10.11 Outsourcing visa processing

Around 4.7 million visas were granted in Australia in 2012-13 (Chart 10.11.1). The cost of handling enquiries, assisting with lodgements and reviewing applications is around $600 million per year (including fixed costs), while the fees generated from Visa Application Charges exceed $1.2 billion (Department of Immigration and Citizenship, 2013a and 2013b).

Chart 10.11.1: Number of Visas Issued and Variable Funding for Visa Processing

This chart shows the total number of visas issued and the variable cost of issuing them over the period 2008-09 to 2012-13. Both series increase over the period.

Source: Department of Finance.

The Department of Immigration and Border Protection is currently implementing a reform programme that aims to: steer a greater number of visa applicants towards online and electronic visa lodgement; use greater automation to process low-risk visa applications; and expand the use of outsourcing arrangements for the operation of Australian Visa Application Centres that collect and register visa applications in a number of locations globally.

Notwithstanding the efficiency gains from moving from paper to electronic lodgement, there remain a large number of functions that could potentially be done at the same or higher levels of quality, at a reduced cost, through outsourcing or co-sourcing arrangements.

Many tasks related to visa processing are high volume and low complexity and would be well suited to outsourcing. Examples include call centres, shop fronts, counter services, data entry, payment collection, design and operation of web sites and the processing of low and medium risk visa applications.

An outsourced arrangement could have the added advantage of avoiding periodic major capital outlays for the fit-for-purpose information technology systems necessary to support visa processing.

However, outsourcing of this function would need to be handled carefully, as not all visa related tasks are suitable for outsourcing. The high risk of fraud associated with some visa applications and the complexity required in resolving these cases require that at least a residual processing capability should be retained by the Department.

That said, the Commission considers that the potential for significant efficiency gains and service advantages warrants the development of a business case and scoping study for the outsourcing of visa processing functions. This study should identify and group functions that are suitable for outsourcing and include a strategy for approaching the market to maximise savings.

References

Department of Immigration and Citizenship (DIAC) 2013a, Annual Report 2012-13, Canberra.

Department of Immigration and Citizenship 2013b, DIAC Portfolio Budget Statements 2013-14, Canberra.