Chapter 6
Conclusion
Introduction
6.1
Australians can be justifiably proud of the achievements of the
Australian aid program. As was noted during the committee's public hearing, 'we
are not starting from a low point'. Australia's aid program is highly regarded
internationally and has recently been positively reviewed by OECD DAC. The aid
program has made a significant contribution to efforts to achieve the
Millennium Development Goals (MDGs).
6.2
However, Australia can do more. Australia has a responsibility as a
successful and wealthy nation to continue to provide leadership in promoting
assistance to communities in developing countries. Assisting the world's
poorest to break out of extreme poverty should be the primary objective of
Australia's aid program. In the coming years, the committee hopes to see a more
bipartisan approach taken to Australia's aid program. Overseas aid should not
be viewed as a 'political football' and the aid budget should not be utilised
for short-term financial or political reasons.
6.3
It is clear that Australia's aid program is in a period of transition.
In accordance with Australia's broad international obligations to increase ODA
to 0.7 per cent of GNI and to achieve the MDGs the aid program has had a
long period of growth. However, deferrals of funding increases to reach the
bipartisan target of reaching 0.5 per cent of ODA/GNI, recent cuts and the
Australian Government's announced CPI indexation of the aid budget will
significantly impact the profile of Australia's aid program. Administratively,
the integration of AusAID into DFAT will also cause a level of disruption and
uncertainty within the aid program.
6.4
The committee has attempted to take a realistic and pragmatic approach
to the consideration of the funding cuts to Australia's aid program. In this
time of change, it has not sought to recommend dramatic reforms or the complete
reversal of announced policies. However, it has identified a number of specific
matters which should be improved by the Australian Government. In particular,
it has sought to preserve aspects of the aid program which are vital to its
effectiveness and will be necessary to meet Australia's international
obligations regarding development assistance in the future.
6.5
A summary of the committee's views and recommendations is below.
Summary of committee views and recommendations
6.6
A lack of strategic clarity in the Australian Government's approach to
Australia's aid program was evident during the inquiry. Accordingly, the
committee considers that the Australia Government should restate its policy
objectives for the Australian aid program with poverty reduction as the primary
consideration. Further, the Australian Government needs to more fully
articulate its aid policy framework and outline how its policy objectives will
link to programs and funding. Given the recent changes to the funding and
profile of the Australian aid program and international discussions concerning
the post-2015 development agenda, the committee also recommends that a white
paper process be undertaken to provide a long term strategic framework to guide
the direction and delivery of Australia's overseas aid program over the next
decade.
Recommendation 1
6.7
The committee recommends the Australian Government release an
overarching policy framework for Australia's aid program as part of the
May 2014 budget process.
Recommendation 2
6.8
The committee recommends the Australian Government undertake a white
paper process to refine the long term strategic objectives of Australia's aid
program and identify measures to achieve these objectives.
6.9
Due to fiscal pressures, increases to the aid budget necessary to reach
the 0.5 per cent of GNI have been deferred. While there remains a bipartisan
commitment to increase Australia's annual aid funding to 0.5 per cent of GNI,
the Australian Government has not indicated a date it intends to reach this
target.
6.10
The committee considers that returning a level of stability to overseas
aid funding is vital. In this context, the Australian Government's commitment
to annually increase aid funding by CPI is welcome. Further, the Australian
Government should ensure that the funding for aid does not fall over time. In
the view of the committee, the 0.33 ODA/GNI ratio should be viewed as the base
level of funding for the Australian aid program into the future.
6.11
Finally, the committee considers there is a need for a renewed
bipartisan commitment to reach the 0.5 per cent of GNI target by a set date. The
most effective mechanism to ensure this occurs would be an agreement between
the Minister of Foreign Affairs and her counterpart to support and implement
gradual increases in Australia's aid program for the next decade to reach the
0.5 per cent target.
Recommendation 3
6.12
The committee recommends the Australian Government maintain its
commitment to increase the funding by the Consumer Price Index in 2014-15.
Recommendation 4
6.13
The committee recommends that, in future years, the Australian
Government ensures that Australia's ODA/GNI ratio does not fall below 0.33.
Recommendation 5
6.14
The committee recommends the Minister for Foreign Affairs and the Shadow
Minister for Foreign Affairs develop a bipartisan agreement for the long term
funding of Australia's overseas aid and development assistance program to
achieve the ODA/GNI target of 0.5 per cent by 2024-25.
