CANBERRA — On Tuesday in Canberra, Australia’s federal budget for the 2018-19 financial year will be released. Previous comments from the Minister for International Development and the Pacific Concetta Fierravanti-Wells indicate that there will be no changes from the previous forecasts to 2020-21. But there are no promises beyond that. With the Department of Foreign Affairs and Trade staff indicating to the sector that cuts are being modeled, there are further fears of budget cuts.
Ahead of the budget release, new information in the “Performance of Australian Aid 2016-17” report published on May 4 provides the program’s budget performance.
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Analyzing the 2016-17 financial year data is important for Australian aid insights — this was the year the budget forecast of 3,827.8 million Australian dollars ($ 2,873.6 million) for Australia’s aid program was predicted to reach a low point, based on value, as part of ongoing aid budget cuts. In reality, Australia’s official development assistance for the 2016-17 financial year was AU$4,033 million — an AU$206 million overspend.
Regardless of the final figures, this new data provides insight into the changing directions of Australian aid and priorities under the coalition government — as well the changing face of partners for DFAT in the delivery of Australia’s ODA.
Priorities by region
By region, Papua New Guinea was the largest recipient of Australia’s aid for 2016-17, receiving a total of AU$550 million — slightly less than the forecast spend of AU$558 million. Effective governance was the main regional priority, with AU$220 million invested for the year.
Indonesia received the second largest contribution of Australia’s ODA, with a total of AU$360 million. Education was the priority sector in this region (AU$105 million), followed by governance (AU$95 million).
Between second and third, however, there was a large drop in assistance: Solomon Islands was the third largest recipient of Australia’s ODA, receiving AU$155 million in support. Almost half was directed toward governance programs.
For regions in sub-Saharan Africa, Palestinian territories, and North Africa and the Middle East still receiving Australian aid during the 2016-17 financial year, the majority of funds went toward supporting humanitarian assistance, social protection, and disaster risk reduction programs.
Individually, the Maldives received the lowest contributions from the Australian aid program at $3.7 million. Almost all was for education assistance.
The newest iteration of Australian Volunteers for International Development will maintain its development focus linked to the strategic objectives of the Australian Aid program, but will increase the diversity of volunteers with a new inclusion strategy.
The distribution of volunteers contributing to the Australian Volunteers for International Development program shows a slight shift in assistance priorities. With a total of 1,212 volunteer-supported programs in developing countries for the 2016-17 financial year, countries of priority included Indonesia (168 volunteers), Fiji (102 volunteers), and Vanuatu (96 volunteers).
The volunteer data also reflects the declining influence of sub-Saharan Africa in Australia’s aid program. While in 2014-15, a total of 239 volunteers supported programs in 12 countries, 2016-17 saw this drop to 68 volunteers in three countries — South Africa, Swaziland, and Tanzania.
Priorities by sector
By sector, governance was the priority for Australian aid during the 2016-17 financial year, worth AU$803 million. Funding to the sector increased from the previous year — and within its allocation were AU$76 million for governance supporting mining and mineral resources.
Infrastructure, trade facilitation, and international competitiveness was another growing area for the 2016-17 financial year, rising from AU$674 million in 2015-16 to AU$704 million. The growth was driven by increased funding supporting banking and finance, energy, and projects in the “other” category. But there were some areas of the infrastructure, trade facilitation, and international competitiveness category that reduced as an ODA priority for Australia, including large water infrastructure, trade policy, and transport.
Education was the third largest sector funded, with a total of AU$679 million for the year. But this was still a drop of AU$26 million from the previous year, when it was Australian aid’s second largest funded sector.
Health as a sector saw a concerning drop of funds in 2016-17. Water, sanitation, and hygiene programs increased by AU$20 million, to AU$70 million, but general health programs dropped by AU$136 million, to AU$391 million. Since this time, the Indo-Pacific Centre for Health Security has been launched, with a refocused priority on regional health within Australia’s aid program
Climate is certainly an area that has limited visibility in Australia’s aid program. For the 2016-17 financial year, AU$249 million was directed to climate finance program. More than half went to global programs, while AU$95 million was spent on programs directly in PNG and Pacific Island countries. Only AU$867,000 supported direct climate projects in sub-Saharan Africa.
While climate was a low priority, gender was high on Australia’s aid priorities. More than AU$2 billion was spent on programs that partially or wholly supported gender equality through social infrastructure and services, economic infrastructure, agriculture, industry, trade and tourism as well as humanitarian assistance. Gender equality funded programs accounted for 51 percent of Australia’s total ODA for 2016-17.
Changing partners for the aid program
The annual statistical summaries from the 2011-12 financial year onward allows an analysis of the changing trends in the aid program, including DFAT’s implementing partners.
During this time period, NGOs and developing governments have decreased in their contribution to the delivery of the aid program, while private sector partners have increased.
In 2011-12, 14 percent of the funding by, or in, collaboration with aid program partners were distributed by NGOs. By 2016-17, NGOs’ contribution to the delivery of the budget declined to 11.3 percent. Despite this drop, the 2016-17 figure was a rise from the previous year, where the contribution from NGOs accounted for just 9 percent of Australia’s ODA.
The role of developing governments as Australian aid partners has also been in decline since 2011-12. AU$372 million was distributed via developing government partners, accounting for 9 percent of the budget in 2011-12. By 2016-17, money spent through developing governments dropped by 65 percent, with them accounting for just 3.3 percent of the 2016-17 aid budget spend.
Funding through multilateral organizations remained relatively steady for this period of time — between 37 percent to 43 percent of total partner spend, with a just 1 percent decline in allocated budget.
But funding through commercial suppliers have been on the increase — rising from 17.1 percent to 21.3 percent, and increasing approximately AU$151 million, to $859 million. The priority area for funding through commercial partners in 2016-17 was governance, followed by education programs, then infrastructure and trade facilitation.
In comparison, funds distributed via NGO partners were primarily spent on humanitarian assistance, disaster risk reduction, and social protection, followed by health programs.
Looking to the 2018 budget
The federal budget coming out Tuesday will reveal Australia’s aid directions under a Coalition government to 2021-22 — and it will be in the forward forecasts where further cuts may be possible.
Stay tuned as Devex will be providing insights from the budget night and what it means for the development sector and aid program partners.