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The new golden consensus on aid

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COMMENTS

13 August 2010 11:42

Australia's politicians think that the voters are ready to spend $8 to $10 billion a year on foreign aid. More than happy — relaxed, comfortable and committed to the idea as a firm policy with a fixed arrival date, in five years time.

The amazing thing is that both sides of Australian politics have broken a key rule about big promises: politician should commit to a figure or a date, but not both. If you commit to a figure and a date, it becomes a promise hard to fudge. And both sides of politics have recommitted, even highlighted, their agreement on a goal that is just five years hence.

In the foreign affairs debate, it was striking how the Millennium Development Goals were part of the opening statements by both the minister, Stephen Smith, and shadow minister, Julie Bishop. Both underlined their promise to keep lifting aid spending to reach the target of 0.5% of Australia's Gross National Income by 2015-16.

This is the new golden consensus on aid – lots more gold for overseas development. 

The Millennium goals featured so prominently because the goal posts are arriving fast. When the voters go to the polls next in 2013, the Millennium due date will be just over the horizon in the coming term. Whoever gets elected this time must keep piling up the gold and create sturdier political and bureaucratic structures to scale and spend the aid mountain. Australia's aid to Gross National Income ratio is forecast to increase to 0.33 per cent this financial year and reach 0.42 per cent in 2013-14. The gold must keep gushing.

The voters may worry about boat people and a Big Australia, but presumably the focus groups still find that Australians look out at the world around them with interest, hope and generosity. Taking that generosity as a political and policy constant, Labor and the Coalition are thinking about how to handle the annual gold mountain as it doubles in size.

The Labor approach is set out here. Labor is looking at the best means to deliver aid, via an inquiry into the way AusAID uses advisers and consultants. And Labor has pushed AusAID a bit beyond DFAT's orbit by making it an executive agency reporting directly to the Foreign Minister.

The Coalition pockets all that and takes the next logical step, promising the creation of a Minister for International Development. Back in March, this column argued for some big bang solutions, such as the creation of the Aid Minister and even putting AusAID in the Prime Minister's Department to give it real independence. (On the shift of aid to PM&C, the usual Canberra response comes from a great Australian movie: 'Tell him he's dreaming!')

As the gold mountain grows, though, so grows the logic of having an Aid Minister rather than a Parliamentary Secretary. The aid program has increased in size by 42 per cent since 2004-5, and needs to double in the next five years to kick that big M goal. An annual stash of cash of $8 to $10 billion deserves a Minister. That amount of gold means AusAID has to be more than the automatic teller machine for PM&C, DFAT, Defence and other big Canberra carnivores.

Here is the Liberal promise on the Minister for International Development:

Given the size and significance of our foreign aid budget, the Coalition will appoint a Minister for International Development to work with the Minister for Foreign Affairs to oversee our aid budget and to have responsibility for AusAid and the delivery of aid through non-government channels. The Australian National Audit Office raised serious concerns about AusAid’s ability to effectively manage the large increases in aid required to meet the 0.5 per cent target. There have been criticisms of Ausaid’s over-reliance on technical assistance, questionable priorities, waste and mismanagement. The new Minister for International Development will immediately institute an independent inquiry into Australia’s foreign aid program to investigate the allegations of waste and mismanagement and will be asked to provide clear recommendations on how to increase effectiveness and transparency in our aid delivery.

The Audit Office is one of those Canberra treasures that speaks truth about power by following the money trail. Its report last year said AusAID confronted considerable management challenges: a shortfall of expertise; country programs that don't have an agreed aid strategy; an inability to break away from traditional ways of delivering aid; and the agency had 'to make the delivery of aid more manageable and effective.'

The new golden consensus on aid can only be maintained if the gold is seen to be doing good.

Photo by Flickr user covilha, used under a Creative Commons license. 

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