6.15
As a non-permanent member of the UN Security Council and host of G20
2014, Australia is in a good position to make its voice heard on the priorities
of the development agenda post-2015. The committee considers this is a key
opportunity where the alignment of Australia's diplomatic resources and
development priorities should be fully exploited. In particular, Australia, in
consultation with its development partners, should be highlighting issues
critical for developing countries in the Asia Pacific region in the post-2015
development agenda discussions.
Recommendation 6
6.16
The committee recommends that the Australian Government promote the
interests of developing countries in the Asia Pacific in the post-2015
development agenda discussions.
6.17
Given the Australian Government's stated intent to refocus the aid
program on 'reducing poverty in the Indo-Pacific region', in the view of the
committee, it was counterproductive for the revised aid budget for 2013-14 to
include substantial cuts to many of the smaller countries of the Pacific. The
committee urges the Australian Government to reverse these funding cuts in the
2014-15 aid budget and to renew its commitment to supporting development in the
Pacific.
6.18
It is also important for Australia to continue its development
engagement with Africa. In this context, the committee considers that Australia
should join the African Development Bank. Joining the African Development Bank
would represent value-for-money and be a high-level indication of Australia's
commitment to development in Africa.
Recommendation 7
6.19
The committee recommends that the Australian Government reverse funding
cuts made to Pacific nations in the 2014-15 budget.
Recommendation 8
6.20
The committee recommends that the Australian Government reintroduce and
support legislation to enable Australia to become a member of the African
Development Bank Group.
6.21
The modest amount of the funding invested by the Australian Government
in the Medical Research Strategy has delivered a high-level return through
product development partnerships. In the view of the committee, additional
funding should be made available to the Medical Research Strategy in the coming
years. Further, there should be a broader remit to conduct research and a
continued focus on product development partnerships. Better coordination across
key agencies should also be provided by establishing an interdepartmental
taskforce.
Recommendation 9
6.22
The committee recommends that the Australian Government renew the
Medical Research Strategy and expand funding for the program to
$50 million per annum.
Recommendation 10
6.23
The committee recommends that the Medical Research Strategy should:
- have a broader remit to include all research relevant to the
major health challenges in developing countries, including early and product
development and operational/field research; and
- continue to have priority focus on product development
partnerships.
Recommendation 11
6.24
The committee recommends that the Australian Government establish an
interdepartmental taskforce, chaired by the Department of Foreign Affairs and
Trade, to develop a global health research and development strategy.
6.25
The committee welcomes the Australian Government's continued focus on
gender inequality through the overseas aid program, in particular the
appointment of Ambassador for Women and Girls, Ms Natasha Stott Despoja.
However, the committee also recognises the concerns expressed during the
inquiry regarding the difficulties of tracking support for gender issues within
the aid program and considers this could be an area of reform.
Recommendation 12
6.26
The committee recommends that the Department of Foreign Affairs and
Trade investigate creating a mechanism to track gender issues across the
Australian aid program and budget.
6.27
The committee was disappointed that the funding cuts imposed in January
affected aid programs focused on mitigating the effects of climate change on
developing countries and for environmental protection. Given that countries in
the Asia Pacific are some of the most vulnerable to climate change, continuing
support to enable developing countries to tackle this issue is critical to
Australia's and the region's future.
Recommendation 13
6.28
The committee recommends that the Australian Government restore an
appropriate level of funding for climate change mitigation and environmental
protection programs within the aid budget.
6.29
Many submissions and witnesses singled out humanitarian aid as a
priority area where aid funding allocations should be protected. Given that the
Asia Pacific is a region prone to natural disasters, the committee also
considers this is a component of the aid program which should be appropriately
resourced.
Recommendation 14
6.30
The committee recommends that the Australian Government commit to
allocating 10 per cent of the aid budget for emergency and humanitarian
response.
6.31
The committee considers that the channels for the delivery of overseas
aid should be context specific. Australian aid should always be allocated to
the most effective mechanism for delivery rather than preferentially. However,
the committee wishes to address two issues to support the effective delivery of
Australia's aid program: innovation in aid delivery and procurement for the aid
program.
6.32
The committee considers that additional funding should be made available
to re-establish the 'AusAID NGO Cooperation Program Innovation Fund' to promote
innovative practices and to improve the effectiveness of aid delivery in the
NGO sector.
