Morally wrong and strategically short-sighted aid budget disappoints

09 May, 2018

With better than expected revenues the government has squandered the perfect opportunity to repair the beleaguered aid budget and instead delivered a blueprint that is “morally wrong and strategically short-sighted”, the CEO of ACFID, Marc Purcell, said.

Further cuts of $141 million over the forward estimates will see Australian aid drop to historic new lows.

Total aid spending will be $4.16 billion in FY2018-19 – just 0.22% of national income and dropping down to 0.19% by FY2021-22. This entrenches Australia as one of the world’s lowest aid contributors in terms of Gross National Income – ranking 19th out of the 29 nations that give aid.

“With the aid budget effectively capped, new projects in the FY2018-19 aid budget amount to a raid on existing programs, displacing funding for critical work aimed at alleviating poverty,” Mr Purcell said.

“On the same day we announced our budget, New Zealand announced a $700m increase in overseas development funding over their four-year budget cycle – a 30% increase in their aid program.”

Mr Purcell said that after 30% of cuts to the aid budget, Australia was increasingly seen as an unreliable development partner and a fair-weather friend in Asia and Africa.

“At a time when revenues have spiked and the government is offering $140 billion in tax cuts and other big spending initiatives - to continue slashing aid reflects a flawed moral approach to our poorest neighbours and strategically limits our ability to promote peace, stability and security in Asia and Africa,” Mr Purcell said.

“Now is the time for the Government to acknowledge that, as the ninth largest economy in the world, Australia has the economic capacity to increase its investment in inclusive and equitable development overseas.

“ACFID reiterates our call to the Government and Opposition to restore the bipartisan commitment to our internationally agreed development finance target – and spell their commitment out in concrete funding commitments in the next federal election.”

Some of the key budget measures that ACFID is highlighting in this Budget Analysis include:

  • Aid for the Pacific is up, rising to $1.3 billion or 30% of the overall aid budget. The new Pacific labour scheme offers the real prospect of greater economic integration.
    By contrast, almost every other country and regional program remains static, with no variation from last year. This is a missed opportunity to rebuild Australia’s aid program.
     
  • The undersea communications cable linking the Solomon Islands and PNG to Australia (two thirds of which Australia will pay) will likely come from cuts to poverty-alleviation programs for Indonesia and Cambodia, and delays in multilateral funding commitments. Because this information is ‘commercial in confidence’ the government is not specifying how much the cable will cost and we call for greater transparency on this initiative.
     
  • There is a notable absence in the budget is any funding for new initiatives in response to the Sustainable Development Goals (SDGs), beyond a pictorial representation of the SDG logos against thematic priorities. It’s disappointing that the budget fails to go beyond business as usual on this critical new agenda.
     
  • While the Government committed to annual humanitarian funding of $500m in the White Paper, a paltry $10m increase from last year’s budget estimate. ACFID members calculated our ‘fair share’ contribution to humanitarian response should be $573m next year – not the allocated $409.7m.
  • We welcome 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.
  •  We are pleased that ANCP is keeping pace with inflation but note the absence of any dedicated NGO funding windows to leverage thematic and country capabilities.

 

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For further information, contact Martin Thomas at [email protected] or on 0477 340 704