Foreign Affairs - Department of Foreign Affairs and Trade (DFAT)


Budget Review 2010-11 Index

Budget 2010–11: Foreign affairs

Department of Foreign Affairs and Trade (DFAT)

Dr Frank Frost; Nina Markovic

Introduction

The Foreign Affairs and Trade Portfolio Budget Statements 2010–11 state that in 2010–11 the Department of Foreign Affairs and Trade (DFAT) will ‘… seek to advance the national interest by enhancing Australia’s relations multilaterally, regionally and bilaterally, heightening Australia’s status and influence as a middle power on global and regional developments and furthering national stability and prosperity’.[1] Major emphases will include advancing engagement with Australia’s main strategic ally the United States, building on the mature and broad-ranging relationship with Japan, enhancing growing links with China and the Republic of Korea, continuing to bring relations with India into the front rank of Australia’s international partnerships, and expanding comprehensive cooperation with Indonesia. Key multilateral emphases will include the G-20 (with summits in Canada and the Republic of Korea), the World Trade Organization (WTO), and the South Pacific Forum. The Government will continue support for the International Commission on Nuclear Non-Proliferation and Disarmament (ICNNPD), the bid for a non-permanent seat on the United Nations (UN) Security Council (in 2013–14) and support for the enhancement of regional architecture.[2]

The ‘total net resourcing for DFAT’ for 2010–11 is $2.212 billion, compared to the ‘actual available appropriation’ for 2009–10 of $2.072 billion, representing an increase of 6.8 per cent. The ‘Departmental appropriation’ for 2010–11 is $1.328 billion for operating expenses, compared to the actual available appropriation for 2009–10 of $1.245 billion, which is an increase of $83 million, or 6.7 per cent.[3] The figure for the ‘Departmental appropriation’ excludes a range of items not under the control of the Department, including ‘administered expenses’ (such as contributions to international organisations and UN peacekeeping operations, costs of employee pension schemes and the cost of the passport program).[4] Average DFAT staff numbers across the three outcomes are projected to increase by 60 from 3562 to 3622.[5]

The ‘total net resourcing for DFAT’ for 2010–11 ($2.212 billion) includes a significant amount, $525.5 million, which has been carried forward from the previous year.[6] In relation to the funds carried over from 2009–10, it is understood that there may sometimes be gaps between the time when moneys are appropriated and when they are actually spent, for reasons including delays arising from security factors, the need to arrange cooperation with other partners and the timing requirements of particular renovation or construction projects (such as for overseas missions).

While the DFAT budget allocation for 2010–11 has been increased from the previous year, the overall level of support for Australia’s diplomatic capacities has been subject to recent critical comment. The Lowy Institute for International Policy stated in a March 2009 report that Australia’s overall number of overseas posts, and the proportion of diplomatic staff deployed overseas, are at the lower end of the range of members of the Organisation for Economic Co-operation and Development (OECD).[7] The Lowy Institute report stated that reductions in diplomatic personnel numbers over the past two decades (including a decline between 1996 and 2008 of about 25 per cent in the number of ‘Australia-based’ staff deployed overseas) has meant that ‘Australia’s overseas diplomatic network is hollowed out and under increasing strain’.[8] The Lowy Institute recommended the provision of increased resources for DFAT to provide for 75 additional diplomatic staff and a further 20 overseas posts in areas where Australia, in the view of the Institute, needs increased representation.[9]

It should be noted that the Government has indicated that a new embassy will be established in Addis Ababa (in Ethiopia).[10] The embassy in Addis Ababa will support Australia’s bid for a UN Security Council seat, but it will also contribute to other objectives.[11]

Administrative changes

The Foreign Affairs and Trade portfolio’s organisational chart for 2010–11 envisages two Parliamentary Secretaries with responsibilities for Trade and International Development Assistance.[12] This contrasts with the structure last year, which also had a third position of Parliamentary Secretary for Pacific Islands Affairs, a position the Government decided to discontinue following Duncan Kerr’s retirement on 30 October 2009. The chart also shows that the heads of all Foreign Affairs and Trade portfolio agencies have changed since last year’s Budget, including that of DFAT Secretary, now held by Dennis Richardson.

