With Australians heading to the polls  this Saturday, Mark Rice, Health Policy Advocacy Manager from RESULTS Australia, discusses what the result will mean for goverment spending on international development.

Why Australia’s development policies matter

The people with an interest in the outcome of Australia’s Federal election held this Saturday 7 September are not just Australia’s 15 million voters, but also members of the international community and the more than 1 billion people living in absolute poverty.

AUSAIDThe reason for this interest is that Australia has become a more significant player in international development in the last 10 years, due to the following developments:

  • Australia’s official development assistance (ODA) has nearly trebled in Australian dollar terms in the last 10 years, although the increase in aid as a percentage of Gross National Income (GNI) is more modest – from 0.24% to 0.37%.
  • Australia’s share of total aid by Development Assistance Committee members, expressed in US dollars, has more than doubled over the last 10 years.
  • In absolute terms, Australia is now one of the largest contributors to aid for education, and to multilateral organisations such as the Global Partnership for Education and the Asian Development Bank.

Many observers in Australia and abroad will be asking whether this leadership role will continue post 7 September.

What the alternatives mean

In the formal election campaign, international development has only rated a mention in media coverage and campaign material by the larger political parties near the end of the campaign, when the Opposition parties identified a freeze on aid growth for several years as a savings measure (see below).

However, Robin Davies from the Australian National University Development Policy Centre has trawled through various statements and media releases from the different parties to produce a summary of the key similarities and differences between the parties. His main conclusion is that, in spite of the parties’ rhetoric, the similarities outnumber the differences.  See http://devpolicy.org/separated-at-birth-how-to-tell-labor-and-the-coalition-apart-on-aid-and-development-20130822

The Similarities

The incumbent Labor Government, with Kevin Rudd recently reinstated as Prime Minister, and the Liberal-National Coalition, currently led by Tony Abbott MP, take a similar approach on the following issues:

  1. Both parties continue to support increasing Australia’s aid to 0.5% at some stage in the future.  However, based on the savings announcement by the Coalition, it may be in the more distant future.
  2. Both parties are, for the first time, committed to having a dedicated Minister for International Development.
  3. Both parties endorsed all the recommendations of the Independent Review of Aid Effectiveness, which reported in 2011.
  4. Both parties are committed to increasing the emphasis of the aid program on private sector development, including through support for ‘aid for trade’ and partnerships with business.
    1. Both parties are likely to rely on the aid program to support at least some of the offshore elements of Australia’s asylum-seeker management regime. 

The Differences

  1. Aid volume. In the Budget for the 2013-14 financial year, released in May, the Labor Government postponed the date for aid reaching 0.5% of GNI to 2017-18.  In an economic statement released in early August, the Government reduced planned aid for the 2015-16 and 2016-17 financial years, which makes the achievement of 0.5% in 2017-18 unlikely.  Based on the revised estimates in the economic statement, Australia’s aid would need to increase by $2 billion or 28% in 2017-18.  Expecting this large increase to occur in one year requires a similarly large leap of faith.

As 2107-18 approaches, a re-elected Labor Government is likely to reschedule the date for reaching 0.5%, but is still likely to deliver larger annual aid increases than a Coalition Government over the next three years. The Coalition has proposed a freeze on Australian aid in real terms until the Federal Budget returns to balance, which could result in aid being up to $1.7 billion lower in 2016-17 than the amount proposed by Labor.  The Coalition had previously supported making annual increases subject to the achievement of yet-to-be-specified aid management benchmarks or ‘hurdles.’  It is not clear whether the zero real growth proposal represents a minimum level for aid, and some increases could still occur if benchmarks are achieved.

  1. Geography. The Coalition would phase out aid to Latin America and the Caribbean and consolidate, but perhaps not substantially reduce, aid to sub-Saharan Africa.
  2. Private sector development. The Coalition would likely give higher priority than Labor has to local enterprise and skills development, including through a new enterprise challenge fund or funds.
  3. Climate change. The Coalition is likely to reduce aid to reduce net greenhouse gas emissions in developing countries (climate change ‘mitigation’) but, in the end, it will most likely allow the use of aid to fund climate change adaptation programs.
  4. Multilateral aid. The Coalition has indicated to increase emphasis on the focus on the Asia-Pacific in assessing the effectiveness of, and allocating resources to, multilateral organisations.  Australia would be unlikely to rejoin the International Fund for Agricultural Development, might not join the African Development Bank and could discontinue discretionary funding to the International Labour Organisation.
    1. Asylum seekers. The Coalition is likely to oppose the use of aid to meet domestic asylum seeker costs. Logically, they would oppose the use of aid for community detention offshore but, in practice, they might follow Labor’s policy.

As you can see, an assessment of the alternative approach by a potential Coalition Government involves a significant amount of speculation.  Even the latest announcement of a three-year freeze on aid levels in real terms raises more questions than answers.

What is clear is that campaigners will need to step up our efforts to maintain an Australian leadership role.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of the RESULTS UK.