By Mia Schlicht

Australia’s reliance on incarceration as the default punishment for a wide range of offences has come at a significant financial cost to taxpayers whilst failing to improve community safety. This report outlines the cost of prisons, trends in incarnation, the incarceration of non-violent offenders and recommendations for reform.

Key findings

• State and federal governments are now spending $6.8 billion each year on prisons, with spending having increased by 50% in 10 years.

• Incarceration costs Australian taxpayers $436 per prisoner per day, or $159,510 per prisoner per year.

• Governments spend up to $2.6 billion on imprisoning offenders who pose minimal risk to community safety.

• The reliance on incarcerating non-violent offenders is straining prison capacity.

• In the longer term, prison capacity concerns can only be resolved by adding new capacity or by sentencing reform.

• Sentencing non-violent offenders to alternatives to incarceration would reduce taxpayer expenses and improve community safety by reallocating resources to crime prevention.

Key recommendations

• Offender employment programs to address Australia’s worker shortage.

• Financial sanctions (‘offender super-taxation levy’).

• Technological incarceration such as electronic monitoring should be advanced as a criminal sanction.

Melbourne: Institute of Public Affairs, 2025. 20p.