Published daily by the Lowy Institute

DFAT budget: All pain, no gain

DFAT budget: All pain, no gain

DFAT's budget pain drags on. Last year's announcement of two new diplomatic missions – one in China (Chengdu) and one in Francophone Africa (Dakar, Senegal) – suggested a modest turnaround in DFAT's fortunes.

But of course it's not the fortune of DFAT that's at stake; it's the fortune of the nation.

In its Asian Century White Paper, this Government demonstrated a level of acceptance of the argument we've been making ad infinitum that Australia's overseas network needs rebuilding after decades of running-down. For Australia to prosper and profit from the opportunities generated as our region undergoes massive transformation, we should have a foreign affairs department at the peak of its capabilities and a foreign service representing Australia across the globe.

Far from rising to the challenges of the Asian Century, successive governments have almost halved DFAT's allocation over the last decade as a proportion of government expenditure, from 0.63% in 2002 to 0.35% in 2012. Looking at the last few years' inflation-adjusted data, there have been bad years (2008 was a shocker), better years (2009 was an attempt at redemption), and successive years of grinding efficiency cuts, peaking at 4% last year.

This year is no better or maybe even a little worse. The heralded Senegal mission is postponed, and we're closing Budapest. For Pete's sake, with a diplomatic network that's one of the smallest in the developed world and the smallest in the G20, we're closing posts?

Defending the closures, Foreign Minister Bob Carr insists there will be no staff cuts. The Budget papers released by his Government would appear to disagree: [fold]

The Government will achieve savings of $88.4 million over six years...from a temporary reduction in Canberra-based positions in 2013-14...

This is on top of the 100 or more positions cut last year.*

Looking at the actual numbers (which always conceal a complex array of factors like foreign exchange movements, parameter adjustments for overseas inflation and so on), the overall departmental budget will increase by $32 million to $1.698 billion, less than $1 billion of which is provided by government appropriations, and over $300 million of which was left over from the previous year's appropriations. The increase – 1.9% — is less than CPI. By comparison, Australia's development assistance budget will hit $5.6 billion this year and we will spend $25 billion on defence. 

Foreign Minister Bob Carr gets irritable every time a commentator questions him on the 'parlous state' of DFAT's budget. 'The adjective parlous should be discarded, repudiated, torn up, stamped on', he told reporters in Canberra. Having duly done as instructed, I need another word for the state of DFAT's resourcing and the level of attention given to it by government. 'Perilous' might do.

* Clarification: although staff numbers will be temporarily reduced in Canberra in 2013-14, overall staffing levels (ASL) will rise by 57 positions during the same FY.

Photo by Flickr user Halans.

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