Australia's 2017 budget: Takeaways for the aid program

Australia’s newly released 2017 federal budget offers some good news for the aid program: The aid budget will increase for the first time in four years, growing by 84.6 million Australian dollars ($62.3 million) forecast for 2017-18. For now, no aid money will be diverted to counterterrorism programs, as advocates feared on Monday.  

Total official development assistance is set to be 3.9 billion Australian dollars ($2.9 billion) for the coming year. Foreign Minister Julie Bishop announced the news, saying it would make Australia the 13th largest Organisation for Economic Co-operation and Development donor.

Yet the increases may only be temporary. Forward year forecasts included in the budget have aid increasing by another 97.6 million Australian dollars ($71.9 million) in 2018-19. After that, spending will remain steady until 2021-22, at which point 303.3 million Australian dollars ($223.2 million) are set to be diverted from ODA to other areas of the foreign affairs portfolio.

The exact details of this move are unclear, but speculation is already rife as to what this means. It is still possible that aid could be diverted to counterterrorism organizations. The Australian Security Intelligence Service, Australia’s overseas spy network, operates under the foreign affairs portfolio, meaning it could be directed here. Or it could be spent establishing Australian embassies and presences in new countries.

NGOs responded to the budget announcement with confusion and requests for more clarification.

“Off the back of swinging cuts worth 11.3 billion [Australian dollars] over the last four years, the aid budget is set to decline yet again,” Marc Purcell, CEO of the Australian Council for International Development, said following the budget release. “This is a further cut of over 300 million [Australian dollars] over four years.”

Tony Milne, Director of the Campaign for Australian Aid, agreed. “Not only has the Government reversed last year’s promise of small increases to the aid budget, but they are raiding the aid budget to fund ‘other priorities,’ such as their tax cuts for big corporates,” he said in a statement.

Based on what we know so far, here is a look at the winners and losers from the 2017 budget and beyond.

The winners

Humanitarian funding

Funding for humanitarian, emergencies and refugees was increased by 60 million Australian dollars ($44.2 million) for the coming year. This funding is set to boost the emergency fund, as well as resources to address protracted crises and strengthen humanitarian action.

DFAT

After suffering past budget cuts in global programs and administration, the Department of Foreign Affairs and Trade, the organization responsible for delivery of Australia’s aid program,  will see their coffers increase by 139.3 million Australian dollars ($102.5 million) — more than the total ODA provided to sub-Saharan Africa. This suggests DFAT’s strategy to outsource the aid program may finally have reached its limit, and internal aid staff can breathe a sigh of relief.

Multilateral funding

Multilateral organizations, including the Global Health Program and Global Education Partnership, will see increased funding totalling $58.5 million Australian dollars ($43 million) — though the increase is thanks to replenishment schedules that make this a larger paying year.

Still, concerns that Australia would reduce contributions were unfounded, making multilaterals an important winner in the budget.

Click here to view the new Devex interactive visualization of the Australian aid budget for 2017-18.

The losers

Australia’s relative generosity

The country’s ODA as a percentage of gross national income is set to decline. Australia’s ODA to GNI ratio currently sits at 0.23 percent. In 2017-18, this will drop to 0.22 percent. With the future freeze of ODA, generosity will continue to drop without a large future investment of funds into Australia’s aid program.

Direct country funding

Direct country funding from DFAT is set to remain steady to the funding provided in 2016-17. By not increasing with the rate to accommodate inflation, this represents a cut in spending power. Sub-Saharan Africa, for example, will maintain steady direct funding of 31.8 million Australian dollars ($23.4 million) from DFAT.

Nyol Gor, a South Sudanese refugee who has been living in Australia for ten years, told Devex that Australia and other donor nations should not turns their backs on the region in the midst of a famine crisis. “This is a personal story for me,” he said, explaining that through the support of countries such as Australia, he was able to leave the life of a refugee and create opportunities in his new countries. “We need to hold out our human hands to others — especially children. It is not the fault of children who are suffering from famine, and we should not be denying them the right to better food, nutrition, water and shelter.”

The in-between

Disability

Despite the Australian aid program’s strong policies on disability-inclusive development, funding for crossregional programs targeting disability remains stable, at 12.9 million Australian dollars ($9.5 million).

Erin Ryan, executive officer for the Australian Disability and Development Consortium, told Devex her organization is disappointed with this result. “It looks likely that this is yet another year in which people with disability are left in a state of uncertainty,” she said. “It’s disheartening to realize that while DFAT implements incredible work, our political leaders likely won’t grant people with disability the certainty of this work continuing. It’s only 12.9 million [Australian dollars] per year, but unfortunately the political currency of disability-inclusive development is even less than this.”

Gender

As with disability, the gender fund will hover steady at 55 million Australian dollars ($40.5 million).

Michelle Higelin, executive director for ActionAid Australia, told Devex this was insufficient, given the foreign minister’s past indications that 80 percent of Australian aid investments should address gender issues — a target not yet met.

“It shows for us there needs to be greater gender transparency in the aid budget to understand where funds are being directed, and how they address the issues of women and girls,” she said. “We just don’t have this information.”

NGO and volunteer programs

NGOs and volunteer programs will see an increase of 5 million Australian dollars ($3.7 million) in the coming year. This is well below the rate of inflation. For NGOs in particular, the increase will provide them with little opportunity to expand programs to respond to growing global development issues.

“Yet again, our aid program has been viewed as disposable,” Nigel Spence, CEO of ChildFund Australia said in a statement. “This is despite the fact that we are living in a period of heightened global uncertainty — a time of worsening conditions for vulnerable children around the globe.”

For some NGOs, even existing programs may not be able to continue in the same form without changes and reductions.

For more information on the results of Australia’s 2017 federal budget on the aid program, engage with our new Tableau interactive.

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