Turnbull Government Budget continues foreign aid neglect

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The 2017 Budget confirms Australia will continue to underperform in aid, but is this really a surprise? Foreign affairs correspondent Gabriel Polychronis investigates Australia’s history of failing to follow through on its international duty.

DESPITE AUSTRALIA'S unmatched economic growth, every government since and including John Howard has struggled to fulfil international aid expectations.

The 2017-18 Budget released on May 9 confirms Australia will continue to underperform in aid. By cutting just over $300 million from the foreign aid budget, our standing in the international arena will become further diminished.

But, unfortunately, this is just par for the course. Australia’s commitment to foreign aid over the last two decades has been confusing at the very best. Despite claiming to be "committed" to the United Nations Millennium Development Goals – now Sustainable Development Goals – Australia has largely been unable to keep up with other countries in terms of spending. With our country enjoying a record 104 quarters of economic growth, it is perplexing to see us consistently falling well short of what is expected of us in the international community. If we trace our steps back to the Howard Government, we can see we have never been pulling our weight in aid in recent times — something the Government chooses not to recognise. 

A peer review of Australia’s foreign aid, conducted in December 1999 by the Organisation for Economic Co-operation and Development (OECD), praised the quality of the government’s aid, but was damning of the amount of aid. Nevertheless, then Minister for Foreign Affairs Alexander Downer ignored the latter.

“This could not be a more positive report on our aid program from our peers,” he said in February 2000. “It really is quite excellent.”

"Excellent," he says, but the review also stated Australia’s foreign aid dropped to just 0.27% of Gross Domestic Product (GDP) in 1998 — its lowest level ever. This was at a time when the Australian economy grew by over 4% in real terms and had entered its ninth year of sustainable expansion. Twenty-three years earlier, aid funding peaked at a respectable 0.65% of GDP.

Also in 2000, the same year Downer praised Australia’s “excellent” aid program, the John Howard Government cut aid yet again in the May budget — this time to 0.25% of GDP.

One of the most damning moments in the history of the Coalition Government’s commitment to international aid came to light in the 2003-04 Budget. The Howard Government claimed to increase its overseas aid by 2.2%, however Kevin Rudd revealed this to be a non-truth. After the budget paper was released, Rudd exposed the Government for including in its foreign aid figures the cost of detaining asylum seekers in Nauru and within Australia.

Said then Foreign Affairs spokesperson Kevin Rudd:

“These guys are counting part of the cost of running Woomera in our foreign aid program. This is obscene.” 

This was a desperate move by the Liberal government to appease calls for increased foreign aid while not actually increasing it at all. Australia, despite promises to increase assistance in post-war reconstruction, also cut funding in Iraq and surrounding countries.

It wasn’t until the latter stages of Howard’s time as prime minister when his Government started to increase aid spending.

Before the opening of the 2005 U.N. World Summit in New York, Howard said the Australian aid budget would double to $4 billion a year by 2010. This was not considering inflation however, but still an increase nonetheless. Predictions at the time indicated $4 billion a year would be approximately 0.36% of GDP. This would have placed us 18th out of 22 OECD members — still at the bottom end.

Australia’s aid commitment, however, was still widely criticised and, in June 2006, then U.N. Millennium Campaign Director Salil Shetty spoke out against it:

“If you take your mind back to a couple of decades ago, Australia was a key player in the whole international development arena, and that has slowly slipped over the years. It’s been a leader in the Pacific and trade, and there’s no reason why it can’t be a leader in terms of aid as well.”

A good point to make considering Australia’s booming economy at the time.

Kevin Rudd’s election promise in 2007 was to increase Australia’s foreign aid commitment to 0.5% of gross national income (GNI) by 2015.

The 2007-08 Budget papers yielded an increase to 0.32% of GNI being allocated for foreign aid, however, figures released by the OECD in 2010 showed Australia’s aid spending slumped back to 0.29% of GNI in 2009.

The average for OECD nations at the time was 0.48%; then Parliamentary Secretary for International Development Assistance Bob McMullan expressed concerns of Australia’s aid spending:

“The international norm is supposed to be at 0.7%, and a lot of countries are there. Even after we’ve finished scaling up, we won’t be three-quarters of the way there.”

Julia Gillard’s ousting of Rudd in June 2010 marked the end of any hope of increasing the country’s aid budget. By cutting $3 billion over four years, Wayne Swan’s 2012 Budget deferred the Labor party’s aid spending target of 0.5% of GNI.

