Australia’s foreign aid budget is up from $3.8 billion to $4.3 billion next year.

Foreign Minister Stephen Smith says the change to a new international standard for calculating national income will deliver $2-3 billion more to aid in coming years, and that is on track to meet government aid funding goals.

‘Since we came to office we’ve effectively increased the development assistance budget by $1.2 billion,’ he said.

‘We are on track in a sensible, managed, scaled way to get to our election commitment, which is to increase our development assistance to 0.5 per cent of gross national income by 2015-16.’

The executive director of Oxfam Australia, Andrew Hewitt, is pleased by the increased funding.

‘The aid budget has been increased by over half a billion dollars. That demonstrates the Rudd Government s still sticking to its commitment to hit 0.5 per cent of gross national income by 2015-16,’ he said.

‘Spent well, that money will make a real difference to people’s lives in developing countries around the globe.’

Fudging on money?

Mr Smith has rejected some suggestions that in moving to a new international standard calculation of gross national income, the Government has pulled a sneaky $1 billion out of the aid budget.

‘Because of the changed calculation we have to book, under the budget rules, technically a saving,’ he said.

‘So technically it’s a saving but the reality is we see $500 million more spent this year [and] by the time we get to 2015-16 it will effectively be between $2.5 billion and $3 billion more that we will spend.

‘So we have an absolute commitment to get to GNI [gross national income] and we’re not going to deviate from it despite the fact the ultimate objective is now a larger one in dollar or volume terms than it was last year because of the changed calculations.’

Mr Hewitt says he is unconcerned about the calculation process, saying ‘in some ways it could mean more money will flow over time to overseas aid’.

Climate action

But aid groups are less impressed with another big ticket budget item – three so-called fast start programs that help poor countries adapt to climate change.

James Goodman from the aid advocacy group Aid/Watch says Australia’s new climate adaptation money for the poor is $119 million next year, and that is insufficient.

‘[That is] totally inadequate and secondly driven by self-interest,’ he said.

‘It is 0.0016 per cent of $75 billion that the World Bank says is needed. So clearly Australia is not living up to its responsibilities.’

But Mr Smith has defended the programs.

‘Firstly, it’s additional money, it’s new money. It’s not taking away from other programs – indeed as a general proposition, because we’re spending $500 million more, the programs are enhancing,’ he said.

‘But secondly, the target of our climate change financing are low-income, developing countries. Particularly in our own backyard so far as the Pacific is concerned – the small Pacific Island nation states.’

The Government has also announced a review of the use of technical advisers in delivering aid amid concern the money may not be used appropriately.

Technical advisers have been criticised as ineffective in some places and Mr Smith says recipient nations will be consulted as part of the review.

‘It has been a feature of Australian development assistance. It may be that in more recent times there has been an over-reliance upon it,’ he said.

‘I’m not proposing to pre-judge or determine the review but one of the outcomes may be that we look at other ways of delivering capacity building.’


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