6.33
Further, the committee notes that the US Agency for International
Development and UK Department for International Development have established a
Global Development Innovation Ventures (GDIV) initiative. The committee
considers that this initiative to develop innovative solutions to 'intractable
development challenges' should also be supported by Australia. The committee
notes that Minister Bishop has recently undertaken to join GDIV.
6.34
The committee also was concerned to receive evidence during the inquiry
that the market for the procurement of technical services for the aid program
may be unbalanced or overly restricted. This matter should be independently
reviewed.
Recommendation 15
6.35
The committee recommends that the Australian Government re-establish the
AusAID NGO Cooperation Program Innovation Fund.
Recommendation 16
6.36
The committee recommends that the Australian Government join the Global
Development Innovation Venture.
Recommendation 17
6.37
The committee recommends that the Australian National Audit Office
consider the procurement of aid-related technical services by the Department of
Foreign Affairs and Trade.
6.38
There is a risk that DFAT, through the integration process, will lose the
key skills, procedures and specialist staff needed to effectively administer
Australia's aid program. The committee considers that an independent
audit/review of DFAT's capabilities should be undertaken following the
conclusion of the integration process to ensure the aid program continues to be
delivered effectively.
Recommendation 18
6.39
The committee recommends that the Australian National Audit Office undertake
a review of the Department of the Foreign Affairs and Trade to ensure it has
retained and maintained the key skills, processes and specialist staff necessary
to effectively administer Australia's aid program.
6.40
The committee considers that changing the name of the Department of
Foreign Affairs and Trade to reflect its additional responsibilities for
overseas aid and development assistance would assist in preserving the distinct
identity of the Australian aid program.
Recommendation 19
6.41
The committee recommends the Australian Government consider changing the
title of the Department of Foreign Affairs and Trade to reflect the importance
of its overseas aid and development assistance responsibilities.
6.42
The committee considers that, as far as possible, information about
Australia's aid program should be made publicly accessible in a timely manner.
In this context, the committee considers that DFAT should recommit to the
Transparency Charter and continue to work to increase the volume of information
publicly available regarding Australia's aid program.
Recommendation 20
6.43
The committee recommends that the Department of Foreign Affairs and
Trade recommit to the Transparency Charter and continue to increase the amount
of publicly available information regarding Australia's aid program.
6.44
Appropriate performance benchmarks have the potential to improve the
effectiveness of Australia's overseas aid. However, it is vital that any
benchmarks for aid are applied consistently across all government agencies
which provide overseas aid and are consistent with OECD DAC guidelines for ODA.
The committee urges the Australian Government to continue its close
consultation with the aid sector in the development of the proposed benchmarks.
Recommendation 21
6.45
The committee recommends that the Australian Government develop aid
benchmarks which can be applied consistently to all agencies which provide
official development assistance.
Recommendation 22
6.46
The committee recommends the Australian Government continue to consult
closely with aid sector stakeholders in the development and implementation of
aid benchmarks.
6.47
A reduction of around $650 million in the revised budget update from aid
funding in the 2013-14 budget will clearly have a significant impact on aid
outcomes in developing countries. The committee was concerned by the lack of
detail from DFAT regarding the rationale for the funding cuts and any
assessment of the impact of the cuts in developing countries. In the view of
the committee, DFAT should expedite its discussions with developing countries
and other partners regarding how these funding cuts will be implemented to
provide all stakeholders with certainty.
6.48
The importance of predictable and reliable aid funding for the effective
delivery of overseas aid was repeatedly and consistently raised during the
inquiry. In this context, the committee is concerned that the uncertainty
created by mid-year cuts to aid funding will have broader implications for
international development outcomes beyond the immediate impact on the programs
affected. In the view of the committee, the Australian Government should seek
to minimise the uncertainty imposed on other development partners in aid
funding reprioritisations.
Recommendation 23
6.49
The committee recommends the Department of Foreign Affairs and Trade
expedite the provision of detailed information to stakeholders regarding which
programs and areas will be impacted by the aid budget funding changes announced
on 18 January 2014.
Recommendation 24
6.50
The committee recommends that the Australian Government should refrain
from mid-year changes to aid funding allocations in the future unless they
increase available funding.
Senator the
Hon Ursula Stephens
Chair
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