Prime Minister John Key says estimates that the ACT Party's "three strikes and you're out" sentencing policy will cost more than $30 billion over 25 years do not stack up.
Rethinking Crime and Punishment director Kim Workman said many new prisons would be needed as a result of the policy, costing $7.5b with an additional $1b a year in operating costs.
The Government agreed to support the three strikes policy through its first reading as part of its support agreement with ACT.
It was included in the Sentencing and Parole Reform Bill which has gone to a select committee for consideration.
A "strike offence" was defined as the most serious violent and sexual offences, including murder, attempted murder, grievous bodily harm, serious firearms offences, rape and a range of sexual offences on children and young people.
On the third strike the offender would get mandatory life imprisonment with a minimum non-parole period of 25 years.
Mr Key said the Government was reserving judgment on whether it would support the policy further.
"We need to see what comes out of that select committee. But there's a fair bit of merit in it, we're not giving it lip service," he told NewstalkZB.
"We think it's potentially workable and we've asked for advice on it."
Mr Workman said Corrections Department figures showed there were 16,000 offenders who were convicted of three or more serious crimes since 1980. Of those 2000 are now in prison.
If the policy was introduced in 1980 the total prison population would now be 22,000 meaning there would have been between 44 and 48 prisons in New Zealand, rather than 20.
Mr Workman estimated costs were $500,000 a bed when a new prison was built which was how he came to the $7.5b figure.
On top of that would be $1b a year annual operating costs. He said it cost $75,000 a year per inmate. As well, prison populations were already growing.
Mr Key said he did not accept the argument.
"I don't think that quite stacks up."
He said there would be no impact on prison muster numbers for a decade, as the law change would not be retrospective.
Also by the time someone was going to jail for a serious offence for a third time they would already be getting a long sentence.
"They can't just get put away for stealing chewing gum, they have to have a conviction for a serious offence."
ACT leader Rodney Hide has previously said the law would save many lives and offenders would modify their behaviour once they realised a third offence would see them locked away for 25 years or longer.
Labour, the Greens and the Maori Party all opposed the bill.
Mr Workman said imprisoning people for long periods left them scared, violent and without the skills needed to cope.
He doubted the policy would provide a deterrent as that had not happened in the United States where it was used.
ACT's law and order spokesman, David Garrett, said that in the 10 years following the introduction of California's "three strikes" law, homicide and robbery convictions declined by around 50 percent - despite a 30 percent increase in the state's population over that time.
"California passed 'three strikes' in 1994 amid predictions of a doubling of prison populations - as Mr Workman has claimed here," Mr Garrett said.
"In the following nine years, however, California's prison population increased just 25 percent, compared to a 400 percent increase in the 10 years prior as violent crime exploded in the state."
Mr Garrett also disputed Mr workman's figures on how much the policy would cost.
He said it could not be calculated the way Mr Workman had done because prisoners who had been released could have died or left the country.
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