On 13 January 2010, Dennis Richardson, a former ambassador to the US and Director-General of ASIO for nine years, became the Secretary of DFAT, replacing Michael L’Estrange (who held the position from January 2005 and is now Director of the National Security College at the Australian National University).[13]

Tony Walker from The Australian Financial Review observed that Mr Richardson has already instituted a number of internal reforms aimed towards making the Department a stronger actor in ‘Canberra’s “contested” foreign policy space’ and more involved in policy planning activities—possibly in line with the foreign affairs departments of major partners such as the United States.[14] The Government has not to date issued a White Paper on foreign policy.

Outcome One

Outcome One comprises ‘the advancement of Australia’s international strategic, security and economic interests including through bilateral, regional and multilateral engagement on Australian Government foreign and trade policy priorities’.[15]

The Budget has delivered a reduction of $120.13 million (or 12.4 per cent) in funding for Outcome One—from estimated actual expenses of $967.2 million in 2009–10 to $847.1 million in the 2010–11 Budget.[16] Funding for ‘public information services and public diplomacy’ (program 1.3) has decreased significantly from estimated actual expenses of $65.95 million in 2009–10 to estimated expenses of $28.83 million in 2010–11 (or by 56.3 per cent).[17] No new initiatives for public diplomacy have been introduced beyond the expected funding for the Australian Pavilion at the Shanghai World Expo, which will close down on 31 October 2010.[18] It is likely that other agencies, such as the Australian Trade Commission (Austrade), will be more engaged in promoting a positive image of Australia overseas (for instance, through an added responsibility in the 2010–11 Budget to promote international education).[19]

Staffing levels for Outcome One are expected to increase by eight. This is despite the reduced funding and an extensive foreign policy agenda under Outcome One, which includes new Budget initiatives such as Australia’s increased civilian engagement in Afghanistan, stepped up bilateral and multilateral relations with African, Caribbean and Latin American countries, and membership of the Asia-Europe (ASEM) dialogue process and the Organization for Security and Co-operation in Europe (OSCE) as an Asian partner.[20] As part of the Government’s enhanced multilateral engagements, the Budget envisages a closer Australian relationship with the Gulf Cooperation Council (GCC) through establishment of an Australia–GCC Foreign Ministers Strategic Dialogue, as well as further engagements with the Arab League and its members. Another organisation with which Australia will enhance cooperation under this Outcome is the South Asian Association for Regional Cooperation.[21]

Budget Measures: Budget Paper No. 2: 2010–11 states that on 12 November 2009 the Prime Minister announced that Australia would enhance bilateral engagement with India. This is envisaged to take place through the provision of $129.9 million over five years from 2009–10, including $26.9 million in capital funding.[22] Budget Paper No. 2 expects that Australia’s diplomatic presence will be increased over this period with enhanced representation in Mumbai and Chennai as a result of this measure.[23] There was no additional funding for the measure in this year’s Budget, even though the measure was included under ‘Expense Measures’ in Budget Paper No. 2.

New Budget measures

Increased civilian engagement in Afghanistan with a focus on Oruzgan Province

One of the new measures announced in the Budget is Australia’s increased civilian engagement in Afghanistan as part of an integrated ‘whole-of-government’ approach.[24] For this measure, the Budget allocates to DFAT $68.4 million in departmental expenses for two consecutive years ($34.1 million for 2010–11 and $34.3 million for 2011–12).[25] This measure has increased departmental capital funding by $16.9 million in 2010–11.[26] As a result of this measure, the funding provided to the Foreign Affairs portfolio (including AusAID and DFAT) has been topped up by $194.1 million over two consecutive years from 2010–11.[27]

Transition towards civilian security arrangements at the Baghdad Embassy

The Australian Government has allocated $51.9 million over two years ($23.8 million for 2010–11 and $28.1 million for 2011–12) for civilian security transition at the Australian Embassy in Baghdad due to the ‘improved security situation in Iraq’, although just how much the situation has improved has been subject to question.[28]

The Canberra Times reported that as a result of this Budget measure, private contractors will be engaged to guard the Baghdad Embassy.[29]

Outcome Two

Outcome Two covers the ‘protection and welfare of Australians abroad and access to secure international travel documentation through timely and responsive travel advice and consular and passport services in Australia and overseas’.[30] For 2010–11, budgeted outlays are estimated at $282.9 million, a slight reduction from the 2009–10 expenditure of $289.1 million, but staff levels are projected to increase from 977 to 1022.[31] The Government is allocating $100.8 million over six years to provide a new passport issuing system aimed at enhancing the security and efficiency of passport operations. The new system will provide improved security and efficiency through four elements:

  • ‘eScan' will enable large-scale scanning of passport applications and supporting documents
  • ‘eFlow’ will enhance the flow of data in the passport approval process
  • ‘eCase’ will enable increased capacities to prevent fraud and improve case management, and
  • ‘ePrint’ will allow for quality assured and bulk printing of personal information into passports (including biometric chip encoding).

