No trust deed. Billions of tax dollars to be spent without oversight by Nauru

The Labor Government’s deal with Nauru to resettle unwanted refugees will cost Australian taxpayers billions of dollars spent on who knows what. Alison Battisson reports.

So far the Government has transferred at least $388 million into a trust fund that benefits only the Nauruan Government without signing an independent trust deed that determines how the money will be spent or otherwise controlled.

According to the Australian Government’s own estimates, at least $2 billion could be transferred to this trust fund.

So how and by whom is the trust fund managed? We shouldn’t know. Our Freedom of Information request to the Home Office for the Memorandum of Understanding (MOU) between Australia and Nauru and the trust deed setting out the financial arrangements for the Memorandum of Understanding was met with “no separate documentation available”.

MWM A completely blacked out copy of the MOU was received. Even the title was blacked out. The reason given is that the Memorandum of Understanding falls within the FOI exemption for “documents affecting National Security, Defense or International Relations.” Especially:

“The phrase ‘international relations’ has been interpreted to mean the ability of the Australian Government to maintain good working relations with other governments and international organisations, and to protect the flow of confidential information between them. The expectation of harm to international relations must in all cases be reasonable, having regard to the nature of the information, the circumstances in which it is communicated and the nature and extent of the relationship. There must be genuine and substantial grounds for the conclusion, supported by evidence.”

“The information contained in the document relates to secret agreements between the Australian Government and the Republic of Nauru. The Republic of Nauru is a sovereign nation and the Government of Nauru is responsible for issuing long-term visas to persons who no longer have the legal right to remain in Australia.

“I consider that the release of information marked ‘s33(a)(iii)’ would adversely affect the Department’s ability to maintain good working relations with the Government of Nauru. This assessment has been made having regard to the nature of the information contained in the document and the current nature and extent of the Australian Government’s relationship with the Government of Nauru.”

What’s the secret?

What is in the Memorandum of Understanding that “may adversely affect the Ministry’s ability”? [of Home Affairs] Given the billions of dollars Australia sends to Nauru, what should Australia do to maintain good working relations with the Government of Nauru?

The Memorandum of Understanding governs the transfer of the ‘NZYQ cohort’ to Nauru; This transfer got its name because the High Court of Australia (NZYQ v Commonwealth of Australia) ruled that immigration detention of people who cannot be removed from Australia within the reasonably foreseeable future is unconstitutional.

Refugees from Nauru. Indefinite detention is a clear violation of the Supreme Court decision

Many of the cohort had criminal records, and the Australian Government identified this despite serving criminal sentences, having connections to Australia (i.e. Australian citizen partners, children and businesses), and some having grown up in Australia.

In other words, it is politically expedient to demonize them and then alienate them from Australia, even though Australia is the country that most shaped their characters. But this political strategy comes with a price.

money for refugees

The only country willing to recruit members to the NZYQ cohort is Nauru. And Nauru is only willing to do this in exchange for large amounts of money.

When the first person was transferred to Nauru about two weeks ago, Australia paid $20 million to the Government of Nauru and deposited $388 million into a trust fund. Two more people followed, triggering further payments.

Throughout the life of the arrangement,

Australia will transfer at least $70 million a year to the trust fund, or about $2 billion in total.

It appears the money is being transferred without a formal document beyond a Memorandum of Understanding, the type of document normally short on details with big demands.

This occurred despite a Home Office employee giving evidence to the Senate on September 3, 2025 that an escrow agreement was in the process of being negotiated. As Senator Pocock put it at the time, the cost of the deal with Nauru and the lack of due diligence were “absolutely insane.”

Where will the money be spent?

The trust fund into which Australian money is transferred is supposedly for the benefit of the people of Nauru. Since 2013, Australia has paid approximately $13 billion to the Government of Nauru for overseas processing of people seeking asylum in Australia; That’s well over a million dollars for every resident of Nauru. The additional $2 billion (and counting) represents $180,000.

To put these figures into perspective, Nauru’s GDP per capita is approx. $20,000 (2024) and has one of the poorest socio-economic indicators in the world.

According to the global poverty fighter, Borgen ProjectA quarter of Nauruans live below the poverty line, unemployment rates are high and 71% of Nauruans are obese. Moreover, there is no longer any opportunity to treat serious diseases on Nauru.

It is unclear what benefit the people of Nauru receive from the billions of dollars given to their government by Australia, and it is also unclear how transferring more billions of dollars will improve the socio-economic position of the Nauruan population (which is in the process of moving to higher ground due to climate change).

Instead the money goes somewhere else, and it should.

The people of Nauru were created to house people that Australia does not want and who do not want to be on Nauru and who the Australian Government insists are “murderers and rapists”.

The only beneficiaries of the arrangement were Nauruan politicians and the Australian Government, which effectively shut down immigration and refugee issues as an election issue by deporting vulnerable people who could not vote to a remote Pacific island.

Exile to a lost shore: human rights, climate and the Nauru ‘solution’