Confusion over aid budget but we take Prime Minister at his word

Wednesday, May 12, 2010

Development agency World Vision Australia last night noted reports suggesting $1 billion had been cut from the foreign aid budget but believes this is a misunderstanding of the government’s intention.

World Vision chief executive Tim Costello said he had spoken with the Prime Minister on Monday. The aid sector had asked that the Government’s aid budget increase by half a billion dollars “and the AusAID budget was increased by $535 million to $4.3 billion”.

“We choose to take the Prime Minister at his word. And we believe the reframing of the formula on GNI has been represented as a billion‐dollar cut when in fact it will mean ‐ by 2015 ‐ the very opposite. By 2015 the promise of 0.5 per cent on the larger cake – the new GNI figures – should see an increase to $8.9 billion rather than the previously estimated $8 billion going to foreign aid."

“We trust this confusion will be cleared up by the Government. The soundness of investing in our poorer neighbours is not only the wisest investment we can make but also the one the PM has courageously and consistently supported."

However, the quality of the proposed aid programs in this budget raises issues that are worrying.

“The drop in budgeted funding for health is a particular concern. A doubling of health aid is required to reach our fair share of funding," Rev Costello said.

“Funds to support developing nations hit by humanitarian crisis – like those in Haiti, Chile and China in recent months – have also been cut. The allocation of new education monies towards a large‐scale international scholarship program – bringing students to study in Australia ‐ rather than the provision of basic education programs in developing nations is also of concern."

Rev Costello noted that there was no new funding in this year’s aid budget for helping poor nations deal with climate change, and looked forward to clear guidance on how Australia planned to meet its commitment under the Copenhagen Accord to contribute new funds to ‘fast start’ funding over the next three years.

Rev Costello said while the increase in aid funds in real terms was significant, progress towards the Government’s committed target of 0.5 percent of national income by 2015 “will require steeper increases in aid spending in future years”.

“Australia is very well placed to fulfill this goal, given the faster return to budget surplus now predicted, and considering Australia’s very strong economic position in comparison to other donor countries,” he said.

“World Vision welcomes the review of the structure of AusAID and its reporting mechanisms, and the review of aid spending on technical advisers. Increasing transparency of aid spending will improve the public’s trust in overseas aid and measures to improve accountability should be applauded. 

“Effective aid does work and the good news is that in the past five years, 1.8 million more children are surviving each year past the age of five because of increased aid efforts and economic development. The world’s poorest people still need help. The Australian Government must not only increase funding but also improve its efforts to deliver aid programs that make a real difference to people’s lives.”

World Vision CEO Tim Costello is available for comment. 

Media enquiries: Bill Pheasant 0413 701 028

Media Releases, Poverty, Asia and the Pacific, AUSAID, Australian Government, Budget Cuts, Foreign Aid, Kevin Rudd, Report, Tim Costello

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