A more effective aid dollar GREG SHERIDAN THE AUSTRALIAN JANUARY 18, 2014 12:00AM THE Australian people, on a per capita basis, are among the most generous providers of taxpayer funded international aid in the world. Almost no one knows this because the vast aid lobby, itself extensively taxpayer funded, has an interest in presenting Australia as niggardly and mean, so that the argument is always pressed to increase the aid budget. The same is true of refugees. On a per capita basis Australia has the largest permanent resettlement program for refugees of any country in the world. But youd never guess that from the public debate. The Abbott government, led by foreign minister Julie Bishop, is determined to comprehensively reform the overseas aid budget. Under Labor, the aid budget had become both ramshackle and incoherent, completely unpredictable as it was subjected to constant revisions and deferrals, yet ballooning wildly. In its last three years in office, Labor deferred $5.7 billion from the forward estimates, which cover the next four years. Nonetheless, according to Labors announced aid policy, the total aid budget was set to double from more than $5bn to roughly $10bn. This was all to meet a preposterous target for aid of 0.5 per cent of gross national income. This approach reached an apotheosis of idiocy when it allocated $300 million of the aid budget to offshore processing of asylum-seekers, making Australia one of the largest recipients of Australian foreign aid. Bishop will announce budget details today. Our diplomats overseas have this week been telling all our aid recipients the news. In Australia attention will focus on the headline figures. Notionally, there is more than $4bn less across the forward estimates, although Labors forward estimates were a complete fiction. Compared to the actual money spent on aid in 2012-13, there will be $100 million less in this year, 2013-14. This is a total notional cut of $650m from the previous governments 2013-14 budget. But the official aid budget, which, as we shall see, does not quite capture all of our foreign aid effort, will still be $5.042bn. Bishop points out that with a $47bn budget deficit, and government debt likely to rise to more than $650bn, this is substantial. Equally important, the government has committed to increase the aid budget each year in line with the consumer price index. This gives aid its best chance of achieving stability, predictability, political sustainability. The government is not mentioning the old commitment it shared with Labor one day to raise aid to 0.5 per cent of GNI. It remains, for the moment, a long-term aspiration. But no one should expect any real movement in that direction by either side of politics. The reform of the aid budget has been led by Bishop who is a powerful figure within the government. If the aid lobby has an ounce of brains, admittedly a big if, it should see Bishop and her reforms as the best chance of achieving a durable aid consensus. Within the aid budget, Australia is moving away from Latin America, and to some extent from Africa. It will move away from UN and other multilateral programs. These changes are not all evident in this years new budget, because much money had already been spent or contracts signed. The Abbott government will not dishonour any contracts. But sub-Saharan Africa, for example, received $211 million in 2012-13 and this year will receive $133m. The cut in Latin America is tiny because most of the money there had already been spent. But the government is refocusing aid priority on Asia, the Indian Ocean and the Pacific. It is perfectly sensible that Europe concentrates on Africa and the US be the disproportionate provider to Latin America and the Carribean. Australia, with its limited resources and small diplomatic network, should concentrate on Asia, where there is still plenty of poverty to go around and our national interests are so deeply engaged. Nonetheless, Australia is still doing its share in Africa through the large amount of money going to UN programs. These programs, like everything the UN does, have a huge bias towards Africa. Nonetheless UN programs will likely be cut further in coming years. Many of them had Australian money committed before the change of government. The Abbott governments priority for key regional countries is clear. Indonesia, Papua New Guinea, The Philippines and Nauru remain obvious priorities. Last year Indonesia received $485m. This year, it will receive $532m, an increase of nearly $50m in an overall budget subject to cuts. Nonetheless this is still about $60m less than the figure which appeared in last years budget. PNG received $448.5m last year and will receive exactly the same amount this year, though that is marginally less than the projected figure in the last budget. The Philippines gets $10m more than last year. This reflects the response to the devastating typhoon it suffered. Aid for Nauru is the same as that which Labor budgeted for last year. Among NGOs, the government will increase money for agencies that perform most effectively in the field, such as the Red Cross, and decrease money for advocacy organisations such as the International Labor Organisation (which will get nothing) and environmental groups. This is good policy. Although some Australian NGOs will complain about their treatment, overall they get more than four times as much taxpayer money as they did just five years ago. That was a real Labor growth story. All these changes can be achieved without legislation. In next years aid budget, the Abbott government will not be constrained by existing contracts. It will start from ground zero to design the best, most effective aid budget it can. Programs will be subject to rigorous performance benchmarks. In its design of next years aid budget, the government will focus on education, health, governance and empowering women and girls. The government will also promote the theme of aid for trade. Bishop wants to leverage Australian private sector involvement where possible. She will end AusAids previous bias against infrastructure projects. Infrastructure - roads and bridges for example that connect farmers to markets - are a critical tool of economic development. It is also important for the government to change the way Australia presents its aid. Our efforts are often grossly undersold through a foolish prejudice against labelling Australian products. Similarly, in responding to disasters some countries ascribe a dollar value to the efforts of their militaries to help. In the recent typhoon in The Philippines, Australia had navy ships, air force planes and 550 defence personnel on the ground, but arcane government accounting procedures meant this was not presented as part of our aid contribution. This all needs to change so that we give the world, and ourselves, a more accurate picture of what we do. A ludicrously disconnected array of activities was previously funded by the aid budget, much of it focused on winning a seat at the UN Security Council. We were going to pay to build Grenadas parliament house, and build statues in New York to commemorate Carribean anti-slavery campaigns. A typical nonsense in the aid budget for years allowed the Liberal and Labor parties to send their officials to fraternal party conferences in the US and Britain. This is a laudable activity but there is no reason the taxpayer should fund it, much less as overseas aid. This is the most important and beneficial aid reform in decades. To sell it, the Abbott government needs to move the aid debate beyond its traditional ghetto of cliches, stereotypes and self regarding emphasis on inputs rather than outcomes. It is a big task of advocacy.
Posted on: Sat, 18 Jan 2014 07:46:10 +0000