Dr Geoff Wade and Dr Cameron Hill
The pronounced domestic focus of the 2016–17 Budget was
reflected in a relatively unchanged profile for the Department of Foreign
Affairs and Trade (DFAT). The departmental appropriation of $1.4 billion
represents a slight increase (2 per cent) relative to the 2015–16 estimate. Staff
levels are slated to rise from 5,700 to 5,760 (an increase of 1 per cent).
DFAT’s strategic direction statement offers little in the
way of change. As in 2015–16, the ‘Indo-Pacific’ region remains the core focus
of Australia’s diplomacy.According to DFAT, the continued engagement of the United States (US)—Australia’s
principal ally—‘provides major security and economic benefits to the region’.
Links with Japan, China and the Republic of Korea (in that order) are to be
further strengthened. Indonesia, India and Singapore form the next tier of
relations, followed by the Pacific states and ASEAN. Relations with the
countries of Europe and the Middle East are noted only after attention is given
to regional engagements such as the East Asia Summit, New Colombo Plan, the
Indian Ocean Rim Association and the ‘MIKTA’ grouping.
Emphasis continues to be placed on ‘economic diplomacy’, including
the Trans-Pacific Partnership and the three bilateral Free Trade Agreements (China,
Japan and Korea) which recently came into force. The pursuit of another major trade
agreement, the Regional Comprehensive Economic Partnership—which includes nine out
of Australia’s top 12 trade partners—continues.
The prominence assigned to gender equality and women’s
empowerment within DFAT’s strategic statement, and its Women in Leadership
strategy, reflect recent innovations within the department.
Australia’s diplomatic footprint is being expanded slightly.
An Austrade office in Tehran will be re-opened to take advantage of the changes
in Iran’s external economic relations.An enhanced diplomatic presence in China is also slated as part of the
economic diplomacy agenda.
Given that Australian consulates already exist in Shanghai, Chengdu and
Guangzhou, the new consulate could well be in Wuhan or Shenyang, major economic
centres where the US already has consulates.
The opening of a consulate in Lae in PNG is being resourced by redirecting
funding originally intended for a consulate at Buka, in Bougainville. The 2015 spat
over the proposed Bougainville consulate appears resolved.
The trade and tourism side of DFAT is pursuing new bilateral
trade agreements with India and Indonesia, aiming to triple air service gateway
capacity between Australia and China by the end of 2016, and to improve local
tourism facilities. It has also installed investment attraction specialists in
‘Landing pads’ for Australian tech start-ups in overseas markets have been
funded in Berlin and Singapore, in tandem with similar efforts in San
Francisco, Tel Aviv and Shanghai.
On the consular front, DFAT will ‘remove consular assistance
for dual nationals and permanent residents in the countries of which they are
With the implementation of a scheduled $224 million cut
(around 7.5 per cent in real terms), Australia’s $3.8 billion Official
Development Assistance (ODA) budget for 2016–17 is a record breaker on several
fronts. According to the Australian
National University’s (ANU) Development Policy Centre, never before has the aid
budget been cut four times in a row. The cumulative 30 per
cent reduction in aid over this period is another record.
Australia’s aid generosity, measured in terms of ODA as a proportion of Gross National
Income (GNI), will also hit a new low of 0.23 per cent, ‘well below the global
average—a touch over 0.3 per cent—something we used to try to at least match’.
Despite rising global ODA, Australia’s development assistance is projected to
fall to 0.21 per cent of GNI by 2019–20.
Aid and community groups had urged the government not to
proceed with the scheduled cut. Despite these calls, the
geographic allocations contained in a new budget summary document, known as the
‘orange book’, reinforce those set in 2015–16, when almost $1 billion was cut
from annual aid. In terms of specific allocations:
total estimated ODA to PNG and the Pacific increases
slightly, rising from $1.119 billion in 2015–16 to $1.138 billion in 2016–17
total estimated ODA to South East and East Asia (down
from $909.5 million to $887.7 million), South and West Asia ($310.4 million
to $282.8 million), Africa and the Middle East ($185.8 million to $184.9
million) and Latin America and the Caribbean ($13.4 million to $11.0 million)
has largely stabilised in the wake of very large cuts in 2015–16.
With these changes now embedded and little apparent scope
for growth in country programs (see below), Australia’s ability to leverage aid
to influence development debates and outcomes is likely to be limited to its immediate
neighbours for the foreseeable future. Any ambition to influence the agenda
across the wider ‘Indo-Pacific’ will be heavily constrained by Australia’s
diminished aid footprint.
