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Estimating the Costs of Crime in New Zealand in 2003/04 - WP 06/04

5.3  Comparing the public sector and the private sector

Table 7 compares the costs of crime borne by the public and private sectors (i.e. the fiscal and social costs, respectively). Overall, the private sector bears about three quarters of the costs of crime and the public sector about one quarter. The public sector bears proportionately more of the costs from offences with no direct or intended victim and proportionately less for offences against private property.

Table 7 – Public and private sector costs, by category of crime
2003/04
$ million 		Public sector % Private sector % Total %
Offences against the person 948 10% 3,172 35% 4,120 45%
– Violent offences 649 7% 2,122 23% 2,771 30%
– Sexual offences 211 2% 981 11% 1,192 13%
– Robbery 88 1% 68 1% 157 2%
Offences against private property 705 8% 3,039 33% 3,744 41%
– Burglary 261 3% 681 7% 942 10%
– Theft 181 2% 1,052 12% 1,233 14%
– Property damage 70 1% 328 4% 398 4%
– Fraud 192 0 977 0 1,170 13%
Offences with no direct or intended victim 471 5% 801 9% 1,273 14%
– Drug offences 129 1% 0 0% 129 1%
– Serious traffic 187 2% 801 9% 988 11%
– All other 156 2% 0 0% 156 2%
Total 2,124 23% 7,012 77% 9,136 100%

5.4  Total costs by intervention stage

Table 8 brings together all the costs of crime and breaks them down by intervention stage. As is to be expected, impacts on victims (health costs, property lost, lost output, and intangibles) are by far the largest costs of crime, and these are nearly all borne by the private sector. Of the $9.1 billion total, nearly 80% reflects victim impacts. Of the 20% balance, about a quarter represents the costs of prevention and three quarters the costs of dealing with crime.

Table 8 – Costs of crime, public and private sector combined, by intervention stage
2003/04
$ million 		Core justice sector Health sector Other public sector Private sector Total Share (%)
Policy 19   8   27 0%
Prevention 237   22 324 582 6%
Victim impacts   403   6,688 7,092 78%
Detection 720   112   832 9%
Resolution 373   18   391 4%
Redress 211   1   211 2%
Total 1,560 403 161 7,012 9,136 100%
Share (%) 17% 4% 2% 77% 100%  

5.5  Comparison with other jurisdictions

New Zealand’s GDP in 2003/04 was $140.512 billion.[7] Hence our $9.136 billion estimate for the total costs of crime in New Zealand in 2003/04 represents approximately 6.5% of GDP. This figure is in line with the recent UK and Australian estimates. The UK Home Office (Brand and Price, 2000) calculated the costs of crime in England and Wales in 1999/2000 at £60 billion, or about 7% of GDP. Similarly, the Australian Institute of Criminology (Mayhew, 2003) calculated the costs of crime in Australia in 2001 at A$32 billion, or about 5% of GDP.

To the extent that both these countries have similar characteristics to New Zealand, it is perhaps not surprising that their total costs of crime as a percentage of GDP are broadly similar to ours. However, it would be inappropriate to make direct comparisons or to draw conclusions for New Zealand on the basis of these figures, particularly because we have relied on the UK and Australian data to form the New Zealand estimate.

A 1995 report prepared by the New Zealand Institute of Economic Research for the then Department of Justice (Yeabsley, Duncan and Mears, 1995) estimated the costs of crime in New Zealand in 1993/94 to be just over $5 billion, or about 6% of GDP, although the report used a different methodology from that used here. Hence the current 6.5% figure may reflect the different methodologies underlying the estimates rather than any implied increase in the costs of crime.

The Police’s crime statistics (recorded crime) show that New Zealand’s overall incidence rate is falling, but the number of incidents of violent crime is reasonably static. Violent crime is more costly on average, so it may be that the overall incident rate is falling even though the costs of crime are the same, or slightly higher, than they were a decade ago.

Notes

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