A visionary Federal Budget

Australia’s prosperity is tied to the prosperity of our region and the world.

More than ever we are all connected through the global economy, by the impact of increasing natural disasters and unprecedented numbers of displaced people. So now, more than ever, Australia needs a Federal Budget with a global vision.

A visionary budget will recognise that if we support the missing middle, today’s aid recipients can become tomorrow’s trading partners.

A visionary budget will recognise that every dollar we invest in building the resilience of our neighbours will save us between $2-80 in the post-disaster response.

A visionary budget will recognise that given the increasing scale, frequency and impact of disasters and conflicts in the world, Australia should do its fair share and double the emergency fund.



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Double the emergency fund

World Vision recognises Australia’s ongoing commitment to humanitarian assistance, particularly in the broader Australian climate of repeated aid cuts. Australia’s longstanding, bipartisan engagement for humanitarian preparedness and response acknowledges the vital importance of this shared global responsibility.

However, given the increasing scale, frequency and impact of natural disasters and conflicts, Australia must increase its humanitarian funding to be able to continue to respond flexibly, effectively and equitably to global humanitarian needs. In recent years, global humanitarian needs have risen dramatically and most OECD-DAC governments have increased their humanitarian assistance accordingly, while Australia has either decreased or at most maintained its humanitarian assistance levels.

Despite claims of being one of the most generous donors, Australia ranked 20th for humanitarian assistance provided as a percentage of GNI in 2015 (0.02 percent).

Our recommendation

  • That the Australian Government double the Emergency Fund with additional funding to A$260 million to ensure flexible response capability to rapid-onset disasters and conflict spike.

Support the missing middle

Small and medium enterprises are critical engines of economic growth, employment and poverty reduction.

They create a large share of new jobs in an economy, and are important drivers of innovation and productivity growth. In high income countries, they are responsible for more than 50 percent of gross domestic product and 60 percent of employment.

In low income countries, small and medium enterprises represent only 17 percent of Gross Domestic Product and 30 percent of employment. The absence of small and medium firms in developing countries – known as the missing middle – represents an acute barrier to inclusive economic growth and private sector development.

The lack of finance to the missing middle is a global market failure. By preventing large numbers of people living in poverty from growing their businesses and participating in the labour market, the missing middle is a sizeable blockage on economic growth and poverty reduction.

The aid budget can play a pivotal role in reducing these barriers and turning today’s aid recipients into tomorrow’s trading partners.

Janaki's story

From a factory in her parents’ backyard, Janaki and her staff make brushes from coconut husks. She started with one supplier, but he could only give her a limited amount to work with each week.

In June 2016, Janaki received an ARISE loan of Rs$600,000 (A$5,400). She used it to buy a cutting machine and a brush polishing machine. The rest she used as operating capital, buying a large stock of husk from local producers and employing 10 more people.

Now, Janaki’s brushes are exported internationally.

Our recommendation

  • That the Australian Government invest an additional A$50 million in innovative financing solutions which increase access to finance for small and medium enterprises in Cambodia, Indonesia, Myanmar and Sri Lanka.

Invest in prevention

Disasters

World Vision empowers and enables households and families to absorb shocks and stresses, adapt to a changing environment and transform risk into opportunities.

Even the most conservative estimates suggest that every one dollar invested into Disaster Risk Reduction activities saves up to $15 in response and recovery costs in the aftermath of a disaster.

Protracted conflicts

World Vision Australia supports the Australian Government’s view that investing in conflict prevention and resolution is a critical method of preventing humanitarian needs arising. When conflict prevention fails, multi-year, flexible funding is essential to develop strategic responses to address the root causes and stem the humanitarian impact of protracted crises.

The life-saving and cost-saving impacts of investing in prevention are clearly illustrated by the Nepal earthquake.

Prior to the earthquake, World Vision, with the support of several global partners including the Australian Government, had retrofitted Nepalese schools in Nepal to withstand earthquakes – a safe schools initiative.

All 160 retrofitted schools survived the 7.8 magnitude earthquake of April 2015, while more than 6,000 other schools were severely damaged or destroyed.

Our recommendations

  • That the Australian Government support partner governments to implement disaster risk reduction and climate change adaptation legislation, policies and programs, with particular attention to countries with high vulnerability and low capacities.
  • Develop mechanisms to calculate the amount of Australian ODA spent on disaster risk reduction and climate change adaptation programs, and increase the percentage of aid programs year on year, particularly in countries with high vulnerability to natural hazards.
  • That the Australian Government allocate additional funding for multi-year resilience mechanisms for protracted crises, such as South Sudan and Iraq.