Foreign aid is never popular, and it wasn’t going to come out on top in a federal budget that appears to have been designed to revive the Government’s political fortunes.
But we were not counting on Treasurer Joe Hockey announcing the largest ever cuts to aid in our history, given the aid budget had already been savaged in last year’s May budget and then in the mid-year (MYEFO) statement in December.
Last week's Budget stipulates an immediate $1 billion cut from the aid allocation, with a total of $3.7 billion being stripped over the next three years. The cuts will take Australia’s aid to the lowest levels in our nation’s history.
Some of our neighbours including Indonesia, Vietnam and Laos had their aid programs slashed by 40 per cent. But those with which we have refugee resettlement deals - PNG, Nauru and Cambodia – escaped with little or no reduction to their programs.
As a nation, we have demonstrated to the world that we have no shame when it comes to the treatment of asylum seekers. Now it’s as if the aid cuts are being worn as a badge of honour.
Joe Hockey talks about the ’targeted outcomes’ philosophy of the cuts, ‘build[iing] the prosperity and assist[ing] with poverty alleviation in our region’, in order to get ‘better bang for our buck in foreign aid'. But leading aid economist Stephen Howse argues the opposite: ‘The only way that you could get a 40 per cent cut in one year, is basically to kill off projects mid-stream. And, you know, that will be very damaging to the relationships, and it will also involve a huge waste of money.'
The emerging picture is that the cuts are profoundly inept and counter-productive, intended only for short-term political gain. Cambodia, one of the least successful aid programs survives, while others where the experts say there is ‘better bang’ are terminated. As Howes says of keeping the Cambodia allocation, 'it's clearly a political decision, rather than one based on performance'.
Others working in aid and development are equally bewildered. Micah Challenge head Ben Thurley points out that Australia 'has a growing economy worth $1.6 trillion and the sixth lowest debt in the world’ and therefore the cuts represent a ‘deeply ungenerous and short-sighted act’ that Caritas Australia CEO Paul O’Callaghan says will ‘weaken our global leadership role'.
If the foreign aid cuts are consistent with anything, it’s with the short-term political fix nature