More prisons will be turned into working prisons where all prisoners will be placed in a 40-hour week programme of work and rehabilitation, Prime Minister John Key said in his statement to Parliament today, the first sitting day of the year.

It is part of the Government's goal of reducing reoffending by 25 per cent by 2017.

"The Government will increase employment opportunities for prisoners by establishing more of our prisons as working prisons, where all prisoners will be engaged in a structured 40-hour week of employment and rehabilitation activities," he said.

It is one of the few new announcements in Mr Key's speech which set out the Government's policy programme for the year which has already been well signalled.


The Government has already made it clear it wants more prisoners in work but turning prisons into structured work prisons is a step further in that direction.

Of the country's 19 prisons, only one at present is deemed a working prison, Rolleston.

Mr Key touched on some of the themes of his state of the nation speech given at the North Shore last Friday, including apprenticeships and the battleground of housing affordability, where Labour and Greens have new ''hands-on" policy to help first-home buyers.

He said the Government was undertaking work with the aim of increasing land supply; reducing delays and costs of the consenting process; improving the provision of infrastructure to support new housing and improving productivity in the constructions sector.

"Other proposals that don't do anything to fix the actual cost of building will either fail miserably, deliver dwellings that people don't want to live in, or require massive taxpayer subsidies."

He said little about two big issues: state asset sales and the goal of returning the Government's books to surplus in the 2014 - 15 year.

The future of the first asset sale, Mighty River Power, is in the hands of the Supreme Court which will hear a challenge by the Maori Council later this week.

In terms of returning to an operating surplus, Mr Key today avoided saying that the Government was still committed to the 2014 - 15 timetable, instead pointing to the fact that the December opening of the books showed the Government was on track for a modest $66 million surplus in 2014 -15.


Last week he said the Government was ''hopeful" - a step down from a commitment.
Australia late last year abandoned its target to get back into surplus in the current financial year.

Mr Key also launched a strong defence of foreign investment in New Zealand, an area that distinguishes National from most Opposition parties.

"Overseas capital can make things happen here that wouldn't otherwise happen, grow businesses that wouldn't otherwise have the means to grow, create jobs that otherwise wouldn't exist, and pay wages that are higher than they would otherwise be."

Mr Key's statement was given to other party leaders at 10 am this morning and he did not deliver it as a speech.