The federal government has spent more than $1 billion this financial year to house about 2200 asylum seekers in offshore detention centres in Papua New Guinea and Nauru.
Running the detention centre on Manus Island has cost taxpayers $632.3 million, and the operational cost of Nauru was $582.4 million, a Senate estimates hearing was told on Monday.
Deputy secretary of immigration Mark Cormack said the costs – for 1167 asylum seekers on Nauru and 1060 on Manus Island – included health expenses, escorting asylum seekers to and from the centres, staff costs and payments made to both countries to support the detention facilities.
A spokeswoman for Immigration Minister Scott Morrison defended the costs, saying the running of the two centres underpinned the government's border protection regime and the costs had declined by "almost $100 million" compared with the previous financial year.
"It not only stops the people-smuggling trade but it does so without drawing on Australia the significant costs associated with our other measures, especially offshore processing," she said. "Stopping boats is saving lives and saving billions of dollars."
Despite the huge price tag, asylum seekers on Manus Island have suffered another setback as PNG Prime Minister Peter O'Neill confirmed there had been further delays in resettling asylum seekers who were found to be refugees.
Mr O'Neill, who met Prime Minister Tony Abbott on Sunday en route to Jakarta for the inauguration of Joko Widodo as new Indonesian President, said his government needed more time.
In a statement, Mr O'Neill said that "due to lack of understanding and support for refugee settlement in PNG communities", a new policy would be prepared with an increased focus on consultations and building public awareness and support.
"The new policy will be considered by cabinet after these comprehensive public awareness and consultations are completed," he said.
Reports said Mr Abbott and Mr Morrison met Mr O'Neill to discuss the delays in the resettlement of refugees.
Labor immigration spokesman Richard Marles said the federal government had serious questions to answer over its failure to effectively manage the relationship with PNG and its capability to resettle asylum seekers, particularly after two deaths in the compound since February this year.
"In March, Tony Abbott said people would be resettled in PNG within three months," he said.
"Scott Morrison needs to start taking responsibility for his disastrous handling of this key agreement, including his failure to actively engage with the Papua New Guinea government until after the riot at the Manus Island facility in February of this year," Mr Marles said.
The estimates committee also heard that 164 asylum seekers arrived in Australia during this calendar year, compared with 20,711 arrivals in the previous year. The big drop had saved the government $2.5 billion, the estimates hearing was told.
