Report – By Greg Sheridan of The Australian
The Australian government will impose greater transparency and accountability on foreign aid under a radical restructure of the programme that cuts hundreds of millions of dollars in aid spending this year, but quarantines payments to the Asia-Pacific region and key developing nations.
The governing Coalition is announcing new priorities for future growth in foreign aid as it unveils a 2013-14 budget of $5.042 billion – a cut of just $100 million on 2012-13 spending, but $650 million below Labor’s last budget forecasts.
Foreign Minister Julie Bishop will argue that with a government deficit of $47 billion, and government debt projected to rise to more than $660 billion, this is a generous level of aid for Australia. She will also point out that Australia remains, on a per capita basis, one of the most generous aid donors in the world.
Nations in Africa and the Middle East – along with some UN and environmental programmes – face the biggest cuts in aid in line with the Coalition’s plans to refocus attention in Indian Ocean and Asia-Pacific regions.
The government is planning to spend $4.5bn less on aid over the forward estimates than Labor had budgeted, but Ms Bishop and other senior ministers argue that Labor’s figures had no credibility because the party continually changed, deferred and cut its own forward estimates. The government intends to reshape the aid budget, with a new emphasis on accountability, performance benchmarks and reciprocal obligations from recipient countries.
It also wants to leverage Australian private sector involvement and pursue more comprehensive labelling and promotion of the nation’s aid efforts so Australian taxpayers know how their money is being spent.
Under the revised 2013-14 budget, the Abbott government has protected funding for Indonesia, Papua New Guinea, The Philippines and Nauru.
Indonesia will receive $532.4 million from Australia this financial year, $50 million more than it received last year, but $60m less than was allocated in Labor’s aid budget for this year.
PNG will receive $448.5 million this year, exactly the same amount as last year, and about $5 million less than was allocated in the budget.
The Philippines will receive $109 million, $10 million more than last year and exactly the amount in the last budget. This reflects Canberra’s response to the devastating typhoon that struck the nation last month.
Nauru, which houses asylum-seekers on behalf of Australia, will receive exactly the $20.7 million allocated in Labor’s last budget. The government was constrained in the changes it could make for this year because much money had been spent, and contracts entered into, before the change of government.
This protected funding for a number of UN programmes. The government regards next year’s aid budget as a blank canvas and is embarking on wide-ranging consultations for a redesign of the aid budget.
However, it will commit itself to increasing the aid budget every year across the forward estimates in line with the consumer price index. It believes this will restore stability and predictability to the aid budget, while there will always be a contingency fund to respond to natural disasters.
Australian diplomats around the world yesterday informed recipient governments and organisations of the new aid funding levels.
Bishop believes there is a natural division of labour in the aid sphere, with Europe concentrating on Africa and the US being the disproportionate donor to the Caribbean. Australia, she believes, should concentrate on Asia and our immediate region.
The Coalition says it wants to restore stability to the budget after volatility under the Labor government. Labor had announced a commitment of raising the aid budget to 0.5 percent of gross national income, which would notionally have seen the aid budget double to $10 billion in a few years.
However, the Rudd and Gillard governments constantly adjusted the timing of this target, leading to uncertainty about aid levels even 12 months in advance. In its last 15 months in government, Labor cut $5.7 billion from the aid budget’s forward estimates.
Aid was also subject to accounting tricks, such as designating more than $300 million in money spent on offshore processing of asylum-seekers as foreign aid, which made the Gillard government the third largest recipient of foreign aid.
The total aid budget of $5.042 billion includes allocations to country and global programmes of $3.59 billion. The remainder is accounted for by aid programmes administered by other departments and money provided to multilateral agencies.
Programmes concerning climate change and environmental sustainability will fall from $17 million last year to $500,000 this year.
The UN’s International Labour Organisation will get nothing.
The government believes the aid budget was severely distorted by being used to support Australia’s bid for a seat on the UN Security Council. It believes, for example, there is no other explanation for Canberra’s commitment to build a new parliament house for the Caribbean nation of Grenada.
The influence of Security Council election politics was evident in the aid allocation for the Middle East and North Africa, which had risen to $60 million in 2012-13, the year of the bid, but was scheduled even under Labor’s budget to fall to $42 million this year. Under the Coalition’s revised budget this will fall further to $30 million.
There will also be a $2 million cut in aid to the Palestinian territories – a fall of $5 million from Labor’s last budget. Bishop believes much money was allocated to international programmes because the aid budget was rising so quickly that bureaucrats could find no other way to get the money out the door.
The government’s new approach will focus on education, health, good governance and empowering women and girls. This will be designed to reduce poverty by promoting economic development, while at the same time promoting Australia’s national interests.
Bishop favours an approach that would leverage the presence and skills of the private sector. She also favours greater emphasis on aid for trade and infrastructure.
Under plans for greater transparency, Bishop will institute a process of providing a “green book” that aggregates and presents the total Australian contribution to each recipient country.
The reform of the aid programme has been led by Bishop, who last year announced the amalgamation of AusAid with the Department of Foreign Affairs and Trade. The merger to be completed by the middle of the year, along with the reforms to be announced today, are designed to integrate aid as a rational tool of diplomacy and national policy.
Source: The Australian