Nursery industry undercut by prisons

Competition from cut-price prison labour has prompted the horticultural industry to call an emergency meeting next month.

The Nursery and Garden Industry Association, which represents more than 400 members nationwide, would hold a meeting in Hamilton next month to discuss the Department of Corrections' involvement in the horticultural industry, president Peter Fraser, of Kihikihi, said.

Of particular concern was the department supplying re-vegetation - native plants used in large-scale planting - at prices the industry could not compete with.

"Margins are already low. We can't compete with them on labour," he said.

Several growers had already gone out of business and more could follow unless the department stopped undercutting those in the sector, he said.

"These businesses are funding these Government institutions through their taxes ... and then they find themselves competing against them."

Mr Fraser confirmed nurseries operated by Corrections - Rimutaka, Wanganui, New Plymouth, Auckland and Rolleston - had been members of the association for several years, but a decision on whether they would be invited to the meeting had yet to be made.

Concerns raised at the meeting were likely to be taken to Corrections Minister Judith Collins, who, earlier this week, told the Otago Daily Times "Corrections aims to price its services at market rates so it does not undercut the market".

"It aims to compete on commercial terms."

Ms Collins said she has asked Corrections to look at ways it could work in partnership with private companies in some industries, rather than directly competing against them.

"Corrections meets with industry bodies whenever concerns are raised about perceived competition from Corrections Inmate Employment (CIE)," she said.

An aim of the Government was to reduce reoffending and "get prisoners off the treadmill of crime".

"Giving them job skills is one of the best ways of doing this."

Wallis's Nurseries managing director Clive Wallis agreed it was important for prisoners to work, but not at the expense of New Zealand businesses.

The Mosgiel-based nursery withdrew from supplying re-vegetation throughout the country more than five years ago.

"We saw the writing on the wall," he said.

"Prisons just don't have the same costs," he said.

However, CIE acting national manager Ruth Turner said prison-based enterprises had normal business overheads, such as ACC levies, insurance, power, water, staff and management costs, and also faced additional costs associated with low skill levels, high labour turnover, and the cost of supervision.

"Corrections Inmate Employment policy is to ensure services and products are sold at market rates," she said.

The old community-owned hall was run by a committee reliant on a $15 annual membership fee, and fundraising events, to pay for its upkeep.

However, the hall's committee approached the boating club in 2005 to suggest a shared building, as it struggled to maintain the hall amid dwindling membership, he said.

Broad Bay Waterfront Inc was formed as a result in 2007, with representatives from the existing hall's committee and the Broad Bay Boating Club.

Mr Potter - a boating club member - said the group's plan included the sale of the old hall, which would raise about $600,000 towards the new building.

A survey of both groups found "unanimous" support for the new building, although the wider public sentiment had not yet been tested.

Detailed designs were being prepared, although a final decision would not be made until next year when other funding sources were also confirmed, he said.

Construction was expected to take "at least 12 months", costing between $1.1 million and $1.4 million.

The building would cater for both groups, for community events and private functions, and possibly a cafe/bar development later, he said.

The building would be larger than the existing club, extending into the bay with a deck and plaza, and would require both Dunedin City Council and Otago Regional Council consents.

The community had been kept updated, but a feasibility report prepared by the group warned the consents process could prompt opposition and appeals to the Environment Court, adding "scary" costs of "tens of thousands of dollars".

That meant the committee would not proceed without "wholehearted" community support, and "outright objection could be fatal", the report said.

Mr Potter did not think isolated opposition would stop the project, although the cost of proceeding, only to end up in the Environment Court, would need to be weighed up.

"That could stop it dead ... we might find there's half a dozen people out of 400 [residents] that have the power to do that."

Corrections Dept

• Operates 140 business-like activities in prisons through Corrections Inmate Employment (CIE).

• Industries involved include farming, forestry, horticulture, engineering, joinery, timber processing, catering and printing.

• Prisoners able to undertake industry training, and complete national qualifications.

• Prisoners working in CIE industries receive an incentive for employment or training - between 20c and 60c an hour.

• Revenue from CIE industries is placed back into employment or training opportunities for prisoners.

• Employment available at Otago Corrections Facility include catering, farm, grounds maintenance, laundry, light engineering, and timber processing.

Source: Department of Corrections


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