Australia’s aid budget has doubled in recent years and is set to double again in the next five years.

Canberra was warned by its own Treasury in recently released documents that simply scaling up existing aid activities won’t deliver value for money … especially in the Pacific, where a quarter of all Australian aid now goes.

So the Foreign minister Kevin Rudd has said that it’s prudent to do a review now, though aid monitoring groups say there’s a lot to do to ensure transparency, accountability and a focus on poverty.

Presenter: Canberra Correspondent Linda Mottram

Speakers: Kevin Rudd, Australia’s Foreign Minister; Marc Purcell, Australian Council for International Development; Gary Lee, AidWatch; Tim Costello, World Vision Australia; Julia Newton-Howes, CARE Australia

MOTTRAM: Under continued fire about transparency and effectiveness, the Labor government in Canberra has already reviewed several aspects of its aid program, in particular the much-criticised use of technical advisors. They’ve been wound back in Papua New Guinea and East Timor and are likely to be so in Vanuatu and Solomon Islands. But Canberra was warned by its own Treasury earlier this year that much more needed to be done, especially since the aid budget’s set to double by 2015 to eight-point-six Billion dollars. Simply scaling up existing activities, Treasury warned, would not deliver value for money. Now the Foreign minister Kevin Rudd has announced a complete, independent review of aid effectiveness

RUDD: The key thing is where do we most effectively reduce poverty, where do we most effectively create the conditions necessary for self-generated economic growth in the future. That’s what we’re committed to doing under the Millenium Development Goals and they apply as much regionally as they do globally.

MOTTRAM: The review’s to be conducted by an independent panel including development economist Doctor Stephen Howes, former Liberal Senator and NGO affiliate Margaret Reid, former senior diplomat in Indonesia, Papua New Guinea and at the UN, Bill Farmer, and business figure John Denton who also focuses on trade and refugees. Another former top bureaucrat, Sandy Holloway will chair proceedings.

NGO’s quickly welcomed the review. And Marc Purcell, the executive director of the umbrella group, the Australian Council for International Development, says its vital that the overall focus of the aid budget be poverty alleviation.

PURCELL: A clear program that focuses on the poorest in the world ensures that Australian aid goes to least developed countries in the world and achieves targets in getting to the bottom 20 per cent of populations in the poorest countries.

MOTTRAM: While that may seem to be obvious, critics say that Australia’s aid is distracted from exactly that goal by a continuing national interest condition for aid. Gary Lee is spokesman for the aid monitoring group, AidWatch.

LEE: One clear example I think from the current aid budget is a certain amount of money was set aside that is being spent from other government departments for which the aid budget itself does not provide detail but one of these expenditures is to be spent by the immigration department supporting to control irregular immigration from Indonesia as well as funding to upgrade detention facilities. To me this is not about development or poverty alleviation but is being driven by Australia’s border security issues.

MOTTRAM: But Gary Lee says its unclear whether the review’s terms of reference will include consideration of this issue.

There’s also continuing concern that, as reported by the Australian National Audit Office last year, 70 per cent of Australia’s bilateral aid programs is delivered through 20 of Australia’s largest private aid contractors .. with five of those companies managing over one Billion dollars worth of contracts .. often subject to secrecy under commercial in confidence agreements.

The NGOs have quickly seized on the opportunity of the aid effectiveness review to argue that they should be given responsibility for delivering a greater share of the aid pie. Tim Costello is the CEO of World Vision Australia.

COSTELLO: NGOs with a footprint of our staff in the poorest areas, often the most difficult areas, should probably receive in this review attention about our slice of that aid pie.

MOTTRAM: And its not just about where the NGOs work, but also about their motivation, Marc Purcell says.

PURCELL: We have much lower overheads we’re not for profit organisations so we’re not in it to make a buck we’re in it to make a difference.

MOTTRAM: And if poverty alleviation is to be made the top priority, over national interest, the Chief Executive of CARE Australia, Julia Newton-Howes, says the focus has to be on women.

NEWTON-HOWES: They’re actually the most effective way to reduce poverty.

MOTTRAM: With the aid budget set to grow so dramatically, there are not only questions about how and where to best deliver it, but also about the bureaucratic arrangements supporting it. There’s a push to make AusAID a separate Australian government department with its own minister, rather than continue to be subsumed under the Department and the minister for Foreign Affairs. Julia Newton-Howes has hinted that change is needed.

NEWTON-HOWES: As the aid program becomes one of the largest part of government expenditure, it becomes a very different matter of how to deliver that compared to a decade ago when the government was delivering a much smaller program.

MOTTRAM: The aid effectiveness review is expected to take five months.

Listen to story

Subscribe to AID/WATCH Enews

Join our mailing list to receive the latest AID/WATCH news and updates

Share This