number of First Nations people who are incarcerated. Victoria is the only jurisdiction with a decline in the total prison population (−2.6%), with increases of 2-6% in other states and territories.
- Aboriginal and Torres Strait Islander people now represent 36.4% of the daily prison population. Nationally, the number of First Nations people who are incarcerated rose by approximately 11.7% in the last year alone.
- 26 people died from unnatural causes in prisons – the highest number in five years – with 10 of those being Aboriginal and Torres Strait Islander people. There were 22 deaths in police custody, six of whom were Aboriginal and Torres Strait Islander people.
- While crime rates in most categories have generally fallen over the past decade, the rate of people returning to prison is rising, indicating that the current system is creating a cycle of recidivism.
"If we are serious about community safety, we must invest in what works — not continue pouring billions into a system that is failing on every measure," Mr Tickner said. "None of this is about being soft on crime; it is about being clear-eyed about what actually works to reduce crime and make communities safer."
"We cannot keep doing the same thing and expecting a different result. Time is up – governments have all the evidence in front of them from countless inquiries and royal commissions. It is time for action."
The Justice Reform Initiative is calling for urgent investment in evidence-based alternatives to incarceration, including diversion programs, community-based supports, and First Nations placed based strategies that have been shown to reduce offending and improve community safety.
