The budget is a win, but other avenues need to be explored.
It’s a critical time for Australia’s aid program. We’ve just seen a welcome increase in the aid budget as the Government moves to fulfil its promise to help the world’s poorest people. The independent review of aid effectiveness the first in 15 years was completed last month and the Government is considering its response. Meanwhile, the 2015 deadline for the Millennium Development Goals that aim to halve the number of people living in poverty is very near.
One important way of making sure Australia’s aid budget is spent effectively is to ensure that all the government agencies that deliver aid are working towards the same objectives. The Government’s aid program is too often equated only with AusAID, its overseas aid agency. Yet there are many more arms of government that can help to lift people out of poverty, whether by delivering aid or policies that contribute to development.
Next year, about 11per cent of the total aid budget will be spent by government agencies and departments outside of AusAID. The amount of aid delivered in these other areas is not insignificant: the Australian Federal Police, for example, will spend $217.7 million.
In total, the amount of aid delivered by departments other than AusAID will go up, from $512.2 million to $529.1 million.
The involvement of these other departments can have positive development impacts: a 2008 OECD report on Australia’s aid program found the involvement of other government agencies provided ways to address problems of regional security, conflict and instability, and to deliver relief following humanitarian disasters.
However, the involvement of multiple agencies also presents challenges. Effective coordination is needed to ensure different government departments are working towards the same objectives. In particular, all departments need to agree on a single, joint strategy for the countries they are working in. When this does not occur, there is the risk that Australian aid is scattered and fragmented, and that impact on poverty is compromised.
Another challenge is to make sure that all departments that are spending aid dollars are subject to the same disciplines and requirements as AusAID. For instance, the Department of Defence which in recent years has delivered more than half of Australia’s aid to Afghanistan is not required to report or independently evaluate the impact of its aid projects.
But finding effective, long-term solutions to poverty is about more than providing aid to developing countries. Aid is only one part of the development picture. Australia’s policies on trade, immigration and climate change, for example, can all impact poorer countries, for better or worse. We need to think beyond aid and make sure our policies in these areas benefit the poor, rather than undermine the good work being done by our aid program.
Take our neighbours in the Pacific, who face challenges such as high unemployment, limited natural resources and a high vulnerability to climate change. Australia is the Pacific’s main economic partner and leading aid donor Australian aid to the Pacific is estimated at $1161million next year. But aid is just one of the many ways that Australia can contribute to their development.
The Government is negotiating a regional trade agreement, PACER-Plus, with New Zealand and 13 developing Pacific island countries. Any new agreement should not be a standard free trade agreement, but should focus on trade facilitation instead. Connecting island producers with consumers in Australia and New Zealand, and investing in trade-related infrastructure such as ports and roads, will help promote the region’s economic development.
Ensuring there is an effective seasonal migration program for Pacific Islanders to work in Australia could also provide real benefits for development. Another practical way of helping poor people in the Pacific would be to reduce the costs of sending money, or remittances, from Australia back to the Pacific. For every $100 sent back from Australia, about $20 is sucked up by transaction costs.
These are just some examples of how a broad range of Australia’s policies can contribute positively to development. That’s why we need a coordinated, whole-of-government approach, not just to our aid program, but to all our activities that affect development. There’s no use giving aid dollars with one hand, when other government policies or poor coordination with other aid programs mean we are effectively taking it away with another.
The budget announcement that 0.35per cent of our national wealth will go to overseas aid next year, plus the ongoing commitment to achieve the target of 0.5per cent by 2015, is good news for the world’s poor. Australia’s aid program is already doing a lot of good, but the growth in the aid budget, combined with the aid review, gives us a chance to do even more.
This opinion editorial was first published in the Canberra Times on 16 May 2011