Costs associated with the detention and processing of irregular maritime arrivals (IMAs) have been a hot topic in both public and political debate in recent years, with budgeted expenditure increasing exponentially, from $304.3 million in 2009–10 to over $3 billion in 2013–14. One of the Coalition’s key election promises was to ‘stop the boats’ and, as a consequence, put a stop to what it described as a ‘budget blowout’ in this area. The Budget appears to have delivered on this promise, with the Government announcing that it will reduce spending on IMAs by $2.5 billion over the forward estimates, and save more than $280 million by closing a total of nine immigration detention facilities. There have been no IMAs transferred to immigration authorities since December 2013, although several vessels have been intercepted and turned back to Indonesia.
In 2014–15, the Department of Immigration and Border Protection’s outcomes and programs have been restructured, making a year to year comparison of funding more difficult than in previous years. Previously, all spending on IMAs, whether they were in Australia or transferred offshore, was contained in a single program (Program 4.3). In 2014–15 the same funding has been divided across four programs, two each (one departmental funding and one administered) for managing IMAs onshore (in Australia), and managing them offshore (in Regional Processing Countries). When looked at together, total spending on IMAs, both onshore and offshore, is expected to decline from $3.1 billion in 2013–14 to $2.7 billion in 2014–15, with even more significant reductions anticipated over the forward estimates. By 2017–18 the Government expects spending on IMAs to come down to $1 billion, which is the level it was at in 2011–12.
It is interesting to note that the majority of funding for IMAs is budgeted to be spent onshore, rather than offshore–$1.5 billion onshore in 2014–15 compared to $826.7 million offshore. This is despite the fact that offshore processing is more expensive on a per person basis than onshore detention and processing. The higher level of spending on onshore IMAs likely reflects the fact that there are substantially more IMAs in Australia than there are at offshore processing centres, including some 30,000 who arrived prior to the introduction of offshore processing and who are not subject to transfer offshore. Some funding has been specifically allocated to manage this caseload of people—$149.9 million over five years for reforms to compliance and removal capability, and $574.1 million over five years for support services and mutual obligation arrangements.
However, even by 2017–18 the Government anticipates spending more on onshore IMA management than it does on offshore IMA management—$649.9 million compared to $389.8 million. Under the terms of the agreements with Nauru and Papua New Guinea for the transfer and settlement of asylum seekers to those countries, the Australian Government will be responsible for assisting those countries with the costs of settling successful asylum seekers. It might therefore be expected that the costs of offshore IMA management would be higher than those of onshore IMA management into the future, given that the onshore numbers are expected to decline (as more people are either processed out of the onshore network or transferred offshore, and new arrivals are expected to remain at zero).
Also of interest is that, while the Government has claimed success in stopping the boats, it appears to be envisaging the continued presence of asylum seekers on Christmas Island into the near future, as it is planning on spending $217.6 million over five years to upgrade essential infrastructure on Christmas Island to support the transfer of asylum seekers to regional processing centres within 48 hours. This measure will also include funding for health infrastructure to reduce the need to transfer people to the mainland for the assessment and treatment of health issues. A total of $2.6 million will also be spent in 2014–15 to fund access to full time school education for asylum seeker children on Christmas Island.
While the savings announced in this Budget are largely the result of the dramatic reduction in IMAs, with no further arrivals anticipated, some savings—$77.5 million over five years—will also be achieved by renegotiating and consolidating contacts with service providers at offshore processing centres. The Government’s desire to reduce the cost of offshore processing in this way is understandable, as offshore processing is expensive. The report of the Commission of Audit found that the annual cost of detaining a person in an offshore processing centre was around twice that of holding a person in detention onshore, and more than three times the cost of community detention. While the Commission made no recommendations in relation to offshore detention and processing, it did suggest that savings could be made in the onshore detention network by renegotiating and consolidating contracts with service providers, and ‘in some cases, reduction in services to people in detention.’ While it has not been made explicit, it is possible that the renegotiation of contracts with service providers in offshore detention centres will include some reduction in the level of service provided to the people held in those centres, which could have potentially significant consequences for both asylum seekers and staff.
The past several years have shown that predicting expenditure on IMAs is notoriously difficult, as numbers of arrivals fluctuate, and new policy measures in detention and processing arrangements have had significant budgetary impacts. The Coalition promised it would massively reduce costs in this area, which it appears to have done in its first budget. It remains to be seen whether it can continue to keep costs down in this difficult, expensive and often unpredictable policy area.
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