Let's be clear - contracting out of ancillary services at prisoners is no issue, and there may be a case for contracting out prison management. The key is the disconnect between incentives to HAVE more prisoners, and the public policy reason for prisons.
Ideally, prisons would be nearly empty because crime would be rare. Ideally, prisons would deliver people reformed and who would never be repeat offenders.
However, a private prison owner would WANT repeat offenders, and would WANT criminals to want to return. That creates incentives not only to not rehabilitate, but to make prison desirable. Hardly what any of us want.
The flipside is that paying prisons to be feared creat incentives for abuse, and for crimes in prisons to be ignored. As much as many of us have glee at rapists and murderers suffering violence in prison, if you want prison to be a place of corporal punishment you should be transparent about it - as in Malaysia. Don't pretend that a Darwinian approach to justice in prison is a civilised substitute.
So I am wary of privatising prisons, wary of profits from applying force to people, wary of the incentives and malincentives around it.
Indeed, as Not PC has already pointed out, why is National and ACT only pursuing THIS privatisation? Why don't the usual masses of the lumpenproletariat give a damn about prisons, when they go apoplectic about privatising TVNZ, NZ Post, Air NZ, Kiwirail or a power company?
Indeed, if any sector needs more of the private sector, it is education. Imagine if ACT's policy, same as the UK Conservative Party's policy, was implemented in some form - parents not paying twice for education.
Now that's a step towards privatisation that would excite me, privatising prisons worries me, especially when mixed with the attitudes shown here by some in government.