Will the new Government continue to spend overseas aid money on Australia’s own asylum seeker policies?

Since late 2012, Australia’s overseas aid program has allocated almost $1 billion toward the costs of Australia’s asylum seeker management regime. The Coalition, when in opposition, stridently opposed the use of overseas aid to meet asylum seeker costs within Australia – calling it “outrageous” and “inappropriate”. In office, will they cease this practice? More importantly, what will be their policy on offshore costs?

Getting answers to these questions, particularly the latter, is not merely important from an aid policy perspective. Certainly, using aid to offset asylum seeker costs is regarded by many people as an abuse – but that is not the worst of it. The very availability of overseas aid for this purpose creates incentives to handle asylum seekers in ways that reduce their welfare, security and visibility, and erode their human rights.

OECD donor countries have agreed, not uncontroversially, to count as overseas aid most costs incurred within their borders in providing support for refugees (where this term is taken to include asylum seekers) from developing countries, for up to a year after their arrival. Australia, like several other donor countries, has generally chosen not to do this. But in December 2012 the then Labor Government abruptly announced the reallocation of $375 million within the aid budget to offset “basic subsistence” costs associated with asylum seekers living in the Australian community, mostly under community detention arrangements, and awaiting determination of their status. Labor did the same again, with the same amount, in the May 2012 budget.

Then, in its August 2013 economic statement, Labor allocated $236 million over four years to meet potential costs associated with “unauthorised maritime arrivals living in community-based arrangements” in Papua New Guinea. While it was implied this was for refugee resettlement costs, it is obvious there would be very few, if any, cases of resettlement in PNG within that timeframe. So, in reality, this was the first case in which a government had made provision within the aid program to pay for offshore community detention, on the analogy of the move already made the previous December in connection with onshore costs. The Coalition made no comment.

It is unfortunate, if neither surprising nor novel, that Australia’s general aid relationship with neighbouring countries is sometimes distorted by our desire to have them do something for us. Papua New Guinea and Nauru, in particular, have benefited substantially from their willingness to act as service providers in the business of offshore asylum seeker management. They have got more aid, and more control over that aid, than they would otherwise have had. There were almost certainly better uses for the additional aid, and Australia’s reliance on these countries as service providers greatly weakens our position in aid-related policy dialogue on social and economic policy matters. However, these are general points which would hold in connection with any case where aid is used to turn an Australian problem into a matter of mutual interest between us and our neighbours.

There are two more specific and quite important problems with the use of aid to meet offshore costs involved in community detention arrangements.

First, it is far from self-evident that such costs meet the fundamental test of aid eligibility. What counts as aid is determined by agreement among the member countries of the OECD’s Development Assistance Committee. Under OECD rules established in the 1960s, aid is intended to “promote the economic development and welfare of developing countries”. Under a subsequent interpretation of those rules, onshore asylum seeker costs are deemed to be of a piece with humanitarian support to refugee populations in developing countries, and thus eligible. Without pausing to argue with that determination, consider the offshore case. Here an asylum seeker has been taken into custody by Australian authorities and involuntarily transferred to a third country whose role is to provide detention and processing services to Australia under a bilateral agreement. Even where asylum seekers are not held in institutional detention in those countries, there is no sense in which the costs of their upkeep can be compared to assistance to refugee populations. They are there because we put them there, and we put them there to deter further arrivals. The OECD has at no point considered or ruled as eligible the use of aid for this purpose and in fact would be highly unlikely to do so.

Second, and more importantly, even if offshore community detention costs were an eligible and appropriate charge to aid budgets, the availability of aid for this purpose would be likely to create a perverse incentive to push people offshore and out of institutional detention into poorly-defined community detention arrangements. For the Coalition, the incentive to hold asylum seekers offshore arises from the fact that they have opposed the use of aid to meet onshore costs, though of course offshore processing is already strongly preferred for its deterrent effect. Once offshore, asylum seekers must be moved out of institutional detention into something badged as “community detention” if costs associated with their upkeep are, on the analogy of what currently happens in Australia, to be charged to the aid program. Clearly, moving them into the community – particularly into a remote community in Papua New Guinea – is likely to generate or aggravate local tensions and conflicts and possibly lead to a reduction in the level of basic social services available to them, as well as reducing their visibility and accessibility to monitoring bodies.

The government has quite a few aid policy decisions to make at present. Given its ongoing commitment to offshore processing, it no longer matters greatly what the Coalition’s policy is on the use of aid for onshore asylum seeker costs – though logically it would return to the beleaguered aid program any funds allocated for this purpose by Labor and not yet spent. The real question is what the Coalition government will do offshore.

Any use of aid to pay for something labelled as a community detention regime offshore would be highly questionable from an OECD perspective, even if Labor had appeared to be moving in that direction. And if the government were to move people into murky arrangements outside institutional detention for no other reason than to be able to charge the aid program for their costs, this could have serious consequences for both the people concerned and for the government’s international standing.

Robin Davies is Associate Director of the Development Policy Centre at the Australian National University.