Victoria's road gangs: Good for roads, bad for business
Victoria wants prisoners mowing verges so skilled crews can fix potholes. The budget logic works — but what happens to the contractors who do that work for a living?
Victoria's roads are genuinely in poor shape, and the government's plan to deploy minimum-security prisoners for roadside maintenance is a sensible enough answer to one narrow problem. Prisoners collect rubbish, mow verges, and clean graffiti; skilled crews, freed from that grunt work, fix potholes. The logic holds on its own terms. The trouble is that the logic does not stay inside its own terms.
The pay gap is not a productivity advantage — it is a structural subsidy
The pay structure tells the story clearly. Road maintenance workers employed commercially are entitled to minimum wages and the full suite of workplace protections. Prisoners doing the same work on the same roads earn as little as seven dollars a day. That is not a productivity advantage. It is a subsidy to government operations, paid for by an arbitrarily cheaper workforce. Two people sweeping the same stretch of highway, under the same sun, are operating under entirely different economic rules.
For the state, this is attractive. Road maintenance budgets stretch further. Visible results arrive faster. Politically, it threads a needle: tough on crime (prisoners are working), fiscally responsible (the budget is eased), and responsive to suburban frustration (potholes are being addressed). Premier Ben Carroll, running into a November election, has structured a policy that is hard to argue with on its surface.
When labour is not priced at market rates, the market cannot tell you whether you are actually doing the work cheaply, or just shifting the cost somewhere else.
But private contractors who maintain Victorian roads for a living do not compete only on quality. They compete on price, and price is largely a function of labour costs. When the state enters that market using labour that costs a fraction of the award rate, it is not competing, it is distorting. A private firm bidding for a roadside maintenance contract cannot undercut a government entity whose workers earn seven dollars a day. Over time, firms either exit the segment or reduce their own workforces, knowing the government has effectively claimed the work.
When the price signal breaks, the market cannot self-correct
This dynamic is not unique to prison labour. It appears wherever government enterprises operate in markets alongside private ones, using structural cost advantages rather than genuine efficiency gains. The problem is not that public work is inherently worse. It is that the price signal stops meaning anything. When labour is not priced at market rates, the market cannot tell you whether you are actually doing the work cheaply, or just shifting the cost somewhere else. In this case, the cost is being shifted onto prisoners earning sub-minimum wages, and onto the private sector firms that cannot compete.
Rehabilitation gains are real, but this program does not deliver them
There are real rehabilitation arguments for prison work. Australian and international research consistently shows that meaningful employment during incarceration reduces reoffending. NSW data from Corrective Services Industries traineeship programs show lower reoffending rates among participants, particularly among Indigenous people. The Landcare partnership at Broken Hill, where prisoners are helping restore a local lake on Country, is the kind of program that earns the word "meaningful." Roadside rubbish collection is harder to make that case for. It may keep people busy. It will not, as the research notes, address the digital divide that leaves many former prisoners structurally unemployed on release. Of those leaving Victorian prisons, 72 per cent have no paid work arranged within two weeks of getting out. Verge-mowing does not change that number.
The workforce question also connects to something broader. Australia's job mobility has been falling, and as we've covered previously, when workers stop moving between roles, wage growth stagnates and the economy becomes less productive. A government policy that removes a category of entry-level work from the private labour market, replacing it with a captive workforce, pushes in exactly the wrong direction. It reduces the number of real jobs available in a segment that, for many people without qualifications or with patchy work histories, represents a genuine entry point.
None of this makes the policy indefensible. Victoria's roads have real problems and genuine backlogs. Some prison work programs are well-designed and demonstrably help people reintegrate. The question is not whether prisoners should work. It is whether the design of this program serves anyone beyond the government's immediate budget and electoral interests, and whether the downstream costs to private contractors and to the labour market have been honestly counted.
They probably have not been. Policies structured around low-visibility beneficiaries and high-visibility results rarely are.
Sources
The Bearing — Less people are changing jobs, and that's bad
The Bearing — Former Premier exits to trigger by-election and dodge accountability
Frequently Asked Questions
How much do prisoners get paid for work in Australia?
Pay varies by state and program, but in Victoria prisoners doing roadside maintenance work can earn as little as seven dollars a day. This compares to the full minimum wage and workplace protections that commercial road maintenance workers are legally entitled to.
Does prison work actually reduce reoffending?
Research consistently shows that meaningful employment during incarceration reduces reoffending. However, the effect is strongest in programs that build credentialled skills — NSW traineeship data shows lower reoffending, particularly among Indigenous participants. Unskilled maintenance tasks like rubbish collection and verge-mowing are harder to make that case for.
Why does prison labour hurt private contractors?
Private road maintenance firms compete primarily on price, and price is largely a function of labour costs. When a government deploys workers earning seven dollars a day on contracts that private firms must bid for using workers paid at minimum wage rates, private firms cannot compete on cost — and over time exit the segment or shrink their workforces.
What happens to prisoners after they are released in Victoria?
72 per cent of people leaving Victorian prisons have no paid work arranged within two weeks of release. Roadside maintenance programs during incarceration do not address the structural barriers — including the digital divide and lack of credentials — that drive that figure.
Is it legal for governments to use prison labour on public works in Australia?
Yes. Prison work programs operate across multiple Australian states and are legal provided they fall within the relevant corrective services legislation. The legal question is largely settled; the live debate is about economic design — specifically whether sub-minimum-wage prison labour distorts the private labour market for the same type of work.