They have raked in $1.81 billion in taxpayer-funded contracts, but the lack of scrutiny of their profits is under challenge, as are the huge sums given to agencies such as the World Bank, which receives $450 million a year.
Aid experts and the Opposition are demanding greater accountability of the money being spent to tackle global poverty.
GRM International, which recently joined the global Futures Group, had $502 million in AusAID contracts listed in the past 18 months, including $92 million to encourage Africans to study in Australia.
Cardno, which lists former Defence chief Peter Cosgrove on its board of directors and which reported a record $59 million profit last year, holds $442 million in contracts, including two Indonesian deals worth nearly $100 million.
Coffey International, which boasts to shareholders how the Gillard Government is ‘spending more’ on foreign aid, booked $353.4 million in contracts, including $31 million to try to weed out corruption in Papua New Guinea. The dividends for shareholders and executives will grow even fatter with Australia’s aid budget forecast to soar to around $8.5 billion by 2015-16.
Foreign Affairs Minister Kevin Rudd has pledged to spend record sums trying to tackle poverty in some of the world’s poorest countries. However, the increased spending is causing resentment among some of his ministerial colleagues who question how wisely the money is being spent.
Analysis of contract information listed on the Government’s AusTender site shows SMEC International, which grew out of the Snowy Mountains scheme, had $202.9 million in contracts listed since July 2010, including $55 million to manage public transport evaluation in PNG.
Overall, the money being paid to private-sector corporations – known as ‘managing contractors’ – has dropped to around 20 per cent of AusAID’s budget. However, aid experts are questioning the checks and balances in a program that is growing faster than any other area of the federal budget.
Stephen Howes, part of the high-level review of Australia’s foreign-aid program, wants a ‘greater level of scrutiny’ of the aid program – particularly given the large increases in funding.
‘There are risks that as quantity goes up, quality goes down. As the money goes up, the scrutiny should go up as well,’ said Professor Howes, director of the Australian National University’s Development Policy Centre.
Coalition foreign affairs spokeswoman Julie Bishop demanded Mr Rudd ‘urgently’ announce how he planned to better measure the aid program’s performance benchmarks – as recommended by the review.
‘With some organisations awarded contracts involving hundreds of millions of dollars, it is essential that aid programs under their management are scrutinised for accountability and effectiveness,’ Ms Bishop said.