Foreign affairs - Official Development Assistance (ODA)


Budget Review 2010-11 Index

Budget 2010–11: Foreign affairs

Official Development Assistance (ODA)

Dr Ravi Tomar

According to the Minister’s Budget Statement, Australia’s Official Development Assistance (ODA) budget for 2010–11 is $4349.3 million, $528.4 million more than the estimated outcome for 2009–10.[1] This represents a 9.1 per cent increase in real terms over the estimated outcome for 2009–10.

The amount of ODA a country provides is usually expressed as a percentage of Gross National Income (GNI), which is referred to as the ‘ODA/GNI ratio’. Australia’s adoption of new international accounting standards has led to a change in the methodology used to calculate Gross National Income (GNI). This has increased GNI by about four per cent and reduced the ODA/GNI ratio for 2009–10 to 0.31 per cent instead of the projected 0.34 per cent.[2]

GNI also increased due to stronger economic growth which resulted in an increase of nearly $530 million in the 2010–11 budget with the ODA/GNI ratio forecast to increase from the current level of 0.31 per cent in 2009–10 to 0.33 per cent in 2010–11.

Nonetheless, the Statement reaffirms the Government’s commitment to increasing the ODA/GNI ratio to 0.5 per cent by 2015–16:

The Government will provide an estimated $4349 million in total ODA in 2010-11, of which $3,762 million will be managed by AusAID. This is consistent with the Government’s commitment to scaling up ODA to 0.5 per cent of GNI by 2015-16.

Australia’s ODA/GNI ratio is forecast to increase to 0.33 per cent in 2010-11, up from 0.31 per cent in 2009-10 and the Government expects to increase Australia’s ODA to levels equivalent to 0.35 per cent of GNI in 2011-12, 0.38 per cent of GNI in 2012-13, and 0.42 per cent of GNI in 2013-14.[3]

How and where the money is spent is as important as the size of the ODA budget.

In keeping with the recommendations of the Australian National Audit Office (ANAO) performance audit report, AusAID’s Management of the Expanding Aid Program (2009):

... AusAID will focus on rolling out a comprehensive operational policy and management framework to reform business systems, operational guidance on new country strategy and planning architecture, updating the quality of reporting systems, and providing guidance on working through partner country systems in aid delivery.

...

AusAID is investing in strategic workforce planning and developing policies and practices aimed at attracting and retaining a skilled, knowledgeable and motivated workforce, including locally engaged staff.

In 2010-11 AusAID will undertake a review, together with partner governments, of advisers working in the aid program. The review will ensure that each adviser is the most effective, value-for-money response to meeting agreed needs and priorities. The review will also aim to provide a basis for more substantive changes to the way aid is delivered to increase aid effectiveness.[4]

To reflect this additional activity the AusAID departmental budget is to increase from an expected outcome of $141.2 million in 2009–10 to an expected $211.8 million in 2010–11.[5]

The Average Staffing Level (ASL) in AusAID is expected to increase by 56 from 907 to 963.[6]

New initiatives announced in the aid budget include:

  • an investment of $303.7 million over four years to assist developing country partners progress towards achieving their Millennium Development Goals (MDGs) in the education sector
  • an expenditure of $173.4 million over four years to help developing country partners achieve the health MDGs
  • an expenditure of $30.2 million over four years to support developing country partners improve the quality of life of people with disability
  • increased support for development in Afghanistan with an additional $140 million over two years
  • an investment of $323 million over four years to expand Australia’s development partnership with Indonesia especially in the education, health and governance sectors and
  • an investment of $346.9 million over four years to support capacity building and address other development challenges in Africa.

[1].    Unless otherwise indicated, all information is derived from: S  Smith  (Minister for Foreign Affairs) and B McMullan (Parliamentary Secretary for International Development Assistance), Budget: Australia’s international development assistance program: a good international citizen, budget statement, Commonwealth of Australia, Canberra, 11 May 2010, viewed 18 May 2010, http://www.budget.gov.au/2010-11/content/ministerial_statements/ausaid/download/ms_ausaid.pdf

[2].    This has been the cause of some confusion.  For a detailed discussion of the issue, see A Hewitt, ‘Time for AusAID to lead policy on development’, Canberra Times, 14 May 2010, p. 19, viewed 14 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2FHCPW6%22

[3].    S  Smith  (Minister for Foreign Affairs) and B McMullan (Parliamentary Secretary for International Development Assistance), op. cit., p. 3.

[4].    Ibid., pp. 32–33.

[5].    However, see: Australian Government, Portfolio budget statements 2010–11: budget related paper no. 1.10: Foreign Affairs and Trade Portfolio, Commonwealth of Australia, Canberra, 2010, p.107, viewed 18 May 2010, http://www.dfat.gov.au/dept/budget/2010_2011_pbs/2010-11_AusAID.pdf —this puts the total for ‘departmental support’ at about $214.3 million.

[6].    Australian Government, Budget strategy and outlook: budget paper no. 1: 2010–11, Commonwealth of Australia, Canberra, 2010, Table C5, p. 6-70, viewed 18 May 2010, http://www.aph.gov.au/Budget/2010-11/content/bp1/download/bp1_bst6.pdf

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