$579M Settlement Program: The Audit That Found 94% of Incidents Unreported

Half a billion dollars. Nearly six years. And 94 per cent of the critical incidents - including deaths - in a government program designed to protect vulnerable people were not reported.

That is the finding of the Australian National Audit Office, in a report tabled on 1 April 2026. (Source: ANAO, Auditor-General Report No. 28, 2025-26)

What the ANAO found

The audit examined the Settlement Engagement and Transition Support program. SETS. It is designed to help refugees and humanitarian entrants settle into life in Australia. Housing support, language services, community connection. Delivered by 129 service providers across 651 outlets to 192,618 clients. (Source: ANAO, Report No. 28, 2025-26)

94 per cent of critical incidents went unreported between 2019 and 2025. That includes circumstances where SETS clients died. The report states: “94 per cent of critical incidents are not reported to Home Affairs, including circumstances where SETS clients have died.” (Source: ANAO, Report No. 28, 2025-26, paragraph 11)

Round 2 grant agreements did not include a requirement to report critical incidents. The department “has given insufficient weight to the insights that can come from a robust approach to critical incident reporting, instead focussing on reputational risks.” The department prioritised its own reputation over reporting incidents where people died. (Source: ANAO, Report No. 28, 2025-26)

The Department of Home Affairs could not demonstrate value for money across the program’s entire existence. The ANAO found that value for money “was not appropriately addressed in considering and approving grant agreement variations.” (Source: ANAO, Report No. 28, 2025-26, paragraph 17)

Eighty per cent of performance reports submitted by grant recipients were incomplete or revealed service delivery problems. More than half of planned assurance visits to providers never happened. (Source: ANAO, Report No. 28, 2025-26)

The ANAO made ten recommendations. All accepted by Home Affairs and the Department of Social Services. (Source: ANAO, Report No. 28, 2025-26)

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The bigger picture: contract costs and connections

SETS is one part of a much larger immigration infrastructure. Australia has spent more than $13 billion on offshore processing since 2012. The ASRC’s July 2025 analysis, drawing on federal budget papers and departmental annual reports, puts the cumulative figure at over $13 billion across twelve years. The Refugee Council of Australia independently confirmed at least $12 billion through June 2024. (Source: ASRC, July 2025; Refugee Council of Australia)

Several major contracts were awarded through limited or non-competitive tender processes.

MTC Australia now runs detention services on Nauru. Its parent company, US-based Management and Training Corporation, won the contract through limited tender in September 2022. Initially $47 million for two months. By October 2025, the contract had grown to $787 million through repeated amendments. That is more than 16 times the original value. No open tender. No public competition. Roughly $1.5 million per person per year for about 105 people. (Source: Guardian Australia, September 2025; AusTender contract CN3918654)

Before MTC, Brisbane-based Canstruct held the Nauru contract. Canstruct is owned by the Murphy family. The contract grew from $8 million to $1.82 billion over five years through nine limited-competition amendments. According to Guardian Australia, the Murphy family went from $8 million net worth to $340 million in cash and investments. Eleven LNP donations were documented during the contract period. (Source: Guardian Australia, February 2022; Crikey, August 2023)

The Centre for Public Integrity’s chair, former NSW Supreme Court judge Anthony Whealy, stated: “When the contract price multiplies over years to billions of dollars without a proper tender process, the outcome is deeply disturbing. Add to this the fact that the recipient is a political donor, then the outcome is an outright scandal.” (Source: Centre for Public Integrity, July 2021)

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A decade of deferred reform

The Productivity Commission examined Australia’s migration system in 2016. Report No. 77, “Migrant Intake into Australia,” was sent to government on 13 April 2016 and publicly released on 12 September 2016. It covered migration intake broadly. Skilled migration, family reunion, settlement services. Not detention specifically. (Source: Productivity Commission, Report No. 77, 2016)

As of 2026, ten years later, there has been no formal government response. Not from Turnbull. Not from Morrison. Not from Albanese. The Commission is the government’s own independent advisory body. Its findings have not been formally addressed by either major party. (Source: pc.gov.au)

The Australian Human Rights Commission’s 2014 report, “The Forgotten Children,” recommended time limits on detention of children, increased transparency, and independent oversight. (Source: AHRC, “The Forgotten Children,” 2014)

A decade later, the system has grown. More money. More contracts. More people processed. The SETS audit is the latest in a series of reviews identifying gaps in oversight and accountability.

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Follow the money

Property developers have donated $368 million to political parties between 1998 and 2023, according to the Democracy for Sale archive analysis of 94,233 AEC donation records. They are the fourth largest donor industry in Australian politics. (Source: Democracy for Sale archive, AEC donation data 1998-2023; Centre for Public Integrity)

Meriton alone has donated $3.16 million, with 70 per cent flowing to Liberal/National. The Property Council of Australia has called for higher immigration to support housing demand in its policy submissions. (Source: Democracy for Sale archive; Property Council of Australia)

The data shows a correlation between property developer donations and immigration policy settings. High immigration drives population growth. Population growth drives housing demand. Property developers donate to the parties setting immigration levels. Whether donations cause specific policy outcomes has not been established.

