Non-government organisations have hit out at the Coalition after it cut foreign aid in the Federal Budget, calling the move “selfish” and “short-sighted”.
- Total aid expenditure will fall by more than $115 million
- Parts of the aid budget are being repurposed and given a sharper strategic edge
- The Pacific has largely been spared, but aid to South Asia and South-East Asia will be cut
Total aid expenditure will fall by $117 million, with the aid budget dropping from $4.16 billion this financial year to $4.04 billion in 2019/20.
The Budget forecasts that aid spending will continue to basically flatline until 2022/23, when the Government has promised to build in spending increases in line with inflation.
The documents also make it clear how parts of the aid budget are being repurposed and given a sharper strategic edge.
The Government has confirmed that it will use the aid budget to fund part of its $2 billion Australian Infrastructure Financing Facility for the Pacific.
Most of that money will go into loans, but $500 million will be doled out as grants for major infrastructure projects in the region over the next four years.
The Government set up the facility partly because it is anxious about Pacific nations accumulating large debts to China, which has ramped up lending in the region over the past decade.
The ABC has been told that the facility will ramp up its operations slowly — with only about $50 million in grants expected to be handed out in 2019/20.
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Cuts to South and South-East Asia
The Coalition has found that money partly by cutting other aid programs in the region — including in South-East Asia and South Asia.
For example, direct bilateral aid to Pakistan will be halved from $39 million to $19 million.
Aid to Cambodia will drop from $56 million to $43 million.
Foreign Minister Marise Payne said in a statement that the budget was about “advancing Australia’s national interests by protecting our security and prosperity”.
“As our South-East Asian neighbours transition from developing economies, the Morrison Government is increasingly focused on building economic resilience, alongside poverty alleviation,” she said.
The Pacific has largely been spared from cuts.
The Government has promised the region $1.4 billion in foreign aid for 2019/20, giving it the largest share of the aid budget in recent years.
The Coalition has also moved to tackle concerns that the Department of Foreign Affairs and Trade (DFAT) does not have skilled personnel with the right experience to run the facility.
The Budget includes another $12 million to help DFAT source expert advice when the facility starts work in the middle of the year.
Sharper strategic focus
The Infrastructure Facility is not the only example of the way the foreign aid budget is evolving.
Last year Prime Minister Scott Morrison announced Australia would provide technical advice to South-East Asian nations to help them develop infrastructure without sinking into debt.
The Budget papers reveal that initiative will cost $121 million over four years, with the funds again coming from the aid budget.
In a clear reference to Beijing, Foreign Minister Marise Payne says the Government will help South-East Asian nations with advice “on how to best manage infrastructure development, including avoiding debt traps”.
Aid groups slam budget as ‘selfish’
Twitter Sophie McNeill: Billions have been slashed from #Australia’s foreign aid budget since 2013 despite this country enjoying 27 consecutive years of economic growth… now with the government celebrating a budget surplus, we have run out of excuses not to increase our foreign aid spending
But aid groups are likely to be unhappy that large sums of money are being taken away from traditional programs and put towards sharper strategic purposes.
In a statement, Jody Lightfoot, director of Campaign for Australian Aid, said the Prime Minister had an opportunity to show global leadership but had instead “chosen to pander to populism and cut vital services to our poorest neighbours”.
“Six consecutive cuts to Australia’s international development is a failure of moral leadership,” she said.
Oxfam Australia’s chief executive, Dr Helen Szoke, said the “extremely disappointing” budget was blind to the dual crises of inequality and climate change.
“It is a selfish, narrow-minded Budget that does nothing to position Australia as a nation [which] does its fair share in our region, or the world,” she said.
She said while Oxfam welcomes the renewed focus on the Pacific, “robbing the shrinking aid budget of $500 million to fund the new Pacific infrastructure facility bank is ill-conceived”.
“Oxfam has concerns the model behind this Pacific cash splash may only benefit Australian companies and contractors, rather than genuinely meeting the development needs of our Pacific neighbours,” she said.
The Australian Council for International Development (ACFID) CEO Marc Purcell said the Government was “opening up a huge black hole” with this “short-sighted” budget.
“Alarmingly, the Government is halving assistance to Pakistan and Nepal, two of the poorest countries in Asia. The Government’s own white paper on foreign policy is undermined by these cuts,” he said.
“This is a cavalier approach to regional engagement. We are veering into a withdrawal from large parts of Asia without consideration of the human and strategic costs.”
Countering espionage and foreign interference
Twitter Stephen Dziedzic: Interestingly, Govt is also putting $35 million into an initiative to “counter espionage and foreign interference activities” and help ensure there are successful prosecutions under the new leg. Scant details on how it will be spent but the $ will be handed to AFP/ASIO/DPP (7)
Not all the foreign policy initiatives in the Budget sit in the aid budget.
The Coalition is also putting $34.8 million over four years into a new initiative to “counter activities that seek to undermine Australia’s sovereign democratic institutions”.
The money will be used to “support investigations” under the Government’s new foreign interference legislation and will be split between intelligence and law enforcement agencies including ASIO, AFP and the DPP.
The Government has also unveiled initiatives to help boost Australian exports and draw more visitors to the country.
The Budget includes a $60 million increase to a grants scheme designed to help Australian businesses utilise free trade agreements, as well as $50 million to upgrade tourism infrastructure at iconic sites.