Offshore Detention: The Human and Financial Cost of Nauru and Manus Island

What Is Offshore Processing?

Since August 2013, Australia has operated a policy known as offshore processing - or more accurately, offshore detention. Under this arrangement, asylum seekers who arrive in Australia by boat are intercepted and transferred to detention facilities on Nauru (a tiny Pacific island nation) or, until its closure in 2021, Manus Island in Papua New Guinea.

The policy was reintroduced by the Rudd Labor government in its final weeks, then dramatically expanded by the Abbott Coalition government under Operation Sovereign Borders - a militarised border enforcement regime that added mandatory turnbacks of vessels at sea. Crucially, people processed offshore are permanently barred from ever settling in Australia, regardless of whether they are found to be genuine refugees.

Both major parties have defended and maintained versions of this policy across more than a decade. It is genuinely bipartisan - and that is a significant part of the problem.

The Financial Cost: What Are We Actually Spending?

The numbers are staggering, and they rarely get the scrutiny they deserve.

• Total estimated expenditure since 2012: Over $10 billion in direct costs, according to figures compiled by the Kaldor Centre for International Refugee Law at UNSW.
• Annual cost per detainee: At peak operations, Australia was spending approximately $400,000 per person per year on offshore detention - compared to roughly $10,000–$15,000 per year for community processing alternatives.
• The Nauru contract alone: In 2017, the Australian government signed a contract worth $1.89 billion with Broadspectrum (later acquired by Ferrovial) and Wilson Security to operate the Nauru facility.
• Legal settlements: The government paid a $70 million settlement in 2017 to approximately 1,900 former Manus Island detainees following a class action over their treatment.
• Medical transfers: The costs of the medevac system - where critically ill detainees were brought to Australia for treatment after years of delay - added further hundreds of millions to the bill.

To put this in perspective: community-based processing, where asylum seekers live in the community while their claims are assessed, costs a fraction of the price and produces better mental health outcomes. The Refugee Council of Australia estimates community detention costs around $25,000 per person per year - roughly 1/16th of the offshore model.

The Human Cost: What Happens to People There?

The evidence of harm is not disputed by serious researchers. It is documented by the Australian Human Rights Commission, the UN High Commissioner for Refugees, the Australian Medical Association, and independent journalists.

On Manus Island and Nauru, detainees experienced: - Prolonged indefinite detention - many held for 5 to 10 years without resolution - High rates of depression, PTSD, and suicidal ideation - a 2018 report found 88% of children on Nauru had diagnosable mental health conditions - Deaths in custody - including Reza Berati, beaten to death on Manus Island in 2014, and Hamid Kehazaei, who died from a treatable infection after delays in medical evacuation - Documented cases of sexual abuse, self-harm, and suicide attempts, detailed in the 2016 "Nauru Files" - over 2,000 leaked incident reports published by The Guardian - Children spending formative years in detention, with some born on Nauru who had never set foot in Australia or their parents' home country

The Australian Human Rights Commission's 2014 Forgotten Children report found that detention caused "serious harm" to children and that prolonged detention was a violation of Australia's international obligations under the UN Convention on the Rights of the Child.

Why Does the Policy Exist - And Who Benefits?

To understand why a policy this costly and damaging persists, you have to follow the incentives.

Politically, both major parties have concluded that being seen as "tough on borders" wins marginal seats - particularly in outer-suburban and regional areas where immigration is a salient issue. The political logic is crude but consistent: Labor fears being wedged on border security; the Coalition sees it as a core brand asset. Neither has been willing to blink first.

Commercially, offshore detention has been extraordinarily profitable for a small number of contractors:

These companies employ lobbyists, make political donations, and have every incentive to see the system continue. This is not a conspiracy - it is simply how entrenched policy ecosystems work.

Diplomatically, the "Pacific Solution" has been actively marketed by Australian governments to other nations as a model for deterrence. The UK government under Rishi Sunak explicitly cited Australia's offshore model when developing its (ultimately failed) Rwanda deportation scheme.

What Does the Evidence Actually Say About Deterrence?

The core justification for the policy is that it deters boat arrivals and prevents drownings at sea. This is a serious argument that deserves a serious response.

The evidence is genuinely mixed. Boat arrivals did drop sharply after 2013 - but so did global refugee movements to Australia via other routes, and Operation Sovereign Borders combined offshore processing with vessel turnbacks, making it impossible to isolate any single cause. Researchers at the Kaldor Centre and the Refugee Council argue that the combination of policies, not offshore processing alone, drove the reduction.

What is clear is that the policy did not eliminate the problem - it displaced it. Many of the people who would previously have sought asylum in Australia instead ended up in Malaysia, Indonesia, and other transit countries with far fewer protections. Others remained in dangerous situations in Iran, Afghanistan, and Sri Lanka.

The claim that the policy "saves lives at sea" sits uncomfortably alongside the documented deaths and suffering caused by the policy itself.

This Is What Happens When Politicians Decide Alone

Here is the core issue for anyone who cares about democratic accountability: this policy has never been put to the Australian people in any meaningful way.

Polling consistently shows that Australians are more nuanced on asylum seeker policy than the major parties assume. A 2019 Lowy Institute poll found that 68% of Australians believed asylum seekers who had been on Nauru or Manus for years should be allowed to settle in Australia. A 2021 survey found strong majority support for community processing over indefinite detention.

When people are given real information - actual costs, actual outcomes, actual alternatives - their views shift considerably. But they are never asked. Instead, they are presented with a false choice between two parties with nearly identical policies on this issue, and told that's democracy.

This is precisely the gap that Direct Democracy exists to fill. When members vote directly on policy, the results reflect genuine community values - not the risk calculations of party strategists or the interests of well-connected contractors. If Australians were given a real vote on whether to spend $400,000 per year per person on offshore detention, or to invest that money in fast, fair, community-based processing, the outcome would likely look very different from the status quo.

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