Budget blowouts: offshore processing costs $1.2bn for fewer than 300 people | Australia news

Australia will spend nearly $1.2bn on offshore processing this financial year, even though fewer than 300 people remain in detention in Papua New Guinea and Nauru.

That’s roughly $4m for each person.

The government has spent more than $12bn on offshore processing in the past eight financial years, figures in home affairs department annual reports show.

This year’s budget reveals that costs will increase by more than $300m in 2020-21, despite significantly declining numbers of refugees and asylum seekers.

In a puzzling exchange [pdf p58-59] at Senate estimates in October, Labor’s immigration spokeswoman Kristina Keneally questioned department officials about last year’s budget blowout.

At nearly $1bn, spending was almost $450m more than projected, but Keneally was not able to procure an answer about where the money had gone.

Under questioning about the figures, home affairs secretary Michael Pezzullo demurred, saying he was “not a walking abacus”.

Chief financial officer Stephanie Cargill then suggested that the budget figure disclosed for offshore detention is routinely estimated for less than the whole financial year in question.

“The increase is due to the fact that the original budget didn’t necessarily have a full 12 months of funding,” she said.

The Guardian’s analysis of budget papers shows that home affairs consistently underestimates the cost of offshore detention by between $200m and $700m a year.


Its forward estimates have proven even more radically inaccurate. Projecting into the future since 2014, the department has doggedly maintained its costs would fall to about $400m each year. Over that period, the actual spend has averaged more than $1.1bn a year.

There are often discrepancies between the figures disclosed in departmental budgets, annual reports, and in answers to questions at Senate estimates.

Home affairs has not responded to requests for information.

Sahar Okhovat, from the Refugee Council of Australia, says the reported spending on offshore is less than the true cost because it doesn’t include additional foreign aid as part of resettlement deals, the cost of medical care and detention for people evacuated to Australia, and the significant legal costs and settlements paid to detainees for their ill-treatment.

“It’s an extraordinarily expensive policy,” Okhovat says. “It’s hard to grasp when you put it against the scale of displacement globally. It’s been costing over a billion per year to systemically torture a very small group of people for a very long time.

“There is no breakdown, no way to see where the money is spent.”

This year the average cost of holding just one person offshore is significantly more than it would cost to allow everyone remaining in PNG and Nauru to live in the community in Australia.

In Senate estimates [pdf p100], officials revealed that in 2017-18 it cost only $10,221 a year to allow a person to live in the community on a bridging visa. Community detention costs $103,343 a year for each person, and onshore immigration – in facilities such as Villawood in Sydney – costs $346,660 a person a year.

Other comparisons bear consideration. This financial year, Australia will contribute $27m to the UNHCR, an amount that equates to 2% of the funding it will spend on offshore detention.

Indeed, the refugee agency’s entire global budget of about $8.7bn for last financial year was only nine times Australia’s offshore processing budget – which caters for about 300 people. There are 79.5 million forcibly displaced people around the world.

In the October federal budget [pdf, p108-109] the government announced it would cut humanitarian resettlement places by more than a quarter, to a cap of 13,750 people a year. Along with cuts to support services, the measure will save about $950m over four years.

The Refugee Council says there are 100,000 people seeking asylum in Australia, including people who previously came by boat and those who arrive each year by air. The government has dramatically cut financial support for those people in recent years, down to a total of less than $20m.

“It’s a worry, because more people are being denied access to income support and they’re not eligible for other benefits, including the Covid-19 relief package,” Okhovat says.

“But then the government does have all this money to spend on programs that are only about deterrence. I really can’t understand why it hasn’t created more outcry.”

The government has been prepared to pay almost any price to prolong offshore processing. In 2017 an audit of the home affairs department’s contracts revealed $1.1bn had been spent without any record of authorisation and a further $1.1bn had been authorised by officers who did not have the required permission. The department had made contract variations totalling over $1bn without a documented assessment of value for money.

In a subsequent report published earlier this year, the Australian National Audit Office found the department had made improvements to its processes. However, it still failed to show that taxpayers got value for money for contracts worth hundreds of millions of dollars to keep refugees and asylum seekers in PNG.

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