Thirty-nine changes have been agreed or are being seriously considered after a high-level inquiry showed up an embarrassing chain of shortcomings that allowed Smith to fly to Brazil.
The escape could have been thwarted before it even began if Corrections had simply checked with Smith's nominated sponsor that the prisoner was expected to stay with him overnight.
Not doing so demonstrated a failure to think about and mitigate the extra risks an offender like Smith posed while on temporary release from jail.
Justice Minister Amy Adams said she agreed with the inquiry, headed by retired High Court judge Dr John Priestley, QC, that there needed to be a "step change" in information sharing between government agencies.
Internal Affairs was unaware Smith's passport application was from a prisoner, for example, meaning it did not matter that he received it in his other name, Traynor.
She was comfortable with any privacy trade-offs, but did want to look closer at a handful of recommendations such as allowing the Internal Affairs Minister to cancel certain offenders' passports.
"I think we have to be very careful before we launch into automatic cancellation of passports and the like ... I don't want to find we go too far in our haste to react to this one situation."
The inquiry, for which 116 people were interviewed, also noted problems in co-operation between Corrections and police, and resourcing issues.
"[A] response should not be impeded by resource limitations or demarcation concerns about which agency has 'ownership' of a detainee," the report stated.
Ms Adams rejected entirely the suggestion that a lack of funding played a part: "I don't think you would find Corrections looking to hide behind that as an excuse."
Smith, a murderer and child sex offender, fled New Zealand in November but was caught in Rio de Janeiro.
He had obtained a passport issued in his birth name Phillip John Traynor, some 16 months before he left New Zealand on November 6.
Labour's justice spokeswoman, Jacinda Ardern, said systemic failings had been exposed by the inquiry. Processes already in place would have stopped the escape had they worked, she said.
Green Party co-leader James Shaw said the inquiry showed a huge range of errors: "The scale of this breakdown is surprising and distressing."
Tardy alarm-raising 'remarkable'
Spring Hill prison staff were much too slow to inform police that a prisoner had absconded.
When it was discovered he was not with his sponsors, a prison manager called police to give them a "heads up", but the situation was not outlined as an escape.
"Remarkably, however, it does not appear that any of the three most senior managers ... appreciated that Phillip John Smith had escaped. Actions which should follow an escape were not triggered," the inquiry report said.
It was not until the next day that Corrections told police Smith had escaped - four days after his release. Victims were not contacted as early as they should have been, potentially creating a risk for them, and police protective support was too slow.
- by Nicholas Jones
