Aid cuts make Australia 'a less generous nation'

Despite the election eve announcement by Australian Prime Minister Tony Abbott that the government’s AU$4.5 billion ($3.96 billion) reduction of the official development assistance budget was “not cutting [foreign] aid, just slowing the rate of increase”, the administration confirmed on Saturday that it is cutting $625 million from the 2013-14 aid program.

This will also make the 2013-14 aid budget $107 million smaller than in 2012-13 — marking the first time Australia’s aid budget contracts since 2000, when Australia signed on to the Millennium Declaration. In confirming these cuts, the Abbott government also finally confirmed — after almost five months in office — which countries, regions and programs will be affected. In short: all of them.

Allocations for all regions and all program areas (governance, infrastructure and rural development, disability, education, health, water, sanitation and hygiene, environmental sustainability) will be slashed. Aid to a small number of countries will be kept at or near the 2013-14 budgeted level — particularly Papua New Guinea and Nauru, both of which Australia relies on to deliver its offshore refugee processing and resettlement policies, as well as the Philippines, which last November suffered the devastation of Typhoon Haiyan — but all regions, every global and cross-regional program, and virtually every country will be affected by large aid cuts.

Africa, regional programs axed

Aid to Sub-Saharan Africa, where the world’s poorest people are to be found, is being cut by almost half from a budgeted level of $224.9 million to just $133 million — vastly less than the $211.2 million that was invested there in 2012-13.

There has been a long debate within the government and the aid community about whether Australia should maintain an aid program in Africa. It is obviously desirable to retain a regional focus for Australian aid — and indeed, around three-quarters of Australian aid is disbursed in Asia-Pacific, so there is no real danger of this regional focus being lost. However, geographical and community linkages between Australia and Africa do exist, as we are neighbors across the Indian Ocean, and Australia’s experience in dryland agriculture is widely recognized as a relevant contribution Australia could make to food security and agriculture development in many African nations. Yet now it seems that the niche aid engagement the previous government was building by seeking to rejoin the International Fund for Agricultural Development and seek membership in the African Development Bank is likely to be further scaled back.

Australia’s contribution toward dealing with humanitarian and other emergencies as well as global refugee support has been cut by $75 million, from $339.6 million in the May budget to just $264.2 million. Funding for regional and global environmental and climate change programs has been reduced to just $500,000 — whereas $91.6 million was invested in this type of aid in 2012-13.

Asia-Pacific is the most disaster-prone region in the world. In a 2012 report, UNISDR found that it suffered $294 billion of economic losses from disasters (80 percent of global disaster losses) in 2011 — and our near neighbours are particularly vulnerable to floods and cyclones that are intensified by climate change. In that light, these cuts seem particularly counterproductive if the government’s aim is to prioritize poverty reduction and development in our backyard. It seems we are both less committed to helping prevent disasters and less committed to responding to them when they happen.

Broken promises

The administration’s commitment to now set the aid budget on a path of nominal increases (but no real growth) in line with the inflation rate is a disappointing move after the bipartisan commitment to increase aid to 0.5 percent of Gross National Income which held from 2007 until 2012. But if the Abbott government remains true to its word then this at least provides some welcome certainty as to the funding level of aid, $5.042 billion in 2013-14, after several years of budget revisions, re-prioritizations and these mid-year cuts. Hopefully the macro-level uncertainty around the size of the aid budget is now at an end.

However, a significant amount of uncertainty about Australia’s aid budget remains. Although the weekend announcement revealed which countries, as well as which regional and global programs, would be cut — particular projects that will be affected or will not proceed have not been identified.

Furthermore, as part of the cuts, even Australian aid groups who had won a competitive tender process to deliver some of the government’s official aid program (under a scheme called the AusAID–NGO Cooperation Program), and which had signed multi-year funding agreements with the administration, had their funding cut more than halfway through the financial year. These organizations had already received letters directing them not to invoice the government for funding that had been committed under the ANCP, indicating that up to 20 percent of the promised funding was still being assessed.

In all cases, the funding cuts to these NGOs were less than this 20 percent threshold, although the amounts would total several million dollars. However, it is extremely disconcerting that the administration would breach its own funding agreements in this way.

These Australian aid partners — including CARE, Plan, Caritas and World Vision — had been recognised as well-performing organizations, able to help deliver effective aid in often difficult circumstances. These aid groups themselves had entered into partnership arrangements with communities and CSOs on the basis of what they reasonably assumed was secure funding from the government, only to find the rules of the game changed at the last minute — leaving them in the difficult position of having to either breach their own commitments to their own partners and to poor communities, absorb the cuts and find savings across their already very stretched organizations, or call on the Australian public to make up the shortfall left by the government.

What’s in store for 2014

We can only hope that this breach of trust is not repeated and that in the new year, Australian aid implementers and the Department of Foreign Affairs and Trade, which has absorbed the former AusAID, will be able to develop a positive and effective relationship that draws on the capacities and contributions of each.

So we are left with many uncertainties as we enter 2014. We don’t yet know how the ANCP and NGO funding will be dealt with in the new DFAT structure. We don’t know how the Abbott government’s avowed development aid priorities — aid for trade, infrastructure development, empowerment of women and girls, health and education — will be reflected in the 2014 budget, and what there will be less of to make way for more of these things. We don’t know if or how the government might use the flexibilities within the definition of official development assistance to boost its reported ODA level — particularly reporting more asylum seeker support or the use of military personnel and equipment to deliver humanitarian and development aid.

Overall, though, to me some things are very clear. These cuts make us a less generous nation. They harm the urgent and ongoing work of tackling the scourge of extreme poverty by undermining the predictability and effectiveness of our aid-supported development programs. And by reducing our contribution to meeting regional and global challenges — particularly environmental sustainability and climate change — they fail to advance Australia’s interests in reducing poverty and building a more secure, sustainable and prosperous world.

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