Our foreign aid programs should be subject to the same tests of value for money and effectiveness as every other program in the Federal Budget, including cost-benefit analyses.
This year Australia will spend around $4 billion on foreign aid.
This week, there have been a number of newspaper articles raising serious concerns about the effectiveness of aid delivery - questioning the priorities in Australia’s international development assistance program.
Australians are generous and often donate large sums of money to assist those in need.
Millions of dollars are donated annually to various charities, including those to support disadvantaged people, medical research, communities affected by natural disaster and much more.
One of the key questions often asked of organisations that collect and manage funds is about the amount of money that actually gets through to those in need.
Those donating money do not want an unreasonable proportion of their funds spent on administration or on projects that do not deliver real benefits to those in need.
Australians are also generous supporters of developing nations, both personally and as taxpayers through our foreign aid program.
The vast majority of the Federal Government’s foreign aid program is managed by the agency AusAID. There are many significant challenges to delivering aid to developing nations. Appropriately skilled staff must be found and the needs of local communities identified, so they can be most effectively supported.
Aid must be carefully targeted to ensure it does not damage local economies and that it does not lead to dependency. The aid budget should be focused on helping people in developing nations achieve long-term self-sufficiency. It is vital that our aid budget is used efficiently and effectively to help raise the standard of living of people in recipient nations.
Many people have contacted my office this week in response to the newspaper articles and expressed their deep concern that millions of dollars in foreign aid are apparently being used in ways which appear unlikely to support those most in need in developing nations.
While this is of great concern regarding the application of the current aid budget of around $4 billion per annum, it should be borne in mind that the foreign aid budget will have to double (at least) to meet the United Nations Millennium Development Goal target of 0.5% of Gross National Income (GNI) by 2015.
The Australian National Audit Office (ANAO) reported on our foreign aid program in November last year and raised concerns about a range of issues, including the reliance on “technical assistance”. Technical assistance often involves consultants, some of whom are highly paid, to provide advice and support in recipient countries. The ANAO report found almost double the proportion of the Australian aid budget was spent on consultants, compared with the OECD average.
It also raised concerns about the ability of AusAID to effectively manage large increases in the aid budget.
The Coalition has also expressed concerns about the potential for the Rudd Government to divert huge sums of money to support its campaign for a temporary seat on the United Nations Security Council.
This would involve hundreds of millions of dollars being directed to Africa and Latin America, regions that have a large numbers of UN votes.
While there is great need for aid in those parts of the world, Australia’s aid budget should be focussed on our region, where there are billions of people living in poverty and where Australian aid can have the greatest impact. Of particular concern is management of Australia’s aid to Papua New Guinea. The heavy use of consultants has resulted in some PNG people labelling it “boomerang aid” because the locals believe the (mostly) Australian consultants are the main beneficiaries.
Australia has poured billions of dollars into PNG over many years, with more than $400 million invested this financial year.
While a better targeted aid program cannot hope to overcome deep-seated social problems stemming from poverty, lack of services and corruption, every effort must be made to ensure Australian aid is having as much impact as it possibly can in supporting the lives of people in PNG.
I have called for an independent inquiry into the design and delivery of our foreign aid program, in the interests of Australian taxpayers and in the interests of the poor and needy people in our region.
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