Aid organisations have condemned reports that the Turnbull government is considering yet another cut in the annual foreign aid budget – this time $400m – to find savings in the run-up to the budget.
Mathias Cormann, the finance minister, has refused to buy into reports the Department of Foreign Affairs and Trade is modelling ways to cut a further 10% from the foreign aid budget. Australia’s aid contribution has been cut repeatedly since 2013.
Fairfax Media reported on Wednesday that Dfat was modelling a number of scenarios, including a substantial reduction in aid to south-east Asian nations that are considered to have reached “middle-income status”.
Defence spending up in budget, foreign aid down
An alternative scenario, according to the Fairfax report, is for Australia to stop delivering aid in one whole sector, such as health.
Australia’s foreign aid contribution, $3.9bn in 2017-18, is already its lowest on record, just 22 cents for every $100 of gross national income.
On Thursday Cormann was asked if the reports were true but he would not buy into them or deny them. “The budget will be delivered on the second Tuesday of May,” he said.
Save the Children’s director of public affairs and policy, Mat Tinkler, called on the prime minister, Malcolm Turnbull, to rule out further cuts for developing countries.
He said less than a day ago Australia’s minister for international development, Concetta Fierravanti-Wells, had indicated in the Senate that the government would maintain the overseas aid budget at $4bn a year over the next two years, so he was especially alarmed by the report.
“How does that square with today’s media reports that the government is considering hacking another $400m from the aid budget, a lifeline to many of the poorest people in our region?” Tinkler said.
“We’re calling on the treasurer and prime minister to back the minister for international development and announce unequivocally that there will be no more cuts to overseas aid, now or into the future.”
In cumulative terms, Australia’s foreign aid budget has been cut, and is projected to be cut, by almost one third – 32.8% – since the Gillard government’s 2013–14 budget, which represented a high point for aid funding.
In the 2017 budget the government said Australia’s foreign aid contribution would increase in line with inflation in 2017–18 and 2018–19, but it decided to freeze Australia’s contribution at $4bn in 2019–20 and 2020–21.
According to the parliamentary library those two consecutive freezes – worth an estimated $303m in savings over the forward estimates – represented the fifth and sixth cuts, in real terms, to aid funding since 2013-14.
The freezes also accelerated Australia’s diminishing aid generosity: our foreign aid contribution as a proportion of gross national income is scheduled to fall to an unprecedented low of 20 cents for every $100 gross national income in 2020–21.
“These cuts are also expected to see Australia fall further down the ladder of developed country donors and well below the current Organisation for Economic Co-operation and Development ODA/GNI average of 0.32%,” the parliamentary library said.
“In 2016 Australia ranked 17th out of 29 OECD bilateral donors for aid generosity, and is projected to fall to 21st in the coming years. Australia is currently the world’s 13th largest economy.”
Tinkler said Australia was a wealthy, recession-free country and could afford to play its part helping the poorest people in the world through a world-class aid program.
“If we don’t then we risk damaging our reputation globally and undermining international efforts to create a stable and prosperous world,” he said. “We urgently need to scale up aid but instead Australia has slashed overseas aid to developing countries by 30% in the last three years.”