Then there are the contracts. Serco received $3.7 billion for onshore immigration detention services from 2014 to 2025. (Source: AusTender, contract CN2748471) Secure Journeys, an MTC subsidiary, won a $2.3 billion five-year contract for onshore detention in December 2024. (Source: Guardian Australia, December 2024) Healthcare Australia landed $866 million for detention health services. (Source: AusTender, contract CN4103848) Paladin Group received $532 million for Manus Island through a sole-source contract with no open tender, paying workers $2-3 per hour, according to Guardian Australia. (Source: ANAO, 2020; Guardian Australia, February 2019)

These are matters of public record.

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The other side

SETS served 192,618 clients across 129 providers operating at 651 outlets. That scale creates genuine oversight challenges. Managing hundreds of service providers delivering care to nearly 200,000 people is complex, and gaps in reporting systems can reflect structural strain rather than deliberate concealment.

The ANAO report is also the accountability system working as designed. An independent auditor identified problems, documented them publicly, and made recommendations. Home Affairs and the Department of Social Services accepted all ten recommendations. Reform is now underway.

Offshore processing costs are driven by policy decisions that have bipartisan support. Both major parties have maintained offshore detention since 2012. Contractor costs reflect those policy choices, not contractor profiteering alone.

The connection between property developer donations and immigration levels is correlation, not proven causation. Population growth has many drivers: skilled migration targets, family reunion policy, humanitarian intake, student visa settings, and labour market needs all contribute. Attributing immigration levels to any single industry’s influence oversimplifies a multifactor policy area.

Some contract growth reflects genuine scope changes. More people in detention for longer periods means higher costs. The MTC Nauru contract, for example, expanded in both duration and scope through formal amendments that are documented on AusTender.

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The way forward

The SETS audit has to be a starting point, not the finish line. Specific, measurable steps include:

1. Implement all 10 ANAO recommendations with published timelines. The departments have accepted them. The public should see when and how each one is delivered.

2. Mandatory critical incident reporting with a real-time dashboard. Every incident reported within 24 hours. Visible to oversight bodies. Not buried in internal reviews.

3. Open tender for all immigration contracts above $10 million. Limited tender should be the exception, not the default. The public deserves to see competitive bids for billion-dollar contracts.

4. Publish value-for-money assessments for all major contracts. If $787 million goes to a single provider for 105 people, the assessment explaining that cost should be public.

5. Establish an independent oversight body for immigration detention and settlement. Not internal review. Not occasional audits. A standing body with the power to inspect, report, and recommend.

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MTC Australia, Canstruct, the Department of Home Affairs, and the Department of Social Services were not contacted for comment prior to publication. The ANAO report and its 10 accepted recommendations represent the documented government response to the SETS program failures.

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Sources

ANAO audit and parliamentary reports

• ANAO, Auditor-General Report No. 28, 2025-26: “Settlement Engagement and Transition Support Program”
• ANAO, Auditor-General Report No. 37, 2019-20: “Offshore Processing Centres - Nauru and PNG Procurement”
• Productivity Commission, Report No. 77, 2016: “Migrant Intake into Australia”
• Australian Human Rights Commission, 2014: “The Forgotten Children: National Inquiry into Children in Immigration Detention”

Offshore processing costs and contracts

• Asylum Seeker Resource Centre, July 2025: “Twelve Years Later: Offshore Processing”
• Refugee Council of Australia: “Operation Sovereign Borders and Offshore Detention Statistics”
• Guardian Australia, December 2020: “Budget blowouts: offshore processing costs $12bn for fewer than 300 people”
• Kaldor Centre, UNSW, May 2024: “Cost of Australia’s Refugee and Asylum Policy” factsheet
• Human Rights Watch, March 2026: “Australia: Offshore Detention Cruel, Costly”

MTC Australia and Canstruct contracts

• Guardian Australia, September 2025: “US private prisons operator paid $790m to hold 100 people on Nauru in quiet expansion of contract”
• Guardian Australia, July 2021: “Liberal party donors’ revenue from uncontested contracts for offshore processing rises to $1.5bn”
• Guardian Australia, May 2019: “Canstruct chief executive denies link between LNP donation and $591m Nauru contract”
• Crikey, August 2023: “Canstruct’s $1.8bn Nauru contract and LNP donor connections”
• AusTender: MTC Nauru contract CN3918654
• AusTender: Serco onshore detention contract CN2748471
• Guardian Australia, December 2024: “Secure Journeys: US prison operator wins $2.3bn onshore detention contract”

Political donations

• Democracy for Sale archive, AEC donation data 1998-2023: 94,233 records
• Centre for Public Integrity, October 2021: “Industry Political Donations: Property and Construction Case Study”
• Centre for Public Integrity, July 2021: “Liberal party donors’ revenue from uncontested contracts”
• Michael West Media, September 2021: “The Big Ten Donors: Property developers ratchet up spending on politicians”

Paladin and Manus Island

• Guardian Australia, February 2019: Paladin Group $532m Manus Island contract
• ANAO, 2020: Procurement of garrison support and welfare services - Nauru and PNG

Nauru Files and conditions

• Guardian Australia, August 2016: “The Nauru Files: 2,000 leaked reports reveal scale of abuse of children in Australian offshore detention”