Government keeps its ‘foot on the throat’ of the aid budget

08 May, 2018

The Federal Government has kept its ‘foot on the throat’ of the Australian aid budget, despite its improved revenue, concerns about China’s rising influence in the region and contrasting with the $3.8 billion previously announced loans scheme for arms dealers.

Total aid spending this year will be $4.16 billion in 2018/19 ($3.9b 2017/18) or just 0.23% of national income – and entrenching Australia as one of the lowest aid contributors. Australia now ranks 19th out of the 29 nations that give aid in Gross National Income.

“This budget was an opportunity to show leadership and use some of the unexpected revenue to repair past damage to aid. Unfortunately, this is a lost opportunity and we are very disappointed”, the CEO of the Australian Council for International Development, Marc Purcell, said.

“There is a slight blip up in aid this year but the government’s decision to not keep aid increases linked to inflation in future years means aid will drop down to 0.19% of GNI by 21/21.”

Mr Purcell said with the aid budget effectively capped, new spending projects in the aid budget outlined in this budget effectively amounts to a raid on aid that will mean critical poverty alleviation programs will end.

“The undersea communications cable linking the Solomon Islands and PNG to Australia (two thirds of which Australia will pay) will come out of poverty programs for Indonesia, Cambodia and multilateral funding,” Mr Purcell said. “But because of ‘commercial in confidence’ the government is not specifying how much the cable will cost and we call for greater transparency on this initiative.”

Aid for the Pacific is up, rising to $1.3 billion or 30% of the overall aid budget.

“We welcome this commitment to the Pacific region to back the government’s White Paper commitment,” Mr Purcell said.

“The budget also features a nominal $10million increase to the humanitarian spending but with the increased rate of climate-related natural disasters this is not enough and leaves our humanitarian capacity underdone.

“The aid sector also welcomes the $10 million friendship grant scheme that was unveiled by the government in this Budget. But it is important that standards of child protection, anti-terror financing and non-evangelisation are applied.”

The Asia Pacific is home to nearly half of the world’s poorest people. The World Bank estimates that 766 million people still live in extreme poverty.

Yet Australia has fallen to 19th out of the 29 countries that give overseas aid. The savageness of our recent aid cuts puts us in a similar category to Greece and Hungry.

In contrast Britain’s conservative government - despite its greater economic challenges – has stuck resolutely to keeping its aid funding at its promised level of 0.7% of GNI.

“The Government's Foreign Policy White paper sets out the opportunity to build security and prosperity in our region through a strong and consistent aid program,” Mr Purcell said.

“Yet after 30% of cuts to the aid budget, Australia is increasingly seen as an unreliable development partner and a fair-weather friend in Asia and Africa.”

“We call on the Government and Opposition to announce a trajectory to restore aid funding in the long term as part of their election commitments,” Mr Purcell concluded.

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