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Australia's Aid Cuts and the Shrinking National Soul

24 May 2017
By Reverend Tim Costello AO FAIIA
Rations being distributed in Uganda. Photo: Moses Mukitale, World Vision.
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This year, World Vision was hoping for a visionary budget. Instead, Australia’s dwindling foreign aid funding demonstrated dumb economics and provided stark evidence of Australia’s moral famine. 

In the lead-up to the federal budget, we heard National MP Andrew Broad say, “what we do in aid defines who we want to be as a people.” I couldn’t agree more with his sentiment but was surprised to hear it coming from a member of a government that has slashed Australia’s aid budget to its lowest point in history. Andrew Broad said it was a matter of taking a global view and showing leadership.

This view is shared by progressive conservatives internationally, such as Theresa May’s government in Britain and Angela Merkel’s in Germany. But sadly, Broad’s progressive view is not shared by his own government. The Turnbull government’s budget will see aid rise in line with the consumer price index for the next two financial years but then be frozen at that level for two years. This represents a $303 million cut in real terms.

A country’s aid budget is generally measured as a proportion of a nation’s gross national income (GNI). We are already sitting at our lowest-ever level, 0.22 per cent of GNI: that is, we give 22 cents in every $100 to the world’s poorest people. This is a paltry contribution for one of the world’s most prosperous nations, and is seen as such.

When our Australian aid funding is put in the freezer in 2020-21, this figure will sink to a shocking new low of just 0.20 per cent of GNI. Compare this to the UK’s commitment of 0.7 per cent of GNI. Theresa May has stood up to disgruntled Tory backbenchers who believe the money should be spent on domestic services or defence, and she is rightly proud of her government’s record on humanitarian aid.

Here in Australia there was bipartisan support for an aid target of 0.5 per cent just a few years ago. That now seems a distant memory. Instead, the Turnbull/Morrison budget has revealed that we are hitching our wagon to the new populism, defined by nationalism, protectionism, self-interest and fear.

Rather than joining the compassionate conservatives of Europe, we are defining ourselves as a nation that is insular and inward-looking. And this won’t change anytime soon. Our Minister for Foreign Affairs Julie Bishop has said the government won’t look at boosting aid until the budget is back in surplus. The government will use the ‘savings’ for other priorities, such as national security measures.

These cuts represent a shrinkage of our national soul.

Just last week I was in Uganda at the world’s largest refugee camp, Bidi Bidi, and a second camp, Imvepi, where aid agencies feed the more than 2,000 refugees arriving every day. These people are fleeing famine in war-torn South Sudan. A human column is crossing the border, including, heartbreakingly, thousands of unaccompanied children. Our people on the ground have documented more than 9,000 children arriving alone: some have been shot at, some show signs of abuse, many are starving. Our trusted workers take them to World Vision’s Child Friendly Spaces, show them love and care, and reassure them that it’s okay, the nightmare’s over.

But when I was there, international funding shortfalls meant that we were having to halve the monthly rations of sorghum that we could give to most refugees. This is the depth of need that we are facing in the world today. South Sudan is in famine, and Somalia, Kenya and Yemen are on the brink. This is a hunger crisis of monumental proportions.

The increasing scale, frequency and impact of natural disasters in our region combined with the devastation of protracted crises like the conflict in Syria and the critical hunger in Africa, means that the global gap between needs and funding has never been greater.

According to recent UN figures, the number of people needing humanitarian assistance has almost doubled. In this context, World Vision asked for Australia’s Humanitarian Emergency Fund to be doubled to address this urgent need. While we welcome this year’s rise from $130 million to $150 million, it simply doesn’t address the size of the problem.

Long-term vision is required.  Not only do we need to have a flexible response capability for rapid-onset disasters and conflict spikes through an enlarged emergency fund, we also need to invest more in prevention and long-term development if we want effective solutions. If our spending is ineffective and shortsighted, then Australians will pay for it dearly when we are forced to use the military to intervene in conflict or provide emergency funds to patch up preventable disasters.

When we invest in long-term prevention, we save both lives and money.

For example, World Vision with several global partners retrofitted 160 Nepalese schools to withstand earthquakes. When a 7.8 magnitude earthquake hit Nepal in 2015, all retrofitted schools survived, while more than 6,000 other schools were severely damaged or destroyed. Every dollar we invest in prevention and resilience saves us between $2 and $80 in post-disaster response. Cutting the aid budget is not just morally reprehensible. It is dumb economics.

A visionary budget would also have seen our values aligned with our interests. Global economic integration means that our prosperity depends on the prosperity of every other nation, particularly in the developing countries of our region. Therefore, failing to prioritise aid is not just an abrogation of our values, it is a limited, even myopic, view of what’s in our national interest.

Building trade capacity in developing countries is as much in our interest as theirs, which is why we should invest more in increasing the proportion of Australia’s ‘aid for trade’ portfolio, which is invested in programs that build the productive capacity of developing countries. Micro, small and medium enterprises (also known as the ‘missing middle’) are the engines of innovation and employment in developing countries. Increasing their access to markets is another way to get bang for our buck in the aid budget. World Vision Australia has witnessed the impact that programs providing finance to small businesspeople and farmers can have. It connects them to local value chains, increases productivity and increases capacity to sell to local, national and international markets.

World Vision provided a US$4,000 (AU$5400) micro-finance loan to a Sri Lankan woman named Janaki running a broom and mat business. With this small investment, she employed an additional 10 people and began trading internationally. This is how today’s aid recipients become tomorrow’s trading partners.

Federal budgets reflect a nation’s values. As the compassionate conservative Andrew Broad said, the aid budget is symbolic of whether we want to be a generous and compassionate nation; it moreover reinforces our credentials as a responsible international player. These values were sadly missing from this budget.

Australia’s failure to shoulder our fair share of the development and humanitarian load means we are failing to save lives. We are failing to strengthen human rights, economies and a stable world.

Reverend Tim Costello AO FAIIA  is chief advocate of World Vision Australia and served as CEO from 2004 to 2016. He has been a Fellow of the AIIA since 2014.

This article is published under a Creative Commons Licence and may be republished with attribution.