Bruce Duncan. Julie Bishop cuts Overseas Development Aid to record low.

May 10, 2016

Despite lobbying from many groups, the May federal budget for 2016-2017 is hacking another $224 million from Australia’s overseas aid, reducing our aid to $3.8 billion, and as a percentage of our national income to just 0.23%, our lowest level ever. The Coalition had already cut $1.1 billion off our aid, reducing spending in Africa and the Middle East by 63%, and in Asia by 36-38%.

According to the national coordinator for Micah Challenge, the coalition of church networks, this latest cut comes ‘on top of $11 billion in cuts to aid’ over ten years, and is the fourth time the Coalition government has cut aid levels.

Australia’s overseas aid had dropped from 0.45% of our Gross National Income in 1971-72, but a bi-partisan attempt to raise our aid to 0.5% GNI by 2015 was initially deferred by Labor in 2012-2013, at a saving to the government of $5.7 billion; the Coalition later cut much further. As Beth Sargent from the Australian Council for International Development said, Australia is no longer pulling its weight in international development efforts.

Why are we so mean on overseas aid?

Surprisingly there was very little commentary on these cuts in the media, or about their significance in terms of our national interest. Partly this is explained by budget pressures, but also by the failure of politicians and opinion-makers to educate the Australian public about the urgency of overseas aid.

Public opinion vastly overestimates the extent of Australian aid. According to a recent national poll of 1528 adults on behalf of Campaign for Australian Aid, the average of responses estimated that our overseas aid amounted to 13.28% of the federal budget, about 14 times more than the actual figure of 0.9%. Less than one-in-five people estimated the aid budget as less than 1%.

Australia has committed to supporting the UN Sustainable Development Goals, the global effort to greatly reduce extreme poverty and hunger, and lift living standards in poorer countries especially, while all countries act urgently to sustain the environment and reign in dangerous green-house gases. Yet we are being seen as laggards in this effort, as ‘leaners, not lifters’, in the famous words of an earlier Australian Treasurer.

As the Chief Executive of the Australian Council for International Development, Marc Purcell said, our cuts to overseas aid, including many life-saving programs, are hurting some of the poorest people.

Avoiding failed states in our region

Consider what reductions in aid mean in our region. Papua New Guinea has a population of 7.76 million, and is growing quickly. How is PNG to manage such an enormous process of change? It already has acute problems with providing education and healthcare, not to mention unemployment, extraordinarily difficult transport problems, issues around law and order, political stability and growing challenges from climate change and drought.

It is vital that PNG make steady progress in all these areas, but it cannot without significant international support, especially from Australia. What would a failed state in PNG look like?

We had the example of the Solomon Islands where in 2003 Australia led a coalition of countries and sent police and armed forces to restore order. In the next ten years until withdrawn, 7,270 Australian personnel served in the Solomons, at a cost to Australia of $2.6 billion.

We hope for a much better future for PNG, but other countries beyond the Pacific are fragile as well and need our sustained aid and development support. Some other countries may want to fill any vacuum we leave, including China.

The climate change imperative

As if humanitarian reasons were not compelling enough for reasonable levels of overseas aid, climate change adds extra urgency. With our expertise in agriculture, health care and education among many other areas, Australia can contribute greatly to help other countries adjust to climate change.

Australian know-how in dry-land farming and water management could be very important in parts of Africa and Asia. Our agricultural scientists are continually working to improve strains in crops that yield more, using less water, and are more resistant to insect pests and diseases.

Development specialists are working to ensure our world can manage this transition to a sustainable global economy and life-style, but this will not happen unless countries like Australia recognise that it is in our own national interests to support these efforts strenuously.

Despite serious economic difficulties, along with five other OECD countries, the British government has committed to maintain its overseas aid at 0.7% of GNI, the international target recommended by the United Nations and accepted by Australia in the early 1970s. Such is the urgency about promoting international development at this crucial time that 22 out of the 28 OECD donor countries increased their foreign aid this year.

In the view of Paul O’Callaghan, CEO of Caritas Australia, Australia has ‘given up its shared leadership role in combatting poverty’, despite being one of the wealthiest OECD countries. Cuts to our aid have damaged Australia’s reputation internationally and set back efforts to create a more equitable and sustainable world in line with the UN Sustainable Development Goals.


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