Exclusive: Taxpayer cost of offshore processing regime revealed as government remains silent on where $400m went.
The cost to Australian taxpayers to hold a single refugee on Nauru has escalated tenfold to more than $350,000 every month – or $4.3m a year – as the government refuses to reveal where nearly $400m spent on offshore processing on the island has gone.
Australia currently pays about $40m a month to run its offshore processing regime on Nauru, an amount almost identical to 2016 when there were nearly 10 times as many people held on the island.
No refugees and asylum seekers have been sent to Nauru since 2014, and with numbers of refugees held there dwindling – through resettlement to the US, transfer to Australia for acute medical care, abandonment of a protection claim, or death – the cost to Australia to hold each person has increased dramatically.
In May 2016, Australia held 1,193 people on Nauru at a cost of $45,347 a month per person – about $1,460 a day or $534,000 a year.
By August 2021, the number of asylum seekers and refugees held on the island had fallen nearly tenfold, but the costs of running the offshore program remained broadly static. In that month, there were 107 refugees and asylum seekers on Nauru at a cost to taxpayers of $464,486 a month for each person, or more than $15,000 a day.
The average monthly cost in 2021 is $358,646 for every refugee and asylum seeker held on the island, equal to $4.3m per person each year, a Guardian Australia analysis of government figures provided to the Senate shows.
The majority – 78 of those people – are refugees whose claims for protection have been formally recognised and Australia is legally obliged to protect them. Others are still awaiting a final refugee status determination, or have had their claim rejected.
There are no women, children or family groups remaining among those held by Australia on Nauru. There are only single men, meaning services around maternal health, infant healthcare and childhood education are no longer being provided.
A spokesperson for the Department of Home Affairs told the Guardian that “regional processing in Nauru remains a key pillar of Operation Sovereign Borders”.
“Costs associated with regional processing have saved lives at sea, by providing ongoing deterrence against illegal maritime people smuggling.”
But Labor argues Australia’s spending on Nauru is opaque.
The government has declined to tell the Senate to whom it has paid nearly $400m to help run the regime on Nauru.
Responses to Senate questions on notice show that from November 2017 to January 2021, the Australian government spent more than $1.67bn on “garrison and welfare” for those held on the island.
The vast majority of that – nearly $1.3bn – was paid to its three “primary entities”: construction and facilities management firm Canstruct International; healthcare provider International Health and Medical Services (IHMS); and the government of Nauru.
Canstruct was paid a little over $1bn to provide garrison and welfare services; IHMS received $138.3m to provide healthcare; and the Nauru government was paid $73.3m.
The total cost to the three “primary entities” identified by the department was $1,272,681,862.
But Australia’s total payments for garrison and welfare services on Nauru were $1,671,500,000, according to government figures, with an additional $398,818,138 paid to other individuals, organisations, or governments.
Under questioning from Labor in the Senate, the department said it would not provide details on to whom that additional money was paid.
“Payment data subsequently recorded in the Department’s Financial Management Information System is not disaggregated … and the manual intervention required to identify this level of detail constitutes an unreasonable diversion of resources.”
Senator Kristina Keneally, the shadow minister for home affairs, said Scott Morrison’s government had serious questions to answer over the escalating costs of offshore processing on Nauru.
“This is yet another example of Mr Morrison using taxpayers money as if it was Liberal Party money.”
Keneally said the government’s response to the Senate that payments could not be detailed publicly was inadequate, arguing the Australian people “absolutely have a right to know how it has been spent”.
“We are not talking about a missing tin of petty cash. This is $400m. Where did it go? Has it gone into the pockets of Liberal mates? Has it been lost?
“The Morrison government either doesn’t know what has happened to this $400m or it doesn’t want Australians to know.”
The Department of Home Affairs told the Guardian “the questions on notice seek different types of information, and as such are not directly comparable”.
“The figures provided in response to various questions reflect payments made to suppliers on a cash basis with total expenditure accounted for on an accrual basis. As a result, the figures will not neatly total or realise month-to-month consistency.”
The Guardian understands the “total” costs figure for Nauru captures all expenses related to regional processing there, including ancillary costs such as government administration, transport, road maintenance, utilities, staff accommodation, land leases, staffing costs and legal services.
Canstruct contract scrutinised
Canstruct’s large and growing contract – now worth nearly $1.6bn – to run the Nauru facility has attracted particular scrutiny.
The Brisbane company, which is a Liberal party donor, helped build the Nauru detention centre, and started running the offshore regime on the island in late 2017.
The original contract awarded to Canstruct for services on Nauru was worth just $8m in October 2017. But this was amended almost immediately, increased by 4,500% to $385m just a month after being signed.
Since then, seven further amendments have escalated the cost to taxpayers to $1,598,230,689 a total increase of more than 19,300%, government tender documents show.
The eighth and latest amendment to the contract was published this month, with another $179m to continue operating on the island until the end of 2021.
The contract was awarded under limited tender, with “no submissions or value for money submissions received”, government tender documents show.
Canstruct, or individuals or entities associated with it, has made at least 11 donations to the Coalition since 2017, according to state electoral disclosures. The company has previously strenuously denied any link between political donations and the awarding of any contracts.
Asked about Canstruct’s Nauru operations, a spokesperson for the company said: “Unfortunately we are unable to comment on these matters. Please direct any questions to the federal government.”
In September, the Australian government signed an agreement with the government of Nauru for an “enduring” offshore processing regime on the island.
Australia’s offshore processing arrangement with Papua New Guinea will end on 31 December this year. In 2017, Australia’s detention centre on PNG’s Manus Island was ruled unconstitutional and the detention of people there illegal. Australia was required to pay more than $70m in compensation.