The program to enhance the security of Australian passports comes in the wake of the use of forged Australian passports by persons involved in the assassination of a member of the Palestinian group Hamas, in Dubai in January 2010.[32] The Government expects that the new program will save the budget $10.2 million by 2015–16.[33]

Outcome Three

Outcome Three comprises ‘a secure Australian Government presence overseas through the provision of security services and information and communications technology infrastructure, and the management of the Commonwealth’s overseas owned estate’.[34] Total budgeted expenses for Outcome Three are projected to increase by $32.9 million, from estimated actual expenses for 2009–10 of $222.8 million to estimated expenses for 2010–11 of $255.7 million.[35] The staffing levels for this outcome are likely to increase by seven to a total of 591.

The Australian National Audit Office (ANAO) recently reported that the network of DFAT’s ‘89 overseas diplomatic posts’, and its offices in Australia contribute to the projection of a positive image for Australia and to the overall success of Australia’s diplomacy.[36] The report suggested that DFAT needs to increase its efforts to strengthen the administrative processes required to support the effective management of Commonwealth-owned estate under the DFAT portfolio.[37]


[1].    Australian Government, Portfolio budget statements 2010–11: budget related paper no. 1.10: Foreign Affairs and Trade Portfolio, Commonwealth of Australia, Canberra, 2010, p. 3, viewed 12 May 2010, http://www.dfat.gov.au/dept/budget/index.html

[2].    Ibid, pp. 3–15.

[3].    See table 1.2, ‘Agency resource statement’ in Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., pp. 16–17.

[4].    Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., p. 24. For further discussion of the distinction between the figures for ‘total net resourcing’ for DFAT and ‘Departmental appropriations’ see Blue Ribbon Panel Report, Australia’s diplomatic deficit: reinvesting in our instruments of international policy, , Lowy Institute for International Policy, Sydney, March 2009, pp. 24–25 and 61–62, viewed on 13 May 2010, http://www.lowyinstitute.org/Publication.asp?pid=996. See also A Duchen, ‘Diplomatic Depletion’, The Interpreter, Lowy Institute for International Policy, 12 May 2010, viewed on 12 May 2010, http://www.lowyinterpreter.org/post/2010/05/12/Diplomatic-depletion.aspx

[5].    This number excludes ‘Export Finance Insurance Corporation (EFIC) staff involved in the National Interest Account’ (nine in 2009–10 and eight in 2010–11), Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., pp. 22, 35, 41.

[6].    Ibid., pp. 16–17.

[7].    Blue Ribbon Panel Report, Australia’s diplomatic deficit: reinvesting in our instruments of international policy, op cit., pp. 19–20. The Report states that among the 30 members of the OECD, Australia with ‘91 missions’ is well below the average number of 150. Among the 30 members, Australia is ranked the fifth lowest in numbers of missions, with only Ireland, Luxembourg, the Slovak Republic and New Zealand operating fewer posts.  

[8].    Ibid., p. 47.

[9].    Ibid, pp. 47–48. The Lowy report recommended the opening of new Australian posts in regional India (including Mumbai), regional China (including Chengdu and Chongqing), regional Indonesia (including Makassar), Africa (including North Africa), Latin America, North Asia (including North Korea and Mongolia), and Central Asia (including Kazakhstan).  

[10].  ‘Sunday Profile’, ABC Radio National, 15 May 2010, transcript viewed on 17 May 2010, http://www.abc.net.au/sundayprofile/stories/2900317.htm?site=sydney

[11]. Hamish McDonald in The Sydney Morning Herald suggests that this mission would include a defence representative ‘to co-ordinate support for the African Union’s growing security role in places such as Sudan and Somalia’, H McDonald, ‘Diplomats are learning to do more with less’, Sydney Morning Herald, 12 May 2010, p. 16, viewed 17 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2FD2OW6%22

[12]. It is important to note that the salaries for the two Parliamentary Secretaries are not paid from the DFAT budget.

