Is the Australian Aid budget being cut again?

An AusAID staff unloads emergency relief supplies in Samoa. Photo by: Owen Martin / AusAID / CC BY

CANBERRA — With a little over a month until the 2018 budget is released in Canberra on May 8, new concern has been raised that Australia’s aid budget may be reduced by 10 percent, or 400 million Australian dollars.

The Department of Foreign Affairs and Trade has been telling implementing partners — including NGOs — that internal modeling is investigating where the proposed cuts can be made, confirmed the Shadow Minister for International Development and the Pacific Senator Claire Moore. From the information being received, NGOs believe the aid program is once again at risk.

Key insights from the OECD review of Australian aid

The Organization for Economic Co-operation and Development have had their say on Australia’s aid program, its first development cooperation peer review conducted under Australia’s coalition government — and the first review following the 2013 integration of AusAID into the Department of Foreign Affairs and Trade. And Devex has the key insights from their review.

According to a report in Australian media on Thursday, the bulk of the modeled cuts are for Southeast Asian countries that have reached middle-income status, including Indonesia. But cuts to entire sectors are on the line, with NGO representatives telling Devex that disability is being modeled to be excluded.

The Minister for International Development and the Pacific Senator Concetta Fierravanti-Wells told Parliament on Wednesday that the budget will be maintained for the 2018 and 2019 budgets.

“This government has stabilized our overseas development assistance budget. We've actually increased it,” she told the Senate. “We are maintaining our overseas development assistance budget at about AU$4 billion over the next two years.” Her statement supports the comments from Foreign Minister Julie Bishop, following the release of the 2017 budget.

But beyond those two years, there are no guarantees for the aid program — and even with her statement, NGOs are in a panic that cuts may be immediate.

Development in a state of confusion

The phone calls started to Moore on Monday night. People in the development sector were upset and certain that something was happening. But to date, Moore has not received confirmation from DFAT on what is happening.

“It’s not unusual to ask any government what they are going to do in the budget and they say they won’t tell you,” she explained to Devex. “It’s kind of a convention that you don’t say anything until the budget happens. But there just seems to be too much on at the moment to make you in any way confident that this is not going to happen. It’s devastating — absolutely devastating.”

While DFAT may be modeling cuts, the final decisions are made by The Treasury and Treasurer Scott Morrison. Moore believes that the budget negotiations may not be the will of impacted ministers.

“It’s absolute frustration and I think that frustration would be shared by Connie [Concetta Fierravanti-Wells],” Moore said, adding that any modeling is against the themes established by Fierravanti-Wells at the Australian Council for International Development annual conference in November, where she spoke of increasing aid expenditure and increasing support for the Indo-Pacific region.

“To have less than 12 months later — one budget later — rumors that there are going to be further cuts, it is disappointing,” Moore said. “We don’t know the details, but it seems like an efficiency dividend on aid: 10 percent across the board. But how do you do that?”

Arguments for cuts

The reports of the modeled cuts follow the release of an Organisation for Economic Co-operation and Development evaluation of Australian Aid. The report was critical of the impact budget cuts have had on aid effectiveness.

“You feel ashamed that this is our international reputation,” Moore said. “But on top of that, we don’t have an effective argument as to why it is necessary. If we were facing an absolute global financial crisis or if we were facing a plummeting budget, there may be justification. But the government certainly does not admit to that. They talk about increasing jobs, security, and employment. They are painting the picture of a strong economy and the country is doing well. They are alleged to be making this decision to cut international development at the same time they are saying the budget is strong.”

The only economic argument Moore sees is that the aid budget may be the victim of AU$30 billion tax cuts the government is proposing for big businesses operating in Australia. “And that makes it even worse,” she said. “If that is the major economic demand, and one way to get it is to cut international development, that makes almost a mockery of the OECD report. And the people from all over the country that have been lobbying for a fair aid program, their fears may soon be confirmed.”

Can Australian Aid afford further cuts?

In light of Australia’s commitment to the Sustainable Development Goals and release of Australia’s Foreign Policy White Paper, which highlights the importance of international development to Australia’s foreign policy, Moore cannot see room for any further cuts. And according to DFAT, the existing programs are delivering.

“We ask questions each senate estimates and we are told the aid budget is carefully evaluated,” Moore said. “We ask about programs. No one in the last three years has been thought to be inefficient and not working. There are areas where there needed to be more work put in or delays — including Port Vila Road, which was impacted by two cyclones and it didn’t get ahead — but to say a country like Vanuatu can afford to lose 10 percent of what they are receiving does not stack up.”

Moore said until she can see what DFAT may be proposing, it is hard to understand the full impact. But in even in growing economies, care needs to be taken for any proposed reduction of aid.

“If some countries are becoming more able to make economic decisions themselves, that could benefit their populations; that is fine, but it should be very clear that the areas the current aid program are working are going to continue to happen,” Moore said. “One of the worst things that could ever happen is to start something and stop it — it is almost as bad as doing nothing to begin with.

What to expect before May 8

Asked for details on the modeling and whether the department was considering cutting funds to the aid program, DFAT declined to comment. “The details of the 2018-19 Australian Budget will be announced according to the usual timeline,” a spokesperson for the DFAT told Devex.

Moore said that a cone of silence has descended over the government, and it will be difficult to get further communication on the issue. Despite the anticipated budget silence, CEO of ACFID Marc Purcell said the development sector wants to hear from the top of the government food chain on this issue.

“We need reassurances from the Prime Minister [Malcolm Turnbull] that the aid budget won’t be raided again on top of the 30 percent cuts we have seen since 2013,” he told media. “If we are to alleviate poverty to deliver regional prosperity and security for our region, and deliver on the White Paper, a strong and consistent aid budget is essential. We have an opportunity to use our aid program to build peace and security, but if we go down this path it's like we just don’t care.”

About the author

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    Lisa Cornish

    Lisa Cornish is a Devex Reporter based in Canberra, where she focuses on the Australian aid community. Lisa formerly worked with News Corp Australia as a data journalist for the national network and was published throughout Australia in major metropolitan and regional newspapers, including the Daily Telegraph in Melbourne, Herald Sun in Melbourne, Courier-Mail in Brisbane, and online through news.com.au. Lisa additionally consults with Australian government providing data analytics, reporting and visualization services. Lisa was awarded the 2014 Journalist of the Year by the New South Wales Institute of Surveyors.