This report by a respected expert in her field suggests that the Howard government is wasting vast sums of money as well as being completely heartless when it comes to dealing with asylum seekers locked up in desert prisons.

Australia’s “Detention Centres” are managed by the Department of Immigration and Multicultural Affairs (DIMA). I have estimated that it costs DIMA $117 per day to house each person in the Detention Centre.

During a year there are between 3000 and 4000 people living in the Detention Centres. Assuming an average of 3,500 people, this comes to $150 million dollars per annum. Where does all the money go? Is $150 million the right cost to house 3,500 people for a year? Are there cheaper alternatives?

The cost of running the detention centres

I estimate that the total cost of housing a detainee for a day in a detention centre is $117. This is made up of an estimate DIMA has given to the Senate of $104 for direct costs plus a loading for indirect costs.

Wackenhut payment: The US private prison manager gets $77 per day per inmate. DIMA costs: estimated $27 a day for managing contract and other staff. Total direct costs: $104 as per Government Senate statement. Indirect costs: capital loading for land and buildings costs $13 a day. Total daily cost per man, woman and child: $117

Each of these components are discussed fully below.

Wackenhut payment

The detention manager Australian Correctional Management Pty Ltd – is a subsidiary of Wackenhut Correctional Services, a US private prison manager. This is an indirect relationship, obscured through countless layers of holding companies. DIMA is at pains to keep the manager’s real identity secret. This is probably because Wackenhut are experiencing many law suits in the US for both their failure to meet contracts and for deaths in detention of their prison “clients” .

Wackenhut however are not so shy about the relationship with DIMA. Wackenhut’s 2000 SEC filings state that DIMA is their third largest client globally. The Wackenhut report says that in the year to December 2000 DIMA paid Wackenhut $98 million dollars. While DIMA have downplayed and even denied Wackenhut’s involvement with the detention centres, it is clear from the Wackenhut filings and annual reports that their relationship with DIMA is extremely important and they are very anxious to both increase numbers in the Detention Centres and to increase their profit margin on the relationship. At present the profit margin appears to be around $8.5 million i.e the US company makes over $8 million dollars profit for running the detention centres.

Appendix One gives a comprehensive derivation of the Wackenhut payment, as well as a derivation of the profit margin.

By dividing the Wackenhut payment of $98 million by the average number of people we get the per person daily cost of $77. As expected most of DIMA’s cost figure of $104 goes to Wackenhut, who provide security at all DIMA detention facilities, provision of accommodation (excluding the cost of the buildings, which is an indirect DIMA cost covered below), maintenance, catering, heath care and medical/ dental treatment, educational and recreational facilities, welfare and counselling.

DIMA costs

There is also a cost to DIMA in overseeing the Detention Centres, ensuring compliance with the contract, running the Detention Task Force and dealing with issues such as the riots and fires at Woomera and so on. PR alone must be enormous, dealing with the Australian and foreign press, human rights groups and the United Nations’ criticisms of the Centres. We have estimated the $27 per day DIMA cost as the balancing item to reach DIMA’s estimate given to the Senate of $104 per person per day.

Indirect costs

While most government departments are selling buildings and lands, DIMA is buying and building more to house the detainees. In the year to Jun 2001 DIMA spent $17 million on land purchase and building costs, after spending $16 million in 2000 . As of May 2000, the Government allocated a further $52.1 million to be spent over four years in building new Detention Centres in Darwin and Brisbane. This gives an average additional expenditure of $13 million per year.

These assets are highly specialised, in “remote” locations and suitable only as high security prisons or other such institutions. They are probably very illiquid and difficult to sell. The capital cost of the Detention Centres is carried as an asset in DIMA’s accounts and slowly amortised. Therefore the cost is not shown as a direct cost to the Australia tax payer. In reality however the centres are unnecessary expenditure and not creating a saleable asset. In our calculations, we have therefore included a daily loading of $13 per day (equivalent to $17 million per year, the current spending rate) in assessing the true cost of the Detention Centres.

Are there cheaper alternatives?

A single Australian who is unable to work because he/she is disabled or cannot find a job is paid about $250 a week (which includes a rental allowance), or $200 for those with free accommodation available. Extra is paid for children and families, but the additional child or spouse obviously receives less than $250 each. This maximum payment of $250 per week is equivalent to $36 a day.

If Australia were to allow its asylum seekers to live in the community, and pay them the single persons disability allowance, the daily cost would reduce to $63. This is shown below.

Weekly living allowance: $36 a day would be paid as a disability benefit paid to every detainee.

DIMA costs: $27 a day to manage the contract and other DIMA staff.

Total costs: average daily cost per man, woman or child is $63

This number of $63 is overstated as it assumes that all the people living in Detention Centres are single adults. In fact, many are children and families, so the true cost would be much lower. It also assumes that DIMA costs are unchanged while there would be more cost in managing individual families, the cost savings in not running the outsource provider and the reduction in the cost of “incidents” such as damage to Woomera (which the Commonwealth normally bears, not Wackenhut) would be enormous.

But what about the cost of abscondees? Suppose that those 15% of asylum seekers who are not ultimately granted asylum here escape to the community where they live out their days without being caught. These people’s benefit would be terminated and, as Julian Burnside has noted “If they manage to stay out of the Government’s way, it probably means they are living law-abiding lives”.

$63 a day is equivalent to $80 million each year. By letting people live in the community, we have saved the Australian tax payer seventy million dollars each year. Other papers have dealt with the legal and ethical aspects of the detention centres.


21 January 2002