[13]. Department of Foreign Affairs and Trade, ‘Biographical details: Mr Dennis Richardson’, DFAT website, viewed 14 May 2010, http://www.dfat.gov.au/dept/exec/richardsondennis_bio.html; S Smith (Minister for Foreign Affairs), Secretary of the Department of Foreign Affairs and Trade, , media release, 13 August 2009, viewed 14 May 2010, http://www.foreignminister.gov.au/releases/2009/fa-s090813b.html; Australian National University, ‘Director’s Profile’, National Security College website, viewed 14 May 2010, http://nsc.anu.edu.au/director.php

[14]. The re-branding of the Global Issues Branch as the Policy Planning Branch, and the dispatch of DFAT’s planning section head on a ‘study tour’ to major partners (UK, US) accentuates this trend, according to Tony Walker. See T Walker, ‘Just the man for such a mission’, Australian Financial Review, 16 March 2010, p. 61, viewed 12 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2FY06W6%22

[15]. Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., p. 5.

[16]. Ibid., p. 22.

[17]. Ibid.

[18]. Shanghai World Expo 2010 Australian Pavilion, viewed 15 May 2010, http://www.australianpavilion.com/en/default.aspx

[19]. Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., p. 4.

[20]. Australia is expected to join the ASEM dialogue process together with Russia at the ASEM 8 Summit in Brussels on 4–5 October 2010. For more information see European Commission: External Relations, ‘The Asia-Europe meeting’, viewed 15 May 2010, http://ec.europa.eu/external_relations/asem/index_en.htm ASEM infoboard, viewed 15 May 2010, http://www.aseminfoboard.org/ and ASEM 8 Homepage, viewed 15 May 2010, http://www.asem8.be/

[21]. Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., pp. 24–28.

[22]. Australian Government, Budget measures: budget paper no. 2: 2010–11, Commonwealth of Australia, Canberra, 2010, pp. 197–98, viewed 12 May 2010, http://www.aph.gov.au/budget/2010-11/content/bp2/html/index.htm

[23]. This is in line with the Lowy Institute Blue Panel Ribbon report’s recommendation. See endnote 9.

[24]. International agencies have for years called on Coalition partners to increase civilian (and policing) assistance to Afghanistan.

[25]. Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., p. 18.

[26]. Ibid., p. 19.

[27]. Budget measures: budget paper no. 2: 2010–11, op. cit., p. 194.

[28]. Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., p. 15. For discussion of the security situation, see AH Cordesman and A Mausner, US withdrawal and Iraqi security forces. The Need for Continuing Aid, Center for Strategic and International Studies, 12 May 2010, viewed 17 May 2010, http://csis.org/files/publication/100512_ISF.pdf; AH Cordesman, The uncertain security situation in Iraq: trends in violence, casualties and Iraqi perceptions, Center for Strategic and International Studies, 17 February 2010, viewed 17 May 2010, http://csis.org/files/publication/100217_iraq_security_study.pdf; See also Maplecroft, ‘Iraq, India and Colombia top Maplecroft terrorism list’, February 2010, viewed 17 May 2010, http://www.maplecroft.com/about/news/terrorism_risk_index_feb_10.html

[29]. P Dorling, ‘Mercenaries to guard Aust embassy’, Canberra Times, 13 May 2010, p. 3, viewed 14 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2FTPOW6%22

[30]. Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., p. 34.

[31]. Ibid, p. 35.

[32]. P Smith, ‘Budget 2010: $101 million to strengthen passport security’, Australian Financial Review, 13 May 2010, p. 56, viewed 17 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2FQZOW6%22

[33]. S Smith (Minister for Foreign Affairs), New funding for passports and consular awareness, media release, 11 May 2010, viewed 13 May 2010, http://www.foreignminister.gov.au/releases/2010/fa-s100511.html

[34]. Outcome Three comprises ‘a secure Australian Government presence overseas through the provision of security services and information and communications technology infrastructure, and the management of the Commonwealth’s overseas owned estate’, Portfolio budget statements 2010–11: Foreign Affairs and Trade Portfolio, op. cit., p. 5.

[35]. Ibid., p. 41.

[36]. Australian National Audit Office, ‘Management of the Overseas Owned Estate. Department of Foreign Affairs and Trade’, Performance Audit Report no. 32, 2009–10, Commonwealth of Australia, Canberra, 2010, viewed 14 May 2010, http://www.anao.gov.au/uploads/documents/2009-10_Audit_Report_32.pdf

[37]. Ibid., p. 13.


Facebook LinkedIn Twitter Add | Email Print