Key takeaways from Australia's 2018 aid budget

CANBERRA — The Australian aid budget got a slight boost Tuesday night, rising by 190 million Australian dollars ($141 million), for a total of 4.2 billion Australian dollars ($3.12 billion) in official development assistance for the 2018-19 financial year.

The budget is an increase on the previous year’s forecast of AU$4.01 billion, but still falls far short of what the development sector had urged.

While no cuts were evident, it was considered a lost opportunity. CARE Australia Chief Executive Officer Sally Moyle called the result “parsimonious.”

“It’s a C-minus effort,” Marc Purcell, CEO of the Australian Council for International Development, told Devex. “Despite years of economic growth, this budget has Australia hanging out with Greece and Hungary in OECD rankings.”

We have analyzed the papers to determine the key winners, losers, and those in between.

The winners

Papua New Guinea and the Solomon Islands

News of Australia funding an undersea high-speed internet cable between Australia, Papua New Guinea, and the Solomon Islands did not come out of country programs as first expected. In fact, both countries will see direct funding topped up to ensure development programs in the regional are minimally impacted.

PNG’s allocation in the aid budget will increase by almost 10 percent, while the allocation for the Solomon Islands will increase by 58 percent. PNG maintains the highest direct regional funding from Australia at AU$519.5 million, or 12 percent of the total aid budget.

Regional Pacific

The 2018 budget is the first released by the Australian Department of Foreign Affairs and Trade since the 2017 Foreign Policy White Paper. The white paper provided a strong focus on the Indo-Pacific region as part of Australia’s national security agenda — and so too does the new budget.

New programs include the Pacific Labour Scheme to expand labor mobility options; the Australian Pacific Security College to provide high-level training for security and law enforcement; and the Pacific Agreement on Closer Economic Relations Plus readiness program, which provides assistance for countries signing up to the trade agreement.

In total, the Pacific will receive almost 31 percent of Australia’s ODA in 2018-19 — and programs supporting the region will receive an increase of AU$40 million, for a total of AU$206.9 million in direct funding.

New development partners

A new small grants program worth AU$10 million was announced in the budget, encouraging new development partners to consider working with DFAT to deliver Australia’s aid program. This includes service clubs, faith groups, local councils, and diaspora groups.

The scheme was developed following an Australia-wide consultation for the 2017 Foreign Policy White Paper, which found that a range of organizations supporting international development don’t yet collaborate with DFAT. The scheme aims to create diversity in partners and encourage more Australians to support the development assistance.

Unlike NGOs currently working with DFAT, there will be a reduced due diligence requirement on grant recipients, but child protection policy will be among the requirements still enforced.

The losers

Indonesia and Cambodia

The boost to assistance for PNG and the Solomon Islands came at a toll for Indonesia and Cambodia. As growing economies, both are transitioning to a partnership approach between Australia and their governments, and as such, both had allocations reduced, with some of that money presumably allocated for the undersea cable between Australia, PNG, and the Solomon Islands.

Indonesia and Cambodia will each see a 10 percent reduction in direct funding from 2017-18, but DFAT still acknowledged there is much work to be done in these countries, especially given health priorities in the regions.

How these cuts will impact programs in Indonesia and Cambodia is yet to be determined, with DFAT beginning discussions soon on programs that can be reduced or cut entirely.

Disability

Disability maintains its direct funding of AU$12.9 million — but it is missing as a program line item. Its lack of visibility is concerning, particularly following information that DFAT was modeling potential cuts to this sector.

Purcell explained to Devex that disability has always struggled in terms of the dollar amount associated with it. And for DFAT, if it’s not identifiable, it’s often not a priority.

“The government may say that it is in the fine print, but it needs to be printed [to] show that Australia has a real commitment to disability inclusion,” Purcell said.

Australia’s generosity

Forward estimates predict Australia’s aid budget will be at its lowest levels by the 2021-22 financial year. The proposed budget for that year is AU$4 billion — just 0.19 percent of gross national income, meaning Australia will be spending just 19 cents out of every $100 on foreign aid.

“This budget lacks vision for a fairer world,” Jody Lightfoot, director of campaign for Australian Aid, told media. “The character of a nation isn’t based on how you treat the big banks, but how you treat the most vulnerable. Australia should be stepping up to tackle global inequality. Instead, the government will reduce aid to its lowest level ever to give big corporations a tax cut.”

Lightfoot was particularly frustrated that the budget results were accompanied by the announcement of a AU$3.8 billion loan scheme designed to increase Australia’s position as a global supplier of military weapons.

The in-betweens

Sub-Saharan Africa and humanitarian assistance

Sub-Saharan Africa maintained direct funding of AU$31.8 million for the coming financial year, the same as the previous budget. Through multilateral programs and humanitarian assistance, total allocation to the region will increase to AU$121 million.

Humanitarian assistance will also see a 2.5 percent increase from 2017-18, with just under AU$410 million allocated to support global humanitarian responses, preparedness, and refugees.

But for both sub-Saharan Africa and humanitarian assistance as a whole, the global need is far more than Australia’s budget allocations. And while neither area has seen a budget cut, many in the sector are still questioning whether Australia is doing its fair share as a global citizen.