What's happening at the
Tuesday 22 Aug 2017 | 15:30 | SYDNEY
Tuesday 22 Aug 2017 | 15:30 | SYDNEY
Debates

Australia's aid budget 2012

5 Apr 2012 12:35

Will the Gillard Government stick by its commitment to increase the aid budget to 0.5% of Australia's gross national income by 2015/2016? That's the question being asked as rumours and leaks gather momentum in the lead-up to Budget night on 10 May.

In an interview with the 7.30 Report's Chris Ullman last night, World Vision Australia CEO Tim Costello prosecuted the case for maintaining the commitment, reminding everyone that the bulk of the world's poor lives in the Asia Pacific. He argued that Australians want their government to tackle global poverty.

COMMENTS

11 Apr 2012 18:49

Marc Purcell, Executive Director of the Australian Council for International Development, responds to 'Are the knives out for the aid budget?':

The Gillard Government committed to scaling up the Australian aid program at the 2007 election, and again in 2010. The 2010 ALP election platform mentioned the 2015 0.5% GNI commitment (twice):

'Australia is also a major contributor of development assistance. Last year, we contributed $3.8 billion in foreign aid. We are delivering on our commitment to increase Australia’s level of development assistance to 0.5% of Gross National Income by 2015-16...'

Again:

'We will deliver on our commitment to increase official development assistance to 0.5 per cent of Gross National Income by 2015-16.'

The ALP platform in 2011 Conference was updated to note:

That Conference:

COMMENTS

12 Apr 2012 16:17

Nic Maclellan is a journalist and researcher in the Pacific Islands and author of the Lowy Institute Policy Brief Turning the Tide: Improving access to climate finance in the Pacific Islands.

In the debate over whether Australia will reach the development assistance target of 0.5% of gross national income (GNI) by 2015, one element is often ignored – our parallel commitment to provide 'new and additional' financing to assist developing nations to respond to climate change.

Given that global warming is likely to set back progress on key development objectives – poverty alleviation, food security, water supply, public health and infrastructure maintenance – the debate over whether Australia can and should reach the target of 0.5% needs to include analysis of the funding of climate responses.

COMMENTS

16 Apr 2012 11:44

Annmaree's anxieties about the aid budget are well-founded. If the fiscal squeeze is to be as hard as everyone says, there seems little chance that aid will be spared. Of course, no one is talking about spending less on aid — only about slowing the rate of growth. Aid spending has doubled since 2005, and has been set to double again by 2015, so the rate of growth could be halved and it would still be very high. At the risk of playing Uncle Scrooge, let me suggest that slowing the growth of aid would be no bad thing.

The most immediate reason is that it is so hard to avoid wasting a lot of money when the amounts available are growing so fast. This is no discredit to AusAID, which is one of the world's better aid agencies. Their work is not just about signing cheques: they have to work with other countries and local communities to develop cost-effective projects that deliver real results. That takes a long time, so the faster money has to be spent, the more will be wasted. That does nothing to help the needy.

COMMENTS

17 Apr 2012 14:58

Danielle Romanes writes:

Hugh White argues that 'slowing the growth of aid would be no bad thing.'

'The most immediate reason is that it is so hard to avoid wasting a lot of money when the amounts available are growing so fast. This is no discredit to AusAID, which is one of the world's better aid agencies. Their work is not just about signing cheques: they have to work with other countries and local communities to develop cost-effective projects that deliver real results. That takes a long time, so the faster money has to be spent, the more will be wasted. That does nothing to help the needy.'

COMMENTS

18 Apr 2012 15:32

UNICEF Australia Director of Communications and Advocacy Tim O'Connor replies to Hugh White:

Two more points of contention, Hugh. You assert '...poverty is eliminated by economic growth, and aid does little or nothing to support that. Nor can it do much to change the distribution of wealth in a society'.

