THE surge in boats carrying asylum seekers last year has delivered an explosion in profits for the company that privately operates Australia's detention centres.
Serco Australia, a division of a British multinational, enjoyed a 45 per cent rise in net profits to $59 million last year. The revenue of the company, which has the contract to run immigration detention services on behalf of the federal government, almost doubled from $369 million to $693 million.
The huge rise in Serco's cash flow, however, was not matched by as impressive a performance in complying with local laws on reporting financial statements.
Once again, in contravention of the Corporations Act, Serco's statements were filed late this year. It was late filing last year as well.
And the disclosure in its accounts, according to a leading accounting and regulation academic, failed to comply with Australian accounting standards.
"Rules are rules," University of NSW senior lecturer Jeffrey Knapp told The Sunday Age yesterday. "Serco has broken them. Serco Australia Pty Ltd is a reporting entity and should do a general purpose financial report like BHP or Telstra including full disclosures of related-party transactions and balances.
"It is reasonable also to question whether Serco should be subject to a higher level of accountability and disclosure given the relative political and economic importance of the asylum seeker business that it conducts in Australia," he said.
Serco's high cash flow, low debt levels and 35 per cent profit margins would make it the envy of the Australian corporate elite. Few of Australia's top 100 companies matched its profit rises or margins when they last reported. Serco's profits had doubled the year before. But business conditions are favourable.
The influx of asylum seekers since the breakdown of the government's Malaysian people-swap plan has led to an increase in detention centres from 12 to 20 across the Australian mainland, Tasmania and Christmas Island.
It has also meant a lucrative new $1 billion contract for Serco. In a secret deal with the government in early December last year, the British services giant renegotiated its original contract of $279.2 million over four years to $1.03 billion.
It is difficult to tell from Serco Australia's financial statements, which were filed on Friday, exactly how profitable the outsourcing of immigration detention is. Serco also manages ports and defence bases for the government and provides no breakdown as to the profits of each division.