In stark contrast, Australia – one of the world’s wealthiest nations with a $1.6 trillion dollar (and growing!) economy and the sixth lowest level of debt in the developed world – has confirmed in its recent budget that we are the comfortable nation that couldn’t. Or rather, the comfortable nation that wouldn’t.
While expenditure continues to grow in other areas and many tax loopholes remain unplugged, the government is implementing the largest cuts to aid in Australia’s history. A total of $3.7 billion will be stripped from aid over the next three years, including $1 billion immediately.
Australian aid will fall to 0.22 per cent of national income by next year. This amounts to less than 1 per cent of federal government expenditure dedicated to supporting our poorest neighbours and addressing global challenges. Aid to Bangladesh will be cut by 40 per cent this year (around $28 million), which will severely affect programs that help the poorest girls and boys to access primary education and support the most vulnerable families with income support and livestock. Aid to Vietnam will be cut by 40 per cent as well ($39 million), impacting programs which increase access to clean water and sanitation, support communities to adapt to climate change, and help build the infrastructure needed for economic growth.
Particularly objectionable is that aid to Sub-Saharan Africa, where roughly one in every three people is undernourished and almost half the population live below the international abject poverty line, and where we have much to offer in terms of our expertise in dryland agriculture, was cut by 70 per cent to a mere $31.8 million.
Disasters like the Nepal earthquakes and Cyclone Pam, epidemics such as ebola or tuberculosis, and the challenges the world faces in generating inclusive economic growth and responding to climate change all remind us how interconnected our world is. Australia’s response is ungenerous and shameful. It is also counterproductive; it’s in Australia’s interests to help foster hope and opportunity for communities and countries in our region. The cuts to aid programs have no rationale beyond the government’s arbitrary decision to balance its books on the backs of the world’s poorest people.
The cuts will do nothing to meet the government’s stated commitment to effectiveness in the aid program – and will probably undermine it. Effective programs to address complex issues of poverty and disadvantage rely on long-term relationships, stable funding, and a process of learning, refining and following-up. The World Bank estimates that funding volatility can reduce aid effectiveness by around 25 per cent (in terms of outcomes delivered for every aid dollar spent).
Many programs in south and south-east Asia and in Africa that have been widely regarded as effective have been cut, while programs in the Pacific – some of which have received lower effectiveness ratings – have been largely spared. Some of the decisions have clearly been based on pure politics. While all of Cambodia’s neighbours (Laos, Vietnam and Myanmar) saw their programs cut by 40 per cent, Cambodia was spared. No doubt because maintaining aid is part of the deal under which Cambodia has agreed to shoulder part of Australia’s refugee resettlement obligations.
In short, it’s a devastating blow to the poor. It undermines aid effectiveness, harms our ability to exercise regional and global leadership and renders Australia a less generous nation. It also forgets a core fact about Australian aid. Aid is not what we do until our leaders declare a (swiftly forgotten) budget emergency. Aid is what we do because generously supporting the world’s most promising people is fundamental to who we are.