Perhaps unsurprisingly, it is also clear that considerations
of national interest and proximity, rather than performance, continue to dominate
the geographic allocations. In the 2014–15 ‘Performance
of Australian Aid’ report, the PNG and Pacific region was identified as the
worst performing in terms of the proportion of program objectives (43 per cent)
designated as ‘at risk’. In PNG, six out of eight
country program objectives were designated ‘at risk’ and less than half of the
program’s performance benchmarks were fully achieved.
Global programs have borne the brunt of this year’s cuts, decreasing
from $334 million to an estimated $199 million as a result of delayed payments
to some international organisations. The need to honour these commitments in
future years is likely to limit any future growth in country programs.
Other pending decisions, such as whether future contributions to the China-led
Asian Infrastructure Investment Bank will come from the existing ODA budget,
may also constrain future country program options.
No out-year cuts were announced in the 2016–17 Budget and
aid will increase in line with inflation over the forward estimates.
This returns some predictability after unprecedented funding reductions. Nevertheless,
the Opposition has accused the Government of having ‘trashed Australia’s
reputation as a good global citizen’. It has pledged increases
in humanitarian and non-government programs, as well as legislation to improve
transparency and accountability, should it be elected in 2016.
Labor has not re-committed to the 0.5 per cent ODA/GNI target adopted by the
Rudd and Gillard governments. The World
Vision Chief Executive, Tim Costello, stated ‘this latest round of cuts puts
lives and futures at risk as well as regional and global security and
prosperity; it’s both unwise and unworthy of our nation’.
. Australian Government, Portfolio budget statements 2016–17: budget related paper no. 1.9:
Foreign Affairs and Trade Portfolio, 2016, pp. 20–1.
affairs overview’, Budget review 2015–16,
Research paper series, 2014–15, Parliamentary Library, Canberra, 2015.
Australian Government, Portfolio budget statements 2016–17: budget
related paper no. 1.9: Foreign Affairs and Trade Portfolio, op. cit., p. 13
Indonesia, Republic of Korea, Turkey and Australia.
of Foreign Affairs and Trade (DFAT), ‘Regional
Comprehensive Economic Partnership’, DFAT website.
launches women in leadership strategy, media release, 23 November 2015;
equality and women’s empowerment strategy, 29 February 2016.
measures: budget paper no. 2: 2016–17, 2016, p. 97.
Bishop (Minister for Foreign Affairs), 2016
Foreign Affairs budget, media
release, 3 May 2016.
Department of State, China:
US consulates, Department of State website.
Government, Budget measures: budget paper no. 2: 2016–17, op. cit.
for example, K Aubusson, ‘PNG
imposes ban on Australians travelling to Bougainville’, Sydney Morning Herald, 18 May 2015.
Ciobo (Minister for Trade and Investment), Free
Trade Agreements and tourism to drive economic growth and jobs, media
release, 3 May 2016.
. S Ciobo
(Minister for Trade and Investment) and C Pyne (Minister for Industry,
Innovation and Science), Innovators
to land in Berlin, joint media release, 27 April 2016.
Australian Government, Budget measures: budget paper no. 2: 2016–17,
2016, op. cit., p. 98.
aid budget summary, 2016–17, 2016, p. v.; M Dornan, ‘ Continuity
with change: country allocations in the 2016-17 budget’, DevPolicy,
blog, Development Policy Centre, ANU, 4 May 2016.
S Howes, ‘Scaled
down. The last of the aid cuts?’, DevPolicy,
blog, Development Policy Centre, ANU, 4 May 2016.
Davies and A Betteridge, ‘The
rise of global aid in 2015, and the fall of Australia’, DevPolicy, blog,
Development Policy Centre, ANU, 15 April 2016; Development Policy Centre, Australian aid tracker,
Council for International Development (ACFID), ACFID
submission to the 2016-17 federal Budget, February 2016.
Australian aid budget summary, op. cit., pp. 7–8.
Government has stated previously that ‘performance will be a key criteria [sic]
used to determine future budget allocations’. See: DFAT, Making
performance count: enhancing the accountability and effectiveness of Australian
aid, June 2014, p. 16.
of Australian aid 2014–15, February 2016, p. 24.
Howes, op. cit.
pressure: calls on Australia’s 2016 aid budget’, DevPolicy, blog,
Development Policy Centre, ANU, 3 March 2016.
Government, Portfolio budget statements 2016–17: budget related paper no.
1.9: Foreign Affairs and Trade Portfolio, op. cit., p.
Plibersek (Shadow Minister for Foreign Affairs and International Development) and
M Thistlethwaite (Shadow Parliamentary Secretary for Foreign Affairs and
budget: cuts aid, consular help—passport fees up, joint media release,
4 May 2016.
World Vision, Tim
Costello calls for an end to aid cuts madness, media release, 3 May
All online articles accessed May 2016.
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