Government Postpones Aid Target, But Ramps Up Aid

As part of the 2012 Federal Budget, the government delayed its target for foreign aid by one year. However, it announced a series of new measures to monitor Australia’s aid programs. Stephen Howes, Director at ANU’s Development Policy Centre, spoke to The Conversation about the future Australian aid.

You could argue that this budget was weak in scaling up the aid program, but very effective overall. It is important to consider both the dimensions and both the quality and quantity of aid programs. In terms of the numbers, the government has pressed the pause button on the aid-to-Gross-National-Income ratio, which it had been increasing and had committed to increase to 0.5 by 2015.

They’ve maintained that level at 0.35 for this year. They have also increased the target of 0.0.5 by about $300 million this year, which is a slight increase in real growth. The target was pushed back and it will still be difficult to achieve even after the one-year delay. This is because you need to increase your aid budget by an average of $1 billion each year to reach the 0.5 target.

The Aid Target

It remains to see how serious the government really is about the aid target. And it remains to also be seen if the opposition will accept this delayed commitment. The agreement reached between the two main parties was one of the positive aspects of the previous commitment.

The budget contains a lot of useful material, which I believe is a good indicator of the budget’s effectiveness. Many of the responses to the aid review were included in the budget. We know that they have released the four-year strategy, although it will take time to review those documents and do a thorough assessment.

The government has now released a strategy to increase the assistance program’s scale. We don’t get to 0.5, but we do get to 2015-16.

The results framework was also published by the government, which allows us to try to hold the aid program responsible for its failures. It’s hard to judge whether the program is succeeding or failing if we don’t know what it’s trying.

A committee for independent evaluation was also establish by the government. This committee is an independent, senior body that will oversee AusAID’s evaluations. It will also ensure independence and quality. This is a significant reform.

Related To Effectiveness

Two other remarkable features are related to effectiveness. The first is that the majority of this year’s increase was through global programs rather than country programmes around 60% of that $300,000,000 increase. This means that there are significant increases in non-governmental organisations and multilateral organizations such as the Asian Development Bank or some UN agencies.

This is something that the aid review recommended. I believe it makes more sense for Australia than to try to do everything all by itself to invest in other organizations. We have limited resources, so we must work with others, especially as we scale up. This is a good thing.

However, the Latin America allocation did not increase, but it did not decrease. According to the aid review, we should stop providing assistance to Latin America

The aid review had recommend that the country aid to Africa maintain at a constant level. However, there has been a rapid expansion of the aid program. Rapid expansion of Africa’s aid program does not indicate sufficient consolidation.

Overall, however, the budget seems to be a significant step forward in the effectiveness agenda. Although we should see more effective aid from the budget, it is not as much as we would like or as the government has previously committed to.