Friday, September 23, 2016

Australian Immigration Detention - The Cost

The conservative cost to run Australia’s immigration detention centres has been $9.2 billion in the past three years, and  between $3.9 billion to $5.5 billion for the next four. The cost per offshore detainee: is $573,100 per year. For that price – $1570 per day – they could put them up in a Hyatt and pay them the pension 15 times over.  

UNICEF and Save the Children get the $9.2 billion figure in their report ‘At What Cost?’ from the numbers scattered around various parts of the official record. They say there are less specific other costs they haven't included, among them regular independent and senate inquiries, the defence of High Court challenges, and compensation for detention centre employees who have suffered as a result of what they have been exposed to.

The $573,100 isn't being paid in return for a detainee's labour, in return for a contribution to society, as are wages. It is being paid to prevent the detainee contributing to society. It is what economists call a deadweight loss.

The Audit Office says the department breached public service guidelines by not conducting proper tenders for the contracts to provide services to Manus Island and Nauru, at times falsely claiming it faced urgent and unforeseen circumstances. "The available record does not indicate that urgent or unforeseen circumstances existed," the Audit Office says. "The record suggests that the department first selected the provider and then commenced a process to determine the exact nature, scope and price of the services to be delivered." The department's approach to selecting one provider to service both centres from 2014 "removed competition from the outset". There is no record of staff completing conflict-of-interest declarations, no record of the checks that would have discovered that a director of one of the subcontractors had faced bribery charges and was later acquitted. After being selected without a proper tender, the new provider extracted an extra $1.1 billion from Australian taxpayers, which was agreed to without going back to the contractors who had just been sacked. The price per detainee shot up from $201,000 to $573,100.

And there's a whole other set of costs, which At What Cost wrongly labels non-economic, hidden from the public by gag clauses: self-harm, suicide attempts and mental deterioration, especially among children. Economists would say they destroy human capital. Adam Smith, the father of modern economics, titled his magnum opus An Inquiry into the Nature and Causes of the Wealth of Nations because he had discovered that that's what gave nations wealth – not gold or notes or coins, but human beings who could provide goods and services. Deliberately or carelessly deprecating human capital is perhaps the worst crime against humanity. The Commonwealth Treasury thinks so. Chief among the goals in its wellbeing framework is giving people "substantive freedom to lead a life they have reason to value".




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