The detention and processing of Illegal Maritime Arrivals (IMAs) has been the fastest growing government programme over recent years. Between 2009-10 and 2013-14 annual expenditure has increased from $118.4 million to $3.3 billion, growing at 129 per cent per year.
Projected costs over the forward estimates currently exceed $10 billion.
While the growth in expenditure is largely due to an increase in arrival rates, there has also been a material increase in costs associated with running the immigration detention network. For example, estimates of the annual cost of holding one IMA in onshore detention have increased from $179,000 in 2011-12 to $239,000 in 2013-14.
To a significant extent this growth in costs has been due to increases in the scope of services provided under the contracts the Department of Immigration and Border Protection has in place with service providers, as well as increases in workload demands on the Department and subsequent increases in staffing levels.
The costs incurred in the delivery of this programme depend on a range of complex factors, with the major cost driver being the number of people in immigration detention, community detention or living in the community on bridging visas. This in turn is influenced by the number of IMAs, average processing times and other policy settings. Chart 10.14.1 illustrates the relative cost for each detention option.
Source: Department of Finance.
The detention and processing arrangements were necessarily developed in an ad hoc fashion in response to a number of crises (including significant overcrowding, riots, fires and growing incidences of self harm) and a rapidly changing policy environment. The Australian National Audit Office (2013) commented that ‘immigration detention is one of the most complex, controversial and debated areas of government policy’.
While it is unsurprising that costs have grown substantially in the face of such circumstances, there is scope to improve efficiency and eliminate waste and to ensure that decision making recognises the need to secure cost effective outcomes.
The policy settings now in place appear to have been effective in reducing arrival rates. Arrivals have fallen from a peak of around 4,300 per month in July 2013 to around 200 per month by November 2013. If these trends continue, 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.
Notwithstanding the recent announcement of the closure of four detention centres, the cost of operating the onshore immigration network could be further wound back to 2011‑12 levels (approximately $179,000 per person). 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.
Should the policy settings continue to be successful in reducing arrival rates, further savings could be generated through the consolidation of the immigration detention network to achieve economies of scale – in particular through closing smaller, inefficient centres.
Australian Government 2012, Report of the Expert Panel on Asylum Seekers (Houston Review), Canberra.
Australian National Audit Office 2013, Individual Management Services Provided to People in Detention, Audit Report no. 21 2012-13, Canberra.
Department of Immigration and Border Protection 2013, Asylum Trends Australia: 2012-13 Annual Publication, Canberra.
Department of Immigration and Citizenship 2013, Annual Report, Canberra.
Department of Immigration and Citizenship 2013, Portfolio Budget Statements, Canberra.