Australia's recent record on overseas aid is very mixed. It has shown commendable improvement in its commitment both to international development and in response to humanitarian emergencies in recent years, yet the overall volume of Australian aid ranks only in the middle of OECD countries. Furthermore, in the past two years there have been signs of wavering in the Labor Government's commitment to reaching an international benchmark on aid volume. In addition there has been a concerning trend to divert aid funds towards the costs of the Government's asylum seeker program. It is also clear that the bipartisan consensus supporting growth in Australian aid has been lost.
Australia agreed, along with all other UN members, to adopt the Millennium Development Goals (MDGs) in 2001. Goal 8 sets 0.7% of Gross National Income (GNI) as the benchmark level of development assistance that developed countries should commit to. However the Howard Government insisted that both the 0.7% target and the use of the MDGs as a measure of aid effectiveness were only aspirational. Hence it was not until 2007 that Australia agreed to use the MDGs as a benchmark in measuring the effectiveness of its own aid program.
As a percentage of GNI, Australia's official development assistance had fallen to 0.23% by 2003-04, a historic low point. In 2005 the Howard Government initiated a review of the aid program, which resulted in a White Paper the following year that laid out new directions and a significant increase in aid volume. After taking office in 2007, the Rudd Government committed to a substantial further increase, to reach a level of 0.5% of GNI by 2015. In 2012-13 the actual level stood at 0.37%, with Australia ranking 13th out of the 28 countries that make up the OECD Development Assistance Committee. In absolute terms Australia's is the eighth largest aid program.
The fact that Australia's program has increased is very significant in the context of economic change and the Global Financial Crisis, as several donors – not just the countries most affected by economic downturn but also traditionally generous donors including Canada and the Netherlands – have reduced their aid commitment in the past few years. Nonetheless the Australian commitment remains modest given the country's relatively robust economic health, and compares unfavourably with leading donors such as the Nordic countries, and also with the United Kingdom which has committed to reaching 0.7% of GNI by next year despite being caught in an extended period of very low economic growth.
In each of its last two federal budgets the former Labor Government delayed its target date for the achievement of 0.5%. In addition, in December 2012 and then again in the 2013-14 Budget, a significant amount of Australian aid funds were diverted to cover on-shore costs associated with the government's asylum seeker program. While such expenditure can be counted as Official Development Aid (ODA) under the guidelines set by the OECD Development Assistance Committee, most observers in the aid community agree that the scale of this diversion constitutes a substantial cut in the real volume of Australian aid. Indeed, it creates the anomalous situation where Australia has become the third biggest recipient of its own aid. The Labor Government announced a further reduction in aid in August 2013, but maintained that the target date of 2017-18 for achieving 0.5% still stood. However this would require a scale-up of about $2 billion in the final year, an increase that would be difficult both practically and politically.
On the eve of the 2013 Federal election the Coalition announced that it would strip a further $4.5 billion from the aid budget over the following four years. It also abandoned commitment to any date for achieving 0.5%.5 Effectively this will reduce Australia's commitment to 0.32% by 2017.
The series of backward steps by both Labor and the Coalition sends a very negative message to the global community, and especially to Australia's regional partners, about Australia's commitment to achieving sustainable development and reducing poverty. This is especially unfortunate because the Australian aid program has clearly improved not just in scale but also in effectiveness over recent years. This was borne out by the Independent Review of Aid Effectiveness conducted with bipartisan support in 2011. The Review identified many areas for improvement but nonetheless found that the program overall was effective in achieving its goals. The review made 39 specific recommendations, almost all of which were adopted by the Government.
During the Labor Government's period in office other significant improvements were made. New partnerships and a greatly streamlined approach to cooperation agreements greatly improved the ability of Australian and international NGOs to deliver aid projects. The government extended the geographical spread of Australia's aid program, including in Africa and the Middle East, while maintaining an appropriate focus on the Asia Pacific region. Education remained the 'flagship' element of the Australian aid program, including an impressive ongoing commitment to improving schools in Indonesia. Considerable effort was made to enhance water and sanitation programs and to promote disability- inclusive development. While significant investment was made in climate adaptation initiatives, progress was stymied by slow global progress both on emissions reduction and climate finance.
The Humanitarian Action Plan delivered in 2011 brought a more coherent strategic-level framework to Australia's approach to humanitarian affairs. The government showed leadership and generosity in contributing to international humanitarian appeals including food crises in East and West Africa, and support for Syrian refugees in neighbouring countries.
Overall the period from 2007 to 2012 can be seen as one in which Australia made substantial progress towards realising an aid program that reflects our capacity and status as one of the world's wealthiest and most secure nations. However in the past two years a series of backward steps, culminating in the Coalition's decision to suspend growth in the aid program, has brought this progress into very serious doubt.
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