Foreign aid fail: The 'Lucky Country' is Selfish

By Heath Pickering. Deputy Editor, Election Watch

How much foreign aid do you think Australia invests annually?

For every $100 in tax revenue earned, a measly 25 cents is foreign aid (0.25% of GNI). And it gets worse.

In the 2015 Budget, $1 billion was cut—a 20% reduction in one year—the biggest aid cut ever in a single year.

Another $224 million in new cuts announced in the 2016 Budget will see this pittance decrease to 23 cents by 2016-17—depreciating further in following years.

This is the lowest level of foreign aid since recordkeeping began. The benchmark rate recommended by the United Nations is 0.70% of GNI.

For a lucky country blessed with riches, a high standard of living, and poor neighbours, we've truly become a selfish country.

Aid groups have slammed the cuts. Oxfam's Budget spokesperson Joy Kyriacou said, “Oxfam has already had to scale back life-saving work in Indonesia, Bangladesh, Sri Lanka and Sub-Saharan Africa – the poorest region in the world – due to unprecedented aid cuts”. And Stephen Howes, Director of the Development Policy Centre at ANU, factually noted, although I sensed a hint of sarcasm, that “this year’s cut [7.5%] seems modest in comparison” with last year’s cut.

Comparison with other rich countries

Let’s put this into perspective. According to OECD data, Generous Sweden donates 1.40% of GNI in aid, almost seven times more than Australia. Other countries like Germany (0.52%), France (0.37%) and Canada (0.28%) have higher targets. Even fiscally flawed Ireland, devastated by the Global Financial Crisis, manages to offer a 0.36% aid package.

Some countries have gone beyond just pledging increased investment in aid. In 2015 the UK Government passed a Bill that guarantees at least 0.7% of GNI will be spent on aid.

How did we get here?

Politically, it’s easy to cut the aid budget. Foreigners don’t vote.  And with the constant rhetoric of a “budget emergency”, the majority of Australians feel our scarce resources should be spent in Australia.

The Vote Compass project, which is Australia’s largest survey examining voter attitudes toward the policies of the established parties, illustrates foreign aid’s lack of salience for voters. Out of 20 issues canvassed by more than 120,000 respondents, most Australians were more concerned about ‘bread and butter’ issues like the economy (1st), health (2nd) and education (3rd), while foreign affairs languished at 17th.

This issue illustrates one of the fundamental flaws with democracy; pandering to populist apathy. We need leadership from our politicians to implement a fair foreign aid policy.

So what are the parties' official policies?

The Coalition has committed to a foreign aid budget equal to 0.5% of GNI. However, they provide one critical caveat: They are unable to commit to a date to reach the target citing “the current state of the federal budget after six years of Labor debt and deficit”.

Similarly, when in Government, Labor pledged a foreign aid commitment of 0.5% of GNI. However, this target was continually deferred as the effects of the Global Financial Crisis endured. Labor recently rejected the most recent $244 million cuts announced in the 2016 Federal Budget.

These targets are fair. And they're achievable, even in a tough economic climate. But having an official policy (for policy's sake) and actually striving to achieve that policy is not the same thing. Neither major party appears dedicated to achieving their own policy.

The Greens are the most generous party when it comes to foreign aid. They've committed to a "minimum" foreign aid budget of 0.7% of GNI by 2025.

Likewise the Nick Xenophon Team says it aims to "work towards a foreign aid budget that represents 0.7% of Gross National Income".

Independent Senator Jacquie Lambie has previously stated that she wants to see the aid budget halved and redistributed to pensioners and the higher education sector.

The Liberal Democrats' hardcore libertarian values provide the most extreme policy. They say aid to "foreign countries by the Australian government, other than short term humanitarian relief following natural disasters, should cease”. In exchange for eradicating foreign aid, Liberal Democrat Senator David Leyonhjelm proposes to double the refugee intake.

While the Greens and Xenophon have policies that reflect international standards, the two latter policies are unfair, unsophisticated and downright dangerous. Both Lambie and Leyonhjelm misunderstand the benefits of having a foreign aid program. Our investment in schools educates our regional neigbours and undermines religious extremism. And, aid investment in infrastructure projects helps businesses boom, which improves trade with Australia.

Ultimately, foreign aid needs better leadership than what we've been experiencing. Profiting from neglecting our international commitments is lazy politics. Lucky we may be. Generous we are not.

Heath Pickering has a Masters of International Relations degree from the University of Melbourne. He is currently working as a research assistant on Vote Compass and is a member of the Australian Labor Party. Last year he worked in the Solomon Islands under a DFAT-managed aid program.

This article was co-published on ABC The Drum.

Banner image: Flickr/DFAT


economy; foreign-policy Economy; Foreign Policy