Private prison operator Serco will be "laughing all the way to the bank" after the Government announced plans to axe parts of existing public prisons and associated jobs, Labour says.
About 260 staff will lose their jobs as units in Waikeria, Tongariro-Rangipo and Rimutaka Prisons are closed.
The closures will save around $20 million, plus capital costs of up to $145 million had the units remained open.
The Department of Corrections said the planned closure of the prison units will coincide with the opening of the new 960-bed Auckland South Corrections Facility.
The new prison at Wiri, South Auckland, will be run by private company Serco.
Overall the number of beds for prisoners will increase by 433 this year, the department says. However, most of the 250-plus jobs at the new Auckland prison are already filled.
Corrections said it would help affected staff move to other prisons - where there are vacancies - if they wish. Labour's corrections spokesman, Kelvin Davis, said the money spent on the new Auckland prison should have been invested in existing facilities.
"It seems a waste of time to spend $900 million to build a prison, and then go and close prisons that already exist.
"Everything seems to be skewed against the publicly trained corrections officers, and Serco is making money. They are just laughing all the way to the bank with this."
However, Corrections Minister Peseta Sam Lotu-Iiga said the closures would ultimately strengthen the system and help cut re-offending rates.
"Prisoners have a much better chance of successful rehabilitation in modern facilities where they have access to education, training and employment."
Corrections Association industrial officer Beven Hanlon said the deal with Serco was that Corrections would pay for the management of a full prison, even if numbers were lower. "This means they will fill it and then close ours [public prisons] ... The prison was never needed, now it is costing public sector jobs."
• About 260 Corrections staff will lose their jobs as units in Waikeria, Tongariro-Rangipo and Rimutaka Prisons are closed.
• The plan coincides with the building of a new prison in South Auckland, which will be run by private company Serco.
• Corrections says it will help affected staff move to other prisons where there are currently vacancies, if they wish to.