The future of Australian aid: 5 issues where the election matters

Tony Abbott, leader of the opposition in the Australian House of Representatives and Kevin Rudd, incumbent Australian prime minister. Photo by: Troy Constable / CC BY and Eva Rinaldi / CC BY-SA

In a little under two weeks, Australians head to the polls to elect a new government. Tony Abbott is strongly favored to return the Coalition  a center-right political alliance  to power after six years.  

Despite early signs of a tight contest, Prime Minister Kevin Rudd’s Labor government is still running behind in the opinion surveys. Rudd reclaimed the post of prime minister in June after wresting the leadership of the Labor Party from Julia Gillard, who had ousted him from office back in 2010.

Dominated by hot-button economic issues as well as concerns over asylum seekers, the bitterly divisive campaign for Australia’s next government has deeply polarized the electorate. On the future, however, of Australia’s AU$5.7 billion ($5.6 billion) billion foreign aid program, the two sides have found considerable common ground.

Most notably, both Labor and the Coalition have pledged to continue growing Australia’s aid program  and also maintain its focus on Asia-Pacific. Australia has been one of a handful of donors that have significantly increased aid spending in spite of the global financial crisis.

Both parties have likewise given their backing to the Australian Agency for International Development’s drive for aid effectiveness and value-for-money, and also committed to ministerial representation for the aid and development portfolio. In July, Rudd appointed Australia’s first aid minister in 17 years.

However, Labor and the Coalition don’t see eye-to-eye on a number of issues critical to the direction of Australian aid.

Deadline for 0.5 percent target

In its platform for the upcoming elections, the Labor Party reaffirmed its pledge to contribute 0.5 percent of gross national income towards official development assistance by 2017-18. After leading his party to power back in 2007, Rudd became the first to commit Australian prime minister to commit to the 0.5 percent aid spending target. Citing an increasingly uncertain fiscal outlook, the Gillard government twice postponed the target from its original 2015-16 deadline.

The Coalition has also promised to increase Australian aid spending to 0.5 percent of GNI. However, after initially joining Labor in setting a 2015-16 deadline for the 0.5 percent aid spending target, the opposition party has since been reluctant to commit to a firm timetable. Abbott has indicated that if elected, the Coalition could set a new deadline for the 0.5 percent target after conducting a review of the country’s finances.

Climate finance

Announced by Rudd when he was Gillard’s foreign minister, the Australian government’s 2011 aid policy calls climate change a “major development challenge” and pledges its continued support for action on climate change in developing countries. Earlier this year, the Gillard government revealed that it had met its commitment to contribute nearly 600 million Australian dollars in fast-start climate finance to Asia-Pacific, Africa and the Caribbean between 2010 and 2013. Roughly a tenth of Australian aid spending is currently allocated to climate change and environment programming.

The Coalition has been scathing in its rebuke of the Labor Party’s backing for climate finance — representing perhaps the starkest contrast between the two sides’ positions on the Australian aid program. In December, deputy opposition leader and shadow foreign affairs minister Julie Bishop said that “climate change funding should not be disguised as foreign aid funding” and said that a Coalition government would zero out aid spending on climate finance. In the past, Abbott himself had expressed skepticism over the science behind climate change but has since retreated from those claims.

Papua New Guinea

On August 2, the Rudd government announced plans to direct an additional AU$420 million in aid to Papua New Guinea over the next four years. Nearly half of the aid package has been slated for the reconstruction of a hospital in Lae, Papua New Guinea’s second-largest city. Only in May, the Gillard government had intended to maintain Australian aid spending for Papua New Guinea for 2013-14 at roughly the same levels as last year.

The Coalition was quick to pounce on the additional aid money for Papua New Guinea — currently the second-largest recipient of Australian aid — as a quid pro quo for Port Moresby’s July agreement with the Rudd government to accept asylum seekers bound for Australia. Abbott called the aid package a “free gift” while Bishop claimed that the government of Papua New Guinea was expecting a “bonanza” in Australian aid. Last year, Bishop said that a Coalition government would be keen on transforming Australia’s relationship with Papua New Guinea from “aid donor-aid recipient to an economic partnership based on mutual benefits.”

Aid money for domestic expenditures

In May, foreign minister Bob Carr revealed that for the second consecutive year, Canberra would divert AU$375 million from its aid budget for domestic asylum seeker costs. Carr argued that the move was in line with the Organization for Economic Cooperation and Development’s reporting guidelines for aid expenditures. The Labor government’s diversion of aid money for domestic asylum seeker costs set off a barrage of criticism from Australian aid groups. As a result of the diversion, a number of analysts say that Australia has since become the third-largest recipient of its own foreign aid. The Coalition has indicated that if elected, it would not spend Australian aid money on domestic asylum seeker costs.

The Coalition has also been under fire  including from Carr  for its own plans to divert aid money to fund domestic expenditures. In June, the Coalition revealed that it would set aside a portion of Canberra’s aid budget for tropical health and medical research in northern Australia with the aim of meeting’s “Australia’s neighborhood foreign aid obligations.” Earlier this year, a leaked Coalition discussion paper suggested that the amount diverted for those purposes could reach AU$800 million.

Funding for abortion-related services

In 2009, the Rudd government overturned a 13-year-old policy imposed by the previous Coalition government which had barred AusAID from funding abortion-related services. Rudd had expressed his personal opposition to rescinding the policy but said that he would yield to the wishes of his fellow Labor MPs. Rudd’s decision followed a similar move just months before by the Obama administration in the United States. In the years since, AusAID has resumed its support for abortion-related services provided by NGOs in countries including Tanzania, Uganda, Cambodia and East Timor.

Heading into this year’s election, the Coalition has been adamant that it has no plans to reinstate restrictions on AusAID funding for abortion-related services. Yet under pressure from its right flank, the Coalition could reconsider its position on the issue once in government, some commentators in Canberra say. In August of last year, a group of Coalition senators publicly registered their objections to AusAID’s support for abortion-related services.

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About the author

  • Piccio

    Lorenzo Piccio

    Lorenzo is a contributing analyst for Devex. Previously Devex's senior analyst for development finance in Manila, he is currently an MA candidate in international economics and international development at the Johns Hopkins School of Advanced International Studies in Washington. Lorenzo holds a bachelor's degree in government and social studies from Wesleyan University.