The report released by the Commission of Audit (COA) last week reveals the unnecessarily high cost of asylum seeker policies in Australia. The report shows that offshore detention costs approximately $439,000 per person per year, or about $1,200 per day. Onshore detention costs an estimated $239,000 or $655 per day. For 2013-14, total expenditure is likely to be in the order of $3.3 billion. We looked at the data and have identified potential savings of $384 million to $726 million missed by the COA.
Beyond reductions in arrivals and consequently, the number of people in detention, here’s how the COA suggests costs could be reduced:
Savings would primarily be achieved by renegotiating contracts and, in some cases, reductions in the services provided to people in detention.
In order to determine the appropriate level of services it may be necessary to conduct an audit of the scope and the cost of services currently being provided and how these have changed over time. This could include reviewing the roles of departmental staff and service providers with a view to removing duplication as well as ensuring that support provided was targeted effectively.
In-case you missed that. They are basically suggesting three options for savings:
- Renegotiating what are probably very lucrative contracts for Serco and other service providers.
- Reductions in the services provided to people in detention.
- Cuts to government departments where duplications exists (a recurring theme in the COA report)
On point number 1, I wholeheartedly agree, as I’ve argued previously, in-community processing of asylum seekers would distribute the benefits of government spending more broadly than contracts to a few service providers will.
On the reduction of services provided to people in detention. I respond with the picture below of the detention facilities on Nauru, where 665 men, 313 women and 179 children are currently held:
On cuts to government departments “where duplication exists”, I find this whole idea of duplication baffling. It’s a kind of intuitively appealing argument until you realise that there is always duplication to some extent. And so while chasing the duplication bogeyman would lead to some efficiency gains, it’s hardly the elephant in the room here. Especially when the COA has acknowledged that the rapid increase in arrivals led to strained departmental resources:
If these trends continue [in reduced arrivals], the Department of Immigration and Border Protection should be able to redirect its efforts away from constantly managing crises and focus achieving better value for money across the network.
Like so much else the COA has suggested, their suggestions for savings from spending on “illegal maritime arrivals” are utterly lacking in genuine analysis of policy options.
Doing what they failed to do, here are the genuine cost-saving options I see given the data presented by the COA.
- Cease offshore detention and processing and return to 100% onshore processing of claims.
- Reduce the time for processing
Ceasing offshore detention would immediately save between $223 million and $400 million based on the approximately 4500 people currently in detention, 1961 of whom are held in offshore detention facilities on Nauru and PNG.
Estimating the savings from reduced processing times is more difficult but assuming that 70% of people were processed in between 92 to 182 days rather than the current rate of between 183 to 365 days, we would find another $162 million to $342 million in savings.
In total, we can save between $384 million and $726 million by simply returning to onshore processing and reducing processing times. Now obviously this is just a simple piece of analysis looking at the number of people in detention as of March 2014, but it demonstrates that it’s pretty easy to save money in this area. These options have been entirely ignored by the COA due the ideological leanings of those who initiated and produced it, to the detriment of asylum seekers and Australian tax payers.
Here’s my data file if you want to check it out. Let me know if you spot any errors and I’ll amend.