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Published April 15, 2013

The Economic Cost of Our Asylum Seeker Policy


Opinion / Refugees & Asylum Seekers

Asylum seekers fenced in

By Sienna Merope

Australia’s current mandatory detention policy not only breaches our legal and ethical obligations, it is also a colossal waste of money.

Mandatory detention of what the Federal Government likes to call “Irregular Maritime Arrivals” was first introduced in 1989.  Under the policy, all asylum seekers who arrive by boat are put in detention centres until their claims for refugee status are assessed, and are processed under a different system than those who arrive by plane. These centres are scattered across the Australian mainland, mostly in remote areas, as well as of course on Christmas Island. Since the current Labor Government resurrected the Howard Government’s so called Pacific Solution in 2012, asylum seekers are also now being detained  on Nauru, and Manus Island in Papua New Guinea.

It is difficult to calculate the exact financial cost of our policy of mandatory detention. What is clear however, is that it is exorbitant. In May 2012, the Department of Immigration and Citizenship estimated that the cost of running detention centres for the 2012-2013 financial year would be over $1 billion dollars. According to the Department, this figure was based on an average number of 8,400 people in the system throughout the year, so roughly speaking that is around $119,000 per asylum seeker, per year. By February 2013 this estimate had risen to $2.124 billion dollars, reflecting both the increase in numbers and the greater cost of administering detention centres in Nauru and Papua New Guinea than mainland Australia. Unsurprisingly, the more remote the place where you lock people up, the more expensive it is.

These estimates represent the costs of leasing the accommodation necessary to run detention centres, as well as staff costs, aircharters, interpreters, and health services. What is not included however, is “capital expenditure” – the cost of constructing and furnishing new buildings in which to detain people. Because of the lack of facilities on Nauru and Manus Island, capital expenditure in relation to those detention centres is huge. The Department of Immigration estimates it will cost $316 million to establish a facility at Nauru that would hold 750 people. The capital costs for Manus Island are estimated at $230 million.

All together, the Department of Immigration says that over the next four years, setting up and running Nauru alone will cost $1.9 billion dollars. That’s $1.9 billion, to lock up 750 desperate people who have committed no crime, in conditions recently described as “cruel, inhumane and degrading” by Amnesty International.  Or, to look at it another way, more money than will be allocated to mental health reform in this country over the next five years.

Astounding as these costs are,  they are far from reflecting the whole picture. For example, there is the $1000 per month that Nauru charges for each asylum seeker sent there by Australia in so called “visa fees”. No doubt other inducements have been given to the governments of Nauru and Papua New Guinea in return for their agreement to host “processing facilities”.  There are also the additional costs to Customs and the Department of Defence in surveillance and interception of boats.

Then there is that most insidious expense – the long term health costs of keeping asylum seekers in detention. The negative impacts of long term detention on mental health are well documented. While it is almost impossible to allocate a precise dollar figure to mental deterioration, academic research indicates that it may equate to an extra $25,000 in health expenses per person over their lifetime. Given that the vast majority of asylum seekers are found to be genuine refugees and resettled in Australia, this is significant. Additionally, there are the health impacts on staff working in detention centres, many of whom burn out from the trauma of witnessing suicide attempts and self harm on a daily basis.

These costs are neither inevitable nor necessary.  Many countries have established alternatives to mandatory detention. In fact, even in Australia, asylum seekers who enter the country on a valid visa, for example as tourists, and only later make a claim for refugee status, are detained in the community. They are put on Bridging Visas while their claims are assessed, and a lucky few receive housing and income support from the government, with the rest reliant on charities.  Despite periodic bouts of hysteria about community safety and national security, the reality is that community processing poses no risk to the public. Asylum seekers on Bridging Visas have strict reporting requirements, and of the 12,100 people released into the community since November 2011, only five have been charged with a crime.

As well as having the neat side effect of not destroying the lives of already traumatised people or making a mockery of our human rights obligations, community processing would save Australia hundreds of millions dollars. A 2011 UNHCR expert report estimated the cost of mandatory detention to be $339 per asylum seeker per day. By contrast, the cost of community processing was estimated at between $7 and $39 per asylum seeker a day, depending on the level of government support provided.  These figures are consistent with government information which places payments under the Asylum Seeker Assistance scheme at $438.41 per person per fortnight, or $31 a day. Non-government organisations estimate that around 30% of asylum seekers living in the community receive such government benefits.

