Foreign aid gets $1.4bn budget boost but Australia still among least generous in OECD
Australia is poised to remain one of the least generous countries in the OECD for foreign aid, despite the Albanese government announcing a $1.4bn increase over four years.
The aid sector warmly welcomed the budget boost, which starts slowly and will be concentrated on the Pacific, but urged the government to rebuild Australia’s standing by going further in next year’s budget.
Rev Tim Costello, the executive director of Micah Australia, said he was relieved that the government had started to change “the narrative that aid is just an ATM for us to go to whenever there’s a domestic top-up that’s needed”.
But he noted the new aid budget – $4.65bn in 2022-23, up about $100m from last year – was “still very low” by international standards.
The chief executive of Oxfam Australia, Lyn Morgain, said the aid budget remained stubbornly low after “years of cuts and neglect”, adding: “We can and must do better.”
Australia’s official development assistance (ODA) had been likely to fall under the Coalition to be worth only about 0.18% of gross national income, but the level will now be “stabilised” at 0.2% for each of the next four years.
Australia has slipped from its status as the ninth most generous donor in the OECD about 25 years ago.
By last year, Australia had fallen down the list to be ranked 21st out of 29 donor countries, according to an aid tracker published by the Australian National University’s Development Policy Centre.
Luxembourg, Norway and Sweden are the top of the pack, spending more than 0.9% of their national incomes on aid, while the UK also remains well ahead of Australia, allocating about 0.5%.
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Analysts believe Australia is likely to remain in a similar position at the bottom of the pack of OECD rankings even after the new figure of 0.2% is taken into account.
Countries that are just above Australia in the rankings – New Zealand and Spain – allocated 0.28% and 0.25% of national income last year.
Labor’s national platform committed the party to “rebuild Australia’s international development program” to be worth at least 0.5% of gross national income, but it did not set a deadline.
Instead, the party said it would “increase aid as a percentage of gross national income every year that we are in office, starting with our first budget”.
Costello said to reach the 0.5% target the government would have to keep making the case that increasing ODA funding was both the right thing to do morally but also served Australia’s national interest.
Australia is campaigning for a seat on the UN security council in 2029-30. Costello said he did not have “any moral objection if aid also serves the purpose of Australia getting a seat on the security council”.
“Often Australians say, ‘yes, but we’re in pain, we’ve got to look after ourselves,’ as if the Brits aren’t in pain – and they’re giving two-and-a-half times more to the world’s poor than we are.”
The $1.4bn in additional foreign aid will be mostly directed to the Pacific ($900m over four years) and south-east Asia ($470m) and comes as the government works on a broader review of the development program.
The Pacific figure is much higher than the foreign affairs minister, Penny Wong, promised in the election campaign.
Marc Purcell, the chief executive of the Australian Council for International Development, said it was significant that Wong had persuaded her colleagues on the cabinet’s expenditure review committee to agree to top up the election commitment.
Purcell said Pacific countries had been “bellywhacked by Covid” but the previous Coalition government had rolled out “temporary” measures for the region.
“This budget actually makes what was temporary permanent and that’s very significant because our relationships with our neighbours in the Pacific are permanent,” Purcell said.
“Australia is actually better positioned now to do more in our region.”
Purcell said he “hoped and expected” that the government would go further next year.
Unicef has vowed to work with the government to “build the case for greater investment in our region in coming months and years”.
The Department of Foreign Affairs and Trade said Australia would strengthen the Pacific’s climate resilience and address a decade’s worth of development gains lost due to the pandemic.
Other areas of focus include health, water, sanitation, hygiene, education, social protection systems, gender equality and disability inclusion. The government has reintroduced a target that development investments above $3m must include a gender equality objective.
The minister for international development and the Pacific, Pat Conroy, said the budget increase would “advance Australia’s interests by tackling poverty and supporting stability, prosperity and security in our region”.