A further setback came in December of the same year, when then Foreign Minister Bob Carr confirmed the redirection of $375 million of the country’s foreign aid budget to accommodate asylum-seekers in Australia. Carr claimed it should still be considered as "foreign aid", however the Government received backlash from many Labor backbenchers.

Aid groups were even more aghast, with World Vision CEO Tim Costello saying the cuts were

“... very discouraging and damaging for Australia’s international reputation.”

The aid budget didn’t survive Labor’s leadership woes, as just a couple months after Rudd regained the prime ministership in June 2013, he announced yet another deferral of the government’s aid target. Although Papua New Guinea received more aid, the overall aid budget was slashed by almost $1 billion over four years in an attempt to return the budget to surplus by 2016-17.

Almost immediately after becoming prime minister in September 2013, Tony Abbott announced Australia’s overseas development organisation AusAID would collapse into the Department of Foreign Affairs and Trade (DFAT).

This decision, Abbott said, would enable

“... the aid and diplomatic arms of Australia’s international policy agenda to be more closely aligned.”

Abbott was right to think the two arms of aid and foreign policy were not aligned, but this did not fix the problem — if anything, it made aid even less significant. Many saw it as a decision to make extensive job cuts to make a cool saving $400 million over four years and was quickly opposed by aid advocates.

This AusAid-DFAT debacle is indicative of Australia’s core problem with their foreign aid program, as foreign policy researcher at the Australian National University Ben Day reiterated to Independent Australia:

We don’t have a very good sense of how foreign aid fits into our foreign policy more broadly. Some of that is reflected in the AusAid-DFAT situation where there was a lot of inter-agency pressure. There wasn’t a lot of interaction [between the two] as you’d think would happen. 

There’s just a totally different culture in the aid side as opposed to the foreign affairs side. And it’s still happening.

In the notorious 2014 Federal Budget, the Abbott Government froze foreign aid spending at $5 billion a year for two years, then pegging it to the inflation rate thereafter. Saving $7.6 billion over five years, this essentially confirmed the government’s abandonment of the country’s commitment to the UN Millennium Development Goals.

Foreign Affairs Minister Julie Bishop claimed the government needed to “deliver an aid program the country can responsibly afford,” as they are “repairing the budget.”

Despite this, the cuts to aid were clearly a move to help offset the drastic increase to defence spending: 6% above inflation in following years, eventually reaching 1.8% of the country’s GDP.

In December 2014, UNICEF Australia spokesman Tim O’Connor criticised the government’s cuts to international aid.

“One of the Government’s strongest areas has been foreign policy,” said O’Connor. “Cutting into foreign aid really diminishes the opportunity to leverage its interest in foreign policy.”

The May 2015 Budget was even worse, as foreign aid slumped to its lowest level – relative to income – since the inception of a formal aid program over 40 years ago.

This Federal Budget saw funding for the Middle East and Africa slashed by 82%.

Under Malcom Turnbull, the Liberal government stayed true by further cutting foreign aid by over $200 million — further dropping our standings in the OECD.

And in the most recent Budget released on May 9, foreign aid took yet another hit.

The Government will cut over $300 million from the foreign aid budget from 2019-20 by pausing indexation for two years. These savings will be redirected to “policy priorities,” said the Treasury. This move immediately sparked unanimous dissent from aid groups and advocates, such as World Vision, CARE, and the Australian Council for International Development.

When it expired in 2015, the U.N. Millennium Development Goals were essentially replaced by what is called Sustainable Development Goals (SDGs).

A DFAT spokesperson told Independent Australia that the Government “continues to support the UN SDGs”, but how serious could they be if they show no intention on maintaining any viable foreign aid spending commitment? If history is anything to go by, the aid budget will continue to be cut whenever they want. It’s easy to do too, since parliamentary approval is not needed to make ad hoc cuts to aid.

Ben Day says it is easy for governments to cut foreign aid, because the public don't understand what it delivers:

Aid is the lowest of the low hanging fruit… and I think the political class understands that.

It’s clear that within the group of decision makers around the budget, aid is just simply not a priority — it’s not well understood what it delivers for Australia.

With aid spending to be frozen in a couple of years’ time, the public will most likely continue, well, not caring…

It’s not a salient issue for the public. 

Many people would tell you that they don’t like to see aid cut, but when it comes to the crunch, Australians don’t change their votes based on the aid budget.

Although the Government claims to be committed to foreign aid and SDGs, there comes a point when overnments must decide actions speak louder than words.

You can follow Gabriel Polychronis on Twitter @G_Polychronis.

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