The Federal Government has signalled its intention to shut several onshore asylum seeker centres, a week after the Commission of Audit labelled offshore processing a waste of money.

Offshore processing costs Australian taxpayers 10 times more than letting asylum seekers live in the community while their refugee claims are processed, the Commission of Audit’s report reveals.

It costs $400,000 a year to hold an asylum seeker in offshore detention, $239,000 to hold them in detention in Australia, and less than $100,000 for an asylum seeker to live in community detention.

In contrast, it is around $40,000 for an asylum seeker to live in the community on a bridging visa while their claim is processed.

The Commission of Audit’s report shows that in the past four years, the Australian government has increased spending on the detention and processing of asylum seekers who arrive by boat by 129 per cent each year.

Costs have skyrocketed from $118.4 million in 2009–10 to $3.3 billion in 2013–14.

Offshore processing is the fastest growing government program, with projected costs over the forward estimates of more than $10 billion.

The Federal Government will announce the closure of six asylum seeker centres, including two offshore sites, with the federal budget next Tuesday.

The remote Curtin centre in WA will be closed, as will two centres near Darwin, the Aqua and Lilac compounds at Christmas Island and the Inverbrackie camp for families in the Adelaide Hills.

The Government claims the closures will save taxpayers $282 million over four years and are a result of its hardline stance to “stop the boats”.

But Professor Jane McAdam, Director of the Andrew & Renata Kaldor Centre for International Refugee Law at UNSW, says much more money could be saved with the less harmful and traumatic option of processing refugees.

“At a time of fiscal constraint, this is an obvious policy area where expenditure could be slashed,” Professor McAdam said.

“Savings should not come from reducing services to asylum seekers, a solution proposed by the Commission of Audit.

“Services such as healthcare, counselling, and legal assistance are already limited and inadequate. Their reduction would only exacerbate the already precarious circumstances of asylum seekers in detention.

“Offshore processing and mandatory detention are inhumane and unnecessary policies that violate Australia’s international legal obligations,” she said.

“They cause and exacerbate psychological harm, mental illness and trauma. They have led to many instances of self-harm, and as the events of February 2014 on Manus Island show, serious physical injury and even death.”

Meanwhile the Greens have appealed to the Australian Federal Police Commissioner, asking for an investigation into whether Australia has breached its own domestic law in its cruel treatment of asylum seekers.

The specifically want to know about allegations that Australian authorities added three extra people to an asylum seeker boat and turned it back to Indonesian waters.

“The reports of the Australian Government and officials putting on board asylum seekers to another boat and towing the boat back to Indonesia hasn't just upset our nearest neighbour, it may have also breached Australia's own criminal code,” Greens Senator Sarah Hanson-Young has told the ABC.

Questions have been raised of the Government’s possible breach of Australian Criminal Code Division 73.

The section carries a provision stating that a person is guilty of people smuggling if they organise or facilitate the entry of another person into a foreign country, and that entry does not comply with requirements under that country's law.

Foreign Minister Julie Bishop has denied Australia is doing anything wrong, before rushing to take the party line.

“Australia abides by, not only our own laws, but also international laws,” she said on Wednesday.

“What we're doing comes down to an issue of sovereignty, and we're entitled to do what we're doing. But I'm not going into details. They are operational matters and we are not going to flag to the people smugglers what we're doing.”

While many believe the Federal Government is in breach of domestic law or its obligations under the Refugee Convention, there is little chance of a trial or conviction anytime soon.

Such actions would require the Australian Attorney-General George Brandis to approve a prosecution against his own political party and policy.