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Diverting non-violent Aboriginal offenders into drug and alcohol treatment - rather than prison - could save taxpayers $111,000 a year for each prisoner, according to a new study by Deloitte Access Economics.

The National Indigenous Drug and Alcohol Committee study, released today, reveals a further $92,000 for each offender would be saved in the long term because community rehabilitation resulted in lower mortality rates and better health and quality of life.

The report has prompted calls for Australian governments to halt plans to expand and build more prisons and invest some of the $3 billion spent each year on jails in community treatment initiatives.

Australian National Council on Drugs executive director Gino Vumbaca said there would always be a need for prisons but, with many jails overstretched and overrepresented by Aboriginal offenders, it made economic and humane sense to invest more in community options.

He said that the idea prison would teach offenders the right lessons was misguided given 50 per cent of indigenous prisoners were back in prison within two years.

The report highlights a significant increase in prison investment over the past two years at the same time when indigenous rehabilitation services have been cut or wound back.

Nationally, 26 per cent of the adult prison population are indigenous and in WA there are 3390 indigenous prisoners per 100,000 people - 20 times the non-indigenous offender rate.

National Indigenous Drug and Alcohol Committee chairman Associate Professor Ted Wilkes said the shameful level of indigenous incarceration needed urgent action.

"Imprisonment is destroying our people, families and communities," he said. "Diversion programs have huge benefits . . . we need a new pathway."

Corrective Services Minister Murray Cowper said the State Government made no apologies for its prison spending to get criminals off the streets but noted there were various drug and alcohol treatment programs in prisons and court diversion schemes.