Govt Flags ‘Bold’ Changes To Foreign Aid Policy

Australia's foreign aid program will undergo a "bold and dramatic change", with recipient countries and aid agencies set to sign up to performance benchmarks – changes that are already gaining support from Not for Profit aid agencies.

“We will strengthen the way we assess the performance of contractors, NGOs and multilateral organisations delivering Australian aid,” she said.

“However, when projects don’t deliver the results we expect, they will be put on a rigorous path to improvement or be terminated. If a program has failed we will call it for what it is and come up with a better way to meet the challenge.”

Bishop told the Press Club that the changes were intended to achieve better value-for-money for taxpayer dollars.

Bishop said 90 per cent of Australia's aid program would be diverted to Australia's "immediate neighbourhood" – the Indo-Pacific region.

“The Government will invest over 90 per cent of our country and regional program funding in our region. We will harness the private sector in those countries, so that Australia’s aid program promotes the major driver of poverty reduction – economic growth,” she said.

“All new aid investments must consider innovative ways to engage the private sector and promote private sector growth in recipient countries.

“And we’ll introduce Performance Benchmarks. The Government will introduce a rigorous system of performance benchmarks and mutual obligations tailored to each country’s circumstances. In the past, underperforming programs would sometimes continue to be funded, even when it was clear they were not delivering, throwing more money at a failing program rather than admit failure.

“While the Australian Government will be held to account for the performance of our aid program, partner governments are responsible for leading their own development processes. Sovereign governments have responsibilities to their citizens and should not use the provision of foreign aid to shirk those responsibilities.

“This is a process of developing mature relationships with our near neighbours. We must get away from the old stereotypes of aid donor and aid recipient and embrace the concept of economic partnerships.”

Bishop said one of the most important priorities for the new foreign aid program would be to promote the empowerment of women and girls in our region.

She said the Government had appointed former Senator Natasha Stott Despoja to advocate on gender issues, regionally and internationally, as Australia’s Ambassador for Women and Girls.

The Foreign Minister also announced the creation of a Performance Incentive Fund, which she envisaged would have significant funding attached in coming years.

“From next year’s budget – 2015 – this incentive fund will offer increased funding for programs and organisations found to be particularly effective in meeting targets and benchmarks,” she said.

“We will (also) become a founding partner in the new Global Development Innovation Ventures program, this is an international program supported by the United States and the United Kingdom aid agencies to identify, test and scale up successful new approaches to development.

“The Coalition Government is making bold changes to the aid program. We are deeply aware that a $5 billion aid program is a substantial contribution to the needs of our neighbours and that’s why our aid program must be responsible, affordable and sustainable.”

The Federal Budget papers reveal the total taken from the aid budget over five years is now estimated at $7.6 billion.

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

The Australian Council for International Development, the peak body for Australia’s independent overseas aid sector, says it’s pleased the Government has worked rapidly to set out a clear framework for how Australia’s $5 billion aid program will operate.

“The ultimate test of this new approach is whether it can make a strong, sustainable impact in helping the poorest overcome poverty, and this is what we will be watching for,” Marc Purcell, Executive Director of ACFID, said.

“We welcome the Government’s focus on areas including women’s empowerment, health and education, governance, agriculture, fisheries and water and private sector engagement.  

“We also welcome benchmarks on transparency, effectiveness and results. Australian NGOs have long upheld these standards as core components of effective poverty reduction.

“The work to be done now by the Government is moving these high level directions into practical initiatives that benefit the poorest in developing countries. We stand ready to bring our deep experience and know-how to assist the Government in turning its vision into a reality.

“After a period of aid cuts and departmental restructure, we hope that the new aid paradigm delivers impact and predictability."

World Vision Chief Executive, Tim Costello said he was pleased to see a continued focus on poverty reduction, human development, health, education and the empowerment of women.

“These are important enablers of economic growth,” he said.

The Government has also put more flesh on the bones of how its ‘aid for trade’ approach will be implemented.

“Helping poor people access international markets is important, however we want to make sure the benefits of investment in ‘aid for trade' really do reach poor farmers and struggling labourers’ pockets,” Tim Costello said.

He also welcomed the Government’s commitment to a new innovation fund in the aid program. It has great potential to improve the wellbeing of the most vulnerable people in our region.

“This new fund, open to all actors in the aid community, has the potential to seed new partnerships for more effective aid delivery.”

CEO of ChildFund Australia Nigel Spence said his organisation also welcomed the increased clarity provided by the Foreign Minister on the future direction of Australia’s aid program.

“As a leading non-government organisation (NGO), the new policy provides many opportunities for us to work closely with the Government to deliver programs that accelerate poverty reduction in our region.

“ChildFund also wholly supports the government decision to continue investing in programs focused on health and education, as well as its recognition of the role played by Australia in providing humanitarian assistance in our region.

“ChildFund recognises and agrees that the private sector has an important role to play in generating economic growth, creating jobs and raising living standards for people in poor communities.

“However, it is important to note that economic growth without attention to inclusion and equity will fail to reach the poorest. For economic growth to be truly regarded as successful in reducing poverty, it is essential that it is responsible, inclusive and equitable,” Spence said.