After months of speculation, the Australian government finally shed some light and provided details to its foreign aid cuts — a dreaded and long-awaited clarification for several local and international NGOs dependent on these funds to continue their development work.
The specifics, announced on Saturday by the country’s foreign affairs and trade ministry, revealed an almost AU$650 million (about $571 million) slash to the official development assistance budget, affecting several bilateral and multilateral development assistance programs — with Africa and the Middle East suffering the biggest blow with a 39 percent reduction to almost AU$200 million this year, from AU$329 million the past year.
This move to cut ODA to some of the poorest nations in the world, according to a local NGO alliance, is a true disappointment.
“We are disappointed with the government’s announcement of where the cuts will fall. This is not merely number crunching in attempt to find a budget surplus. It is the world’s poorest people — in many of Australia’s neighboring countries — who will feel the brunt of these decisions,” Joanna Lindner Pradela, acting executive director of the Australian Coalition for International Development, told Devex.
Despite Foreign Minister Julie Bishop’s promise for renewed strategic focus on Asia-Pacific, regional development assistance earmarked for these nations dropped by 0.3 percent to $2.24 billion from $2.25 billion. Of the three sub-regions, only East and Southeast Asian nations got increased funding to $1.03 billion from $977.4 million. Both the Pacific and South and West Asia generally declined to $882.2 million and $332.8 million, respectively.
The overall budget is over $5 billion, with an increase rate pegged to the country’s Consumer Price Index to ensure that Australians and the rest of the world will get the most effective outcomes from the aid coffers, noted Bishop.
The announcement came at the heels of several drastic changes made by the government in its four-month tenure in office under Prime Minister Tony Abbott, including the integration of AusAID into the foreign affairs ministry and the dissolution of the AusAID graduate program, to name a few — which the opposition Labour party consider another blow to the future of Australia’s international development commitments.
“I am concerned about these cuts. First, it highlighted the fact that the Abbott government does not regard helping the poorest nations as a priority,” MP for Canberra Gai Brodtmann told Devex. “Not only did it cut the agency responsible for foreign aid and the AusAID graduate program, preventing dozens of talented young Australians from beginning their careers on foreign aid, it also cut vital aid to its very own region.”
She added: “I’m concerned about what these cuts will mean to Afghanistan which is relying on foreign aid to ensure stability as it transitions. I’m also concerned what it will mean to women and children to protect them from violence, to ensure they have access to education and to provide them with financial independence.”
Budget for humanitarian and emergency response was also cut by 16 percent to $137.4 million from $163.3 million the past year. This is amid occurrence of some of the most devastating disasters in recent memory that requires humanitarian aid including Haiyan in the Philippines.
Aid cut details: Literally a glimpse
Although the details have been announced, local and international NGOs agree the numbers don’t say much on the ground level — they are just a glimpse or a single pixel of the whole Australian aid picture.
Brodtmann said the concern is still uncertainty, as humanitarian groups are still in the dark whether they will continue to receive money for the next 12 months or they have to start making contingency plans and, worse, lay off staff and close shop.
International groups like World Vision, Oxfam, CARE and Plan International were unanimous in saying the announcement is a big setback to Australia’s international development endeavors and lacks several crucial details that may be detrimental, not only to their operations, but also to the development of the people they are helping.
“There has been an overall announcement of the real occasions on the basis of country and sector. That represents refocusing towards the Asia-Pacific region, predominantly, and some are refocusing away from multilateral institutions,” Andrew Johnson, World Vision Australia head of government relations, told Devex. “But there are plenty of data still needed to emerge on the program level. We certainly have more details now than the last 3 or 4 months but there are still more things to clarify.”
CARE Australia spokesperson Tom Perry added: “While we seek further details on the nature of these cuts to the 2013-2014 funding, we know that will be required to make a number of difficult and urgent decisions about programs which may be affected by these cuts.”
NGO wounds were cut deeper with the release of the details, considering the government’s pre-election promise of not cutting their assistance. The budget to increase the fight against climate change and environmental programs was sucked dry — from $17 million to $500,000. Contribution to global environment programs, on the other hand, is now nothing compared to $74.6 million under the previous administration.
World Vision Australia saw 7 percent or $3 million of their core funding partnership with the government called the Australian-NGO Cooperation Program gone. And this is just the start of the long list of local and international groups under the guillotine.
“Prior to the election, this government committed reprioritizing aid funding to Australian NGOs, in recognition of their experience and track record of effectively working to assist many of the world’s poorest communities tackle extreme poverty head on,” said Pradela. “Yet in the government’s announcement, many of these agencies have also been subject to cuts.”
Priorities in the balance
Bishop explained the way the budget is structured is to ensure it is focused on alleviating poverty, economic growth, empowering women and girls, better educational outcomes and better health outcomes which will make Australians proud — an idea NGOs are not quite convinced about.
Given the announcement, Johnson stressed the government’s clear priority is strategic economic development at the expense of Australia’s responsibility to be a leading figure in international development.
“We’ve been particularly concerned about the priorities of the Abbott government on foreign aid. The aid budget had significant reductions over the forward estimates. Many of the savings in the budget in the past two years have come from aid,” he explained. “We still think there’s a great need in Africa and we think Australia has a big role to play in the region in relation to aid, so we still want greater investment in Africa despite the government has made Asia-Pacific a priority.”
Senator Penny Wong, acting shadow minister for foreign affairs and international development, concluded in a statement that the Abbott government’s cuts put at risk both the aid program’s goal of enhancing global prosperity and Australia’s own security.
Lean Alfred Santos is a Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. Prior to joining Devex, he covered Philippine and international business and economic news, sports and politics. Lean is based in Manila.