Australians are spending more on prisons and police than most other developed countries in the world, a new study has found.

Key points: IPA report finds Australian prisons are fifth most expensive among 29 OECD countries

IPA report finds Australian prisons are fifth most expensive among 29 OECD countries There are now 36,000 prisoners in Australia, up 39 per cent from a decade ago

There are now 36,000 prisoners in Australia, up 39 per cent from a decade ago Australia ranked ninth highest in the OECD for spending on police services

The report, by conservative think tank the Institute of Public Affairs (IPA), said despite spending an estimated $16 billion a year on our criminal justice system, Australians felt less safe than the citizens of many comparable countries.

Author Andrew Bushnell said Australia's $4 billion prison system had created a "class of persistent criminals" because it was failing to reform inmates.

The report — Australia's Criminal Justice Costs: An International Comparison — said Australian prisons were the fifth most expensive among 29 countries in the Organisation for Economic Cooperation and Development (OECD).

Sweden, Norway, and the Netherlands made up the top three.

In Australia in 2015, the cost of putting one person behind bars for a year was nearly $110,000. The OECD average was $69,000 per person.

The study found incarceration rates are growing rapidly — there are now 36,000 prisoners in Australia, up 39 per cent from a decade ago.

"Over the past five years, international figures show Australia's incarceration growth has outstripped that of many comparable countries," the report said.

"Fellow common law countries, the United States, the United Kingdom, Canada, Ireland and New Zealand all reduced their incarceration levels over the [same] period."

The report also found Australians spent more per capita on police than many other OECD countries.

In 2015, Australia is estimated to have spent $427 per person on police services — ranking ninth highest in the OECD.

"All of the countries ranked higher on this measure either have significant terror threats or small populations," the report said.

Mr Bushnell said Australia's level of policing was now higher than all other common law countries apart from Ireland, at 295 police per 100,000 citizens for the year 2015-16.

Australians 'worried about crime levels'

Despite the growth of spending on prisons and police, Australians are more worried than ever about crime levels, according to the IPA report.

It noted that in four polls between 2007 and 2014, Gallup asked people around the world whether they felt safe walking in their neighbourhoods at night.

Australia ranked in the bottom third of OECD countries in every poll, never higher than 20th — and, in the most recent poll, as low as 24th.

Data from the independent government advisory body, the Productivity Commission, backs this up, Mr Bushnell said.

In 2015-16 only 51.7 per cent surveyed said they felt safe walking home at night, while less than a quarter felt safe on public transport at night.

The report found there was "mixed evidence" for whether crime was really more prevalent in Australia than in other developed countries.

International comparisons of crime rates are notoriously unreliable, but one statistic that is broadly comparable is homicide.

On this measure, Australia ranks in the middle band of 29 OECD countries, albeit higher than the UK and New Zealand, and much higher than Japan and Norway.

However, since 2006, Australia has seen a 41 per cent decrease in its homicide rate — from 1.7 per 100,000 people to 1 per 100,000 people.

Prisons creating 'class of persistent criminals'

Mr Bushnell said his research indicated Australian prisons were ineffective in correcting criminal behaviour.

Almost 60 per cent of prisoners had been imprisoned before and 45 per cent of prisoners released during 2013-14 returned to prison within two years.

This, he argued, had created a "class of persistent criminals".

The report advocates evidence-based reforms, including locking up only the most dangerous criminals and dealing with non-violent, low-risk offenders by way of home detention, community service, fines, and restitution orders.

Mr Bushnell said police resources should be concentrated in postcodes where crime was most prevalent and more money should be spent on preparing prisoners for the workforce.

"No-one doubts that prisons and police are vital government expenditures. But we are entitled to value for money and we're not getting it," he said.