Foreign affairs overview

Budget Review 2014–15 Index

Dr Geoffrey Wade

The appropriation of $1,404.8 million for the Department of Foreign Affairs and Trade (DFAT) in the 2014–15 financial year requires the Department to find approximately $110 million in savings in 2014–15 and some $400 million over four years. This will mean a considerable reduction in staff numbers, with some 500 positions (12 per cent of the total 4,215) slated for removal.[1]

The integration of the aid agency AusAID into DFAT will provide some of the required savings and many of the positions that are to be abolished.[2] As Figure 1 shows, expenditure on DFAT as a proportion of total government expenditure is estimated to grow slightly to mid-2015 but then continue its decline. The Lowy Institute has underlined the continuing problem of the ‘diplomatic deficit’ resulting from this decline.[3] This Budget is surprising, particularly given the Coalition’s promised ‘long-term policy to ensure Australia’s global diplomatic network is consistent with our interests’.[4]

Figure 1: DFAT expenditure as a proportion of total government expenditure

Figure 1: DFAT expenditure as a proportion of total government expenditure 

There has been a re-adjustment in how the Government describes Australia’s regional positioning, through multiple references to Australia’s relations with the ‘Indian Ocean Asia Pacific’.[5] This new broader terminology for the region in which Australia is located is particularly used to situate the ‘New Colombo Plan’, a new $100 million initiative to fund Australian undergraduate students to travel to and study in the region.[6]

In the public diplomacy sphere, tourism has been elevated to a Cabinet-level undertaking, alongside foreign affairs and trade, with an entire Budget media release from the Minister for Trade and Investment being devoted to the topic.[7] Tourism Australia has retained its budget of $130 million, intended as ‘support for the tourism industry across the key areas of infrastructure development and overseas brand promotion in growing markets such as China’.[8] 

The concentrated emphasis on China, Australia’s biggest tourism market, is worth noting. There is a lot of attention being directed to attracting Chinese visitors, with $10.1 million in new funding for the Australia-China Approved Destination Status (ADS) scheme and $2.0 million for the 2016 Australia Week in China.[9] This is in addition to previously announced policies, including three-year visas for Chinese business visitors and special additional arrangements for Chinese New Year flights.[10]

Yet, despite its stated aims of promoting diplomacy and increasing overseas brand promotion, funding for Australia’s overseas television broadcasting service—the $223.0 million Australia Network run by the Australian Broadcasting Corporation (ABC)—was withdrawn. Citing a ‘fundamentally flawed tender process under the previous Labor Government’, the Minister stated that ‘the Australia Network has failed to deliver a cost-effective vehicle for advancing Australia's broad and enduring interests in the Indo-Pacific region’.[11] The ABC, however, claims that all DFAT-stipulated targets have been met in their broadcasts to 167 million households in 46 countries, and that audiences were increasing.[12]

This action appears incongruous with similar strategies undertaken by many nations around the world which operate a state-sponsored international television presence as part of their public diplomacy and soft-power arsenal, several of which are increasing their broadcasts to the Asian region.  Countries which publicly fund such broadcasting services include Argentina, Britain, Canada, Chile, China, France, Germany, India, Japan, Korea, Singapore, Spain, Thailand and the US. As such, it is unlikely that Australia will continue without such a service, and possible that the withdrawal of the Australia Network funding is intended simply to open the way for commercial operators to fill the gap, particularly given the Government’s complaint with the original tender process.[13]

Embassy operations worthy of mention include $51.0 million in 2014–15 to maintain the Australian Embassy in Kabul, and $35.0 million to close the embassy in Baghdad and co-locate it with the British Embassy as a long-term savings measure.[14] The $79.0 million previously set aside for the planned relocation of the Tehran embassy has been re-allocated as this move will now not proceed.[15]

[1].      ‘More than 2,500 jobs axed at ATO, Foreign Affairs Department, ABC News online, 14 May 2014, accessed 15 May 2014.

[2].     For more details on the changes to aid, see the Parliamentary Library Budget Review article Official Development Assistance—the future of Australian aid).

[3].      A Oliver, ‘First look at the Budget: DFAT, aid and defence, The Interpreter, Lowy Institute for International Policy weblog, 13 May 2014, accessed 16 May 2014.

[4].      Liberal Party of Australia, The Coalition’s policy for foreign affairs September 2013, p. 7, accessed 15 May 2014.

[5].      Australian Government, Portfolio budget statements 2014–15: budget related paper no. 1.9: Foreign Affairs and Trade Portfolio, 2014, pp. 3,5, 15,39, accessed 16 May 2014. The Lowy Institute has previously commented on this terminology—see D Rajendram, Indo-Pacific word games, The Interpreter, Lowy Institute for International Policy weblog, 9 August 2013, accessed 16 May 2014.

[6].      Portfolio budget statements 2014–15: budget related paper no. 1.9, op. cit., p. 39.

[7].      A Robb (Minister for Trade and Investment), Budget affirms government support for tourism, media release, 13 May 2014, accessed 15 May 2014.

[8].      Ibid.

[9].      Australian Government, Budget measures: budget paper no. 2: 2014–15, 2014, p. 13, accessed 16 May 2014; The Approved Destination Status scheme (ADS) is a bilateral tourism arrangement between the Chinese Government and a destination whereby Chinese tourists are permitted to undertake leisure travel in groups to that destination. The Australia-China ADS scheme allows Australia to host group leisure tour groups from China and permits the Australian Government, through Tourism Australia, to promote Australia as a leisure travel destination in China.

[10].    A Robb (Minister for Trade and Investment),  Chinese business visitors set to benefit from multiple entry visas, media release, 7 February 2014, accessed 16 May 2014.

[11].    J Bishop (Minister for Foreign Affairs), 2014–15 Foreign Affairs and Trade portfolio budget, media release, 13 May 2014, accessed 16 May 2014.

[12].    ‘ABC managing director Mark Scott “very disappointed” about Australia Network cut, Australia Network News online, 14 May 2014, accessed 16 May 2014; ‘ABC boss Lynley Marshall defends overseas broadcasting’, Sydney Morning Herald, 17 February 2014, accessed 16 May 2014.

[13].     R Tiffen, ‘A hard landing for the ABC’s version of soft diplomacy, Inside Story, 16 May 2014, accessed 16 May 2014.

[14].    2014–15 Foreign Affairs and Trade portfolio budget, op. cit.

[15].    Portfolio budget statements 2014–15: budget related paper no. 1.9, op. cit., p. 26.


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