I'd say getting an extra 58 million children into school in the last decade, ensuring 1 billion children have been immunised against disease over the same period and bringing the world to the brink of wiping out polio counter the suggestion that aid doesn't eliminate poverty.

Aid, when used most effectively, challenges societal impediments (eg. of limited education and poor health) that trap individuals and families in the cycle of poverty. Giving people the tools to free themselves from this cycle by improving their skills and consequently their earning potential whilst reducing the burden of disease upon them and their carers are very significant 'elevators' out of poverty.

And secondly, suggesting Australia is 'treating Indonesia as a charity case' simply because we allocate aid there is ham-fisted reasoning.

COMMENTS

23 Apr 2012 12:09

Let me touch briefly on two issues raised by Tim O'Connor's response to my post on aid.

First, I'm sure Tim is right to say that aid can help foster economic growth by supporting health and education programs, because healthier and better-educated people are more productive. But that accords aid at best a modest role in the complex processes that drive economic growth. Aid does much more to alleviate the consequences of poverty than eliminate its causes. Nothing wrong with that as far as it goes, but let's not entertain the illusion that elimination of poverty is a gift that the West can bestow. It is something than counties must do for themselves, and many of them are.

Second, I would not be as swift as Tim to dismiss the place of charity (or altruism, if you prefer) in aid. There is nothing wrong with charity. There is however something wrong with getting charity and self-interest confused.

COMMENTS

23 Apr 2012 14:56

Dr Michael Carnahan is Chief Economist at AusAID.

History tells us that strong economic growth is a necessary, but not sufficient, condition to sustainably lift people out of poverty. Current and projected growth in Asia means the international community needs to evolve and reposition its development assistance. Done well, it can be a catalyst that supports this rising tide, genuinely raising all the boats. Those who now have the least opportunity can share in this prosperity in the Asian century.

Australia is a part of the most exciting and innovative region in the world; Asia has become the world's economic powerhouse. Our proximity to Asia, natural resource endowment and strong economy opens up a host of opportunities for Australia in the Asian Century.

COMMENTS

26 Apr 2012 13:56

Thanks to AusAID's Michael Carnahan for his contribution to our debate about the aid budget

This strand of the debate began with my claim that it was a mistake to keep spending more on aid when the purpose of our aid program was unclear. I'm not arguing against aid as such. I'm saying that the aid program needs to be judged by the extent to which it achieves its objective, just like any other program of public spending. That objective must therefore be clear, and so must the way in which the program is intended to achieve it.

Some would say the objective of the aid program is clear enough. Michael restates it in the words the Government used in its response to last year's Aid Effectiveness Review: 'The fundamental purpose of Australian aid is to help people overcome poverty'.

COMMENTS

1 May 2012 11:10

Danielle Romanes has suggested that if AusAID is short of capacity to administer the planned increase in aid, it can be effectively outsourced. Hugh White accepts the point. But how should we evaluate these alternative channels?

The World Bank, currently by far the main channel for outsourcing, seems to have its own problems, if we are to believe the recent report of a team from the Bank's alumni association. It sounds pretty dire:

The Bank that the new President inherits is under-performing. It has a very cumbersome inefficient internal structure...Morale is not good and the average length of tenure of Bank staff is a shockingly low 3.5 years...The major threats to the Bank stem from: 

COMMENTS

1 May 2012 14:01

Lawrence Haddad is Director of the Institute of Development Studies in the UK.

The debate in these pages on the case for aid resonates with one we are having in the UK: is aid about poverty reduction or economic growth? I have blogged about this topic in Development Horizons.

A March 2012 House of Lords report on the economic impact and effectiveness of development aid said that the role of aid should be to promote economic growth as the key way of reducing poverty. My response argued that (a) there are many ways to reduce poverty, (b) growth can be helpful, neutral or unhelpful to poverty reduction and (c) we have to find ways to get two-for-one responses — interventions that reduce poverty today and tomorrow.

COMMENTS