Foreign Aid Cap Breaks Promise - NFPs

Major International aid Not for Profits are claiming the Abbott Government has broken its promise to increase aid to overseas development after it announced it would cap foreign aid for two years, resulting in cuts of $7.9 billion.

Aid agencies and the Australian Council for International Development (ACFID) said the aid budget will flat line for two years in real terms as the budget fails to deliver the promised commitment to increase aid by CPI.

“Australia’s aid budget will decline from .33% of GNI currently, to .32% in 2014-15 and .31% of GNI in 2017-18,” Marc Purcell, Executive Director of the Australian Council for International Development (ACFID), the peak body for humanitarian and overseas aid charities said.

“The Government has broken its better-than-nothing promise to marginally increase Australia’s aid budget, announcing the latest in an onslaught of successive cuts to our aid program,” Oxfam Chief Executive Dr Helen Szoke said.

“Having already made $4.5 billion in cuts to Australia’s modest aid program ahead of the budget, tonight’s decision to flat-line aid for two years brings total cuts to $7.9 billion. This broken promise is yet another blow to the millions in our region living on less than $2 a day – most of whom are women.

“The Asia Pacific region faces a perfect storm of complex challenges with potentially devastating impacts for our poorer neighbours and also for Australia.

“Tonight’s budget falls devastatingly short of this, with other nations including the UK delivering more than double Australia’s effort in tackling global poverty.”

Dr Szoke said that within the aid budget, the commitment of only $339 million to respond to humanitarian crises was also inadequately low.

“The rising impact of crises is pushing the international humanitarian system to the brink. Unless countries like Australia invest more in humanitarian assistance and efforts to reduce disaster risk we are going to see more people go without life-saving assistance,” Dr Szoke said.

“Strong investment in humanitarian response and climate action is essential if we are to tackle this challenge head on.  Otherwise, we will be leaving our poor and vulnerable neighbours in the Asia Pacific region hungry and still hoping for action from nations such as ours.”

World Vision Australia said the further cuts to Australia’s foreign aid budget meant Australia’s overseas development assistance was contributing more savings than any other sector to the Budget repair job.

“After receiving repeated reassurances that the aid and development budget would increase by CPI, the Budget papers reveal a freeze of the aid budget for the next two years,” World Vision Australia CEO Tim Costello said.

“This represents a cut in real terms, and it will see a steady decline in the generosity of the aid program – both as a proportion of national income, and as a proportion of government expenditure.

“It is disheartening to see that the poorest people in the world will foot the bill for Australia’s fiscal repairs.”

Costello said that while Australia was facing some fiscal challenges, the burden should not fall heavily on programs which assist the world’s most vulnerable, including many of our closest neighbours.

“Of the major savings identified in the Budget forward estimates, more than 20 per cent comes from foreign aid – the biggest single contribution of any category,” he said.

“Australians are by nature generous people – this is demonstrated by strong support for charities and a huge range of community groups making up our strong civil society, which makes this budget completely out of step with Australians’ own sense of responsibility to those less well off than us.”

According to Costello, the two-year freeze in the aid budget follows both sides of politics gutting the total aid budget and diverting aid funds to meet domestic asylum-seeker costs.

He said as a percentage of GNI, the foreign aid budget would decline from 0.33 per cent in the current financial year, to 0.29 per cent in 2017-18.

“Peace and prosperity across our region is in our country’s best interest and a well-targeted and effective aid program is an important contributor to this goal,” he said.

“Our overseas aid program delivers a stunning level of human benefit per dollar spent.”

Child rights organisation and NGO Plan International Australia said it was disappointing to see what amounts to a cut in foreign aid in real terms over the next two years, despite a commitment to lift aid expenditure in the 2014/15 financial year.

“We had already seen a $650 million cut in aid this year contribute significant savings for the government, and once again the aid budget – and the world’s poor – are having to bear the brunt,” Plan CEO Ian Wishart said.

“As a sector, we had been looking for predictability, which we need as much as any other industry or sector in order to work to our very best. And once again, we have to accommodate unforseen adjustments.”

However, Wishart said Plan was pleased to see $375 million diverted to the asylum seeker program by the last government had been reduced to $4.6 million, which freed up $370 million to help support the poor as they work to break the cycle of poverty.

“We are also gratified to see overall humanitarian expenditure rising to $338 million from $264 million. That’s very welcome given the growing number of humanitarian crises organisations like Plan are dealing with each year,” he said.

“Also welcome is an increase in funding to NGOs through the Australian NGO Cooperation Program (ANCP).

“But we’re disheartened to see aid expenditure on sub-Saharan Africa cut to $186 million from $243 million. While we understand the government wants to focus on the Asia Pacific region, we shouldn’t be overlooking one of the poorest regions of the world.

“It’s worth remembering that foreign aid is not mere charity, it is an investment. Aid promotes stability and security in our region and across the world, which in turn makes Australians safer at home and overseas.

“Our economy is also inextricably tied to the prosperity of the rest of the world, and aid helps to create and support emerging markets – in turn promoting trade opportunities and helping to support Australian jobs.”

Federal Opposition Deputy Leader and spokesperson for Foreign Affairs and International Development, Tanya Plibersek, said the $7.6 billion cut brought Australia’s foreign aid cuts to $16 billion.

“The Abbott Government’s $16 billion in cuts to overseas aid is a broken promise that will hurt the world’s poor,” Plibersek said.

“In yesterday’s Budget, Mr Abbott cut $7.6 billion from overseas aid, breaking his election promise to increase aid by the Consumer Price Index.

“That is on top of a further $8.4 billion Mr Abbott has cut from overseas aid by walking away from funding he promised as late as December last year (2013-14 Mid-Year Economic and Fiscal Outlook, page 21.).

“This $16 billion broken promise puts many excellent overseas aid programs at serious risk.  But the Budget says nothing about exactly where the axe will fall.”

To view the Treasurer’s Budget speech, click HERE.

To view the details of the Budget’s Social Services package, click HERE.

To view the Budget Papers, click HERE.