Community processing would therefore save up to $333 per person per day.  Even adopting the highest UNHCR estimate of $39 a day – on the assumption that the government should and would be providing funding – and taking the Department of Immigration’s initial estimate of an average of 8,400 asylum seekers in detention over 2012-2013, this would equate to a saving of at least $900,000 for the 2012 financial year. That is before the cost of Nauru and Manus Island are even factored in. Community processing is vastly cheaper, vastly more humane and it has been proven to work.

In those circumstances, the Government’s continued commitment to mandatory detention, and offshore processing in particular, is just one more example of an asylum seeker policy that contains so much Kafkaesque absurdity that it would be comic if it wasn’t so cruel. In a political climate where every dollar of spending is an opportunity for point scoring, both the Government and Opposition are happily throwing away billions of dollars to punish a few thousand people who come fleeing persecution, so that we can keep up the xenophobic fiction that we live on an island with impregnable borders.  Our asylum seeker “problem” only exists through our own making.

It is no doubt too much to hope that rational debate will feature on this issue in an election year – this is a Parliament that is getting ready to excise Australia from its own migration zone after all – but for anyone who would like to see the Gonski reforms implemented, or the budget in surplus, closing Nauru and Manus Island would be a great place to start.

29 Responses to The Economic Cost of Our Asylum Seeker Policy

  1. Gypsy Jack says:

    An excellent expose of the situation together with a commonsense solution. I’m sure the Australian citizens could be shown the way.

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  12. Hazel Healy says:

    Great piece, thank you .

    There’s a broken link on the source of the $1.9 figure for Nauru.

    • john says:

      That seems to be because the Minister for Immigration website has removed it. A new link to the same report has been added, which is a cached version of the webpage (i.e. the webpage as it appeared previously) from April 2013. – Ed

  13. Jared says:

    I used the figures you gave for the savings of community processing: $333 per person per day, and it equalled over 1 billion. Are you sure the figure of $900,000 given in the article is correct? It seems miscalculated, but I may be missing something.

    ($333 * 365) * 8400

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  19. I think instead of helping people, it only creates another set of problems. The government must evaluate and check every possible loopholes in order to achieve the real solution to the problem.

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  21. Shaun says:

    A colossal waster of money on detention? Can you imagine how much money we would need to spend rounding up people in the community after it was found out their applications weren’t valid? And we’d have many if they knew it was that easy! They certainly wouldn’t want to go easy…. You assume people are all honesty and trustworthy. We do not live in a perfect world and this requires measures which are not always perfect I’m afraid. Sad to say it but we cannot support everyone in need. Our infrastructure and economy would not cope in providing the resources needed for the assimilation process to be successful. I’m all for charity but I don’t give everything I earn to charity otherwise I’d end up on the street requiring the help of the very charity I supported.

  22. Ben says:

    Illegal queue jumpers should not Force themselves onto countries . Most come from countries ruled by incompetent , corrupt regimes with whom the U.N should deal with, instead of dumping the problem onto nations like Australia. . The U.N is renowned for always being reactive to the problems after they occur, then dumping the problems conveniently onto individual nations. The U. N should be proactive and prevent this global exodus and make the countries responsible ,accountable in every aspect. The burden of Foreigners and Foreign Immigration not to mention wasted Aid Programs , is now far too heavy ,to maintain at current levels.

    • Apu says:

      So you think that if the U.N existed in the 1940’s they would have been able to stop Hitler’s massacre of Jews? Unfortunately the ‘U.N’ is only as powerful as its most powerful members which is mainly America. Also the U.N cant always be everywhere, all the time though it tries pretty hard. You’re absolutely right that the countries from where people are fleeing should be taken to task but its easier said than done isn’t it? Otherwise we would never have had any dictators or closed economies or human rights abuses. You are pretty fortunate that you can comment from the comforts of your home, unafraid for your life, but just imagine for a minute being persecuted for being who you are/ born in a certain way and having no option but to run away and seek refuge. You can only pray and be grateful that you are lucky enough to be safe, but you never know what can happen.

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