Lindsay Mitchell: The real cost of gangs

Earlier this week MSD released a report that found gang members had cost Work & Income and Child,Youth and Family $714 million in the 22 years between 1993 and 2014.

The annual cost of each gang member works out to $8,948 annually (3,627) - less than a superannuitant.

The remark is flippant. But I did mentally muse that raising the Super qualifying age to 67 (in line with other countries we like to compare ourselves to) would save far more than $714 million over 22 years.

On a serious note - and the problem of gangs and the abuse of their children is a very serious issue - the all-up cost to the tax payer is much higher than $32 million annually.

A few other major costs can be roughly (but totally unscientifically) calculated.

Not included in the MSD bill is the social security benefits of the mothers of gang member's children. Their welfare receipt will be greater than the father's. How much greater is unknown. But,

"7,075 dependent children were included in benefits with gang members for an average of 2.8 years."

Not very long because the children would generally be included in the benefits of their mothers.

I reckon doubling the cost would be conservative. There's another $64 million.

Then there's the cost to Corrections. According to SuperU (ex Families Commission):

"As of April 2013, gang members and affiliates comprised over 30 percent of inmates, with over 10 percent of the prison population belonging to the Mongrel Mob."

Thirty percent of prisoners  equates to around 2,400 @ $100,000 each which represents a yearly bill of $240 million.

Next is the cost to the Justice system. It costs $450 million to run the Ministry of Justice. May as well carve off 10% of that for gangs. A further $45 million.

And the police of course. Their annual budget is $1.4 billion. Let's be conservative again  and say 10% is spent on dealing with gangs so $140 million annually.

I guess ACC would have some involvement but wouldn't like to hazard a guess at a number.

So what have we got so far:

MSD  $96m
Corrections $240m
Justice $45m
Police $140m

Total: $521 million annually.

Or $143,645 for each gang member on average.

Credible? Maybe I've over-stated costs - maybe not. What I haven't done is include the Health system costs from violence and ill-health; nor Customs involvement nor Housing NZ.

While the MSD numbers were somewhat underwhelming, and expressed as a 22 year sum, not very helpful, this further exercise has rammed it home to me that breaking the cycle of inter-generational gang membership and activity would have enormous social and economic benefits for everybody.