The economic cost of Australia’s asylum policies

By Asher Hirsch | 21 Aug 15

Australia’s asylum policies are not just inhumane, cruel and a violation of international law, they are also ridiculously expensive.

An analysis of last year’s budget found that in the 2014-15 financial year, the Australian Government spent $2.91 billion on detention and compliance-related programs for asylum seekers who arrived in Australia by boat. This includes $912 million spent on detaining people in unsanitary, cramped and deadly offshore detention centres.

The most recent statistics, released in May 2015, show that there are 634 people in Nauru (including 81 children) and 943 on Manus Island. A 2014 Commission of Audit found that the costs for holding people in these remote centres – where women and children risk abuse and two people have died – is over $400,000 per person annually.

It would be cheaper to put each person in a luxury Gold Coast hotel – not to mention safer.

In order to convince Papua New Guinea (PNG) and Nauru to host these detention centres, Australia has also given significant aid packages to these countries, including $420 million to PNG.

And don’t forget the $55 million deal made with Cambodia to resettle just four refugees.

We are also spending over $100 million on regional deterrence programs, which are designed to “detect and disrupt irregular movements of people from source and transit countries”. These programs involve working with law enforcement in Sri Lanka, Indonesia and Malaysia to intercept asylum seekers in countries of first asylum, making it harder for people to flee from persecution in their homeland.

The costs of detaining asylum seekers within Australia are also outrageous. In 2014-15 Australia spent $1.99 billion towards the 33,000 asylum seekers in Australia currently detained or in the community awaiting the outcome of their asylum claim. The 2014 Commission of Audit found the cost of onshore detention centres per person was $239,000 a year.

To put Australia’s spending in perspective, the total expenditure for the United Nations High Commissioner for Refugees (UNHCR) in 2014 was AUD$3.72 billion.

Australia is spending more on detaining and deterring a few thousand asylum seekers than the UNHCR spends on supporting around 46.3 million refugees, internally displaced and stateless people around the world.

Loss of potential economic benefits

Many people who are in the community on bridging visas and are awaiting processing of their refugee claim are denied work rights. While a deal was made late last year with crossbenchers to grant work rights to asylum seekers in the community in return for passing the Asylum Legacy Caseload Bill, the process of granting work rights is taking an unnecessarily long time.

Denied the right to work, asylum seekers are forced to rely on 89 per cent of the Centrelink Special Benefits rate – $462 a fortnight, or $33 per day. This rate is well below the poverty line and forces people into destitution.

Australia’s asylum policies also prevent future economic opportunities. Studies show that refugees make substantial contributions to their new countries – they expand consumer markets for local goods, open new markets, bring in new skills, create employment and fill empty employment niches.

The success of former refugees shows that the experience of losing everything can foster an even stronger will to succeed, and this drive has the potential to substantially contribute to growing Australia’s economy.

The late Graeme Hugo’s comprehensive study on the Economic, Social and Civic Contributions of First and Second Generation Humanitarian Entrants noted that former refugees are often entrepreneurial. Compared to other migrant groups, they are more likely to set up their own businesses and their children are more likely than the children of Australian-born parents to obtain tertiary qualifications, to be professionals or managers, and to own their own home — all activities known to positively impact Australia’s economy.

Likewise, a recent report by AMES and Deloitte Access Economics found that the resettlement of 160 Karen refugees from Burma in the small town of Nhill in regional Victoria contributed $41.49 million to the local economy.

Why do we deter and detain would-be refugees when we could allow them to contribute to our economy instead?

What are the alternatives?

The alternatives to these wasteful policies are clear: abolish offshore detention, return all asylum seekers to Australia, put legislative time limits on detention and allow people to live and work in the community while their claims are being processed.

It costs around $40,000 per year  for an asylum seeker to live in the community on a bridging visa, which is 90 per cent cheaper than the exorbitant $400,000 it costs to lock them in offshore detention centres. And if asylum seekers are supported to find sustainable work, this could positively impact our economy as well.

It is important to recognise that our taxpayer dollars are being used to systematically abuse and torment asylum seekers. Not only are we ethically compelled to find humane alternatives, it also makes simple economic sense. 

Asher Hirsch is a Policy Officer with the Refugee Council of Australia, the national peak body representing 200 organisations & thousands of individuals who work with and for refugees & asylum seekers.

Feature image: Manus Island Detention Centre/Greens MPs/Flickr