No one’s surprised by more cuts to foreign aid — but we should be

by Bill Browne, Researcher

Rumours that there would be steep cuts to foreign aid of $400 million per year or more might provoke relief that the Budget announced cuts of “only” $140 million over four years — concentrated in the fourth year.

The problem is that our “official development assistance” (to use its formal title) is already at historically low levels after years of cuts. It needed a big funding boost, not more cuts. Even if we count the increased funding for “ODA eligible” projects like the Asian Infrastructure Investment Bank, Australia won’t come close to meeting its commitments.

The most fundamental of these is the bipartisan target for foreign aid spending to rise to 0.7% of Gross National Income, which dates back to the Howard Government. In other words, of every $100 of output, we should devote 70 cents to foreign aid. A diverse mix of countries, including Turkey, the United Arab Emirates, the United Kingdom and Norway, all meet or exceed that target.

Instead, we give about 22 cents to foreign aid for every $100, and are heading towards giving just 20 cents.

That’s below our 0.7% target, but it’s also:

  • Below the OECD average of 0.31%
  • Below the target in the 2013 budget of 0.5%, which we were meant to achieve last year
  • Less than one-sixth of the Emirates’ contribution of 1.3%
  • Over a billion dollars below the funding level Minister Bishop committed to in 2014
  • Down by a third from the rate that Minister Bishop inherited from Minister Carr, of 0.32%

New Zealand recently announced an additional $670 million in aid spending to make up for past neglect. Our aid budget is just as in need of a big funding boost.

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