Budget Review 2021–22 Index
Angela Clare
Australia’s aid spend will total an estimated $4.335
billion in 2021–22, a decrease of $144 million on the 2020–21
aid budget estimate of $4.480 billion. This represents a
cut of 4.9% after inflation.
Similar to the format used in the Government’s October
2020 aid budget, the 2021–22 figure is made up of two parts: a $4 billion core
budget, reported as ‘total ODA’ (Official Development Assistance), and a
further $335.3 million in temporary support for COVID-19. The two figures—both ODA—are presented separately in the aid budget
summary, allowing the Government to maintain its freeze on ‘base’ aid funding (2018-19
Budget paper no. 2, p.103) while providing additional support for
COVID-19 in the region.
Forward estimates show a further decline in 2022–23 to
$4.118 billion, and for aid spending to return to indexation
based on inflation (p. 57) thereafter.
Last year saw the first
increase in aid spending since the Coalition came to power in 2013, with an
extra $480 million provided for COVID-19 recovery efforts in the Pacific and
Southeast Asia. The additional funds were announced in the 2020–21
Budget and a series
of later announcements, with a further upwards revision made on budget
night. Last minute adjustments to the 2020–21 Budget were the result of ‘front-loading’ expenditure on vaccines and
other COVID-19-related support, reducing 2021–22 expenditure estimates.
The 2021–22 Budget has disappointed
aid groups, hopeful for a stronger response from the Government in the
context of the global COVID-19 crisis and Australia’s relatively healthy
economic performance. The Australian Global Health Alliance—Australia’s peak
body for global health organisations—and Pacific Friends of Global Health expressed
their alarm at the Government’s decision to decrease the foreign aid budget
‘during the worst global health and economic crisis in a century’.
The decrease to the aid budget comes as new data from the
OECD shows that donors have stepped up their response to the pandemic with
global foreign aid rising to an
all-time high in 2020—a 3.5% increase in real terms on 2019. Australian
National University (ANU) academic, Stephen Howes, has noted that Australia
stands out for recording
one of the largest drops in ODA among DAC donors
in 2020. While this may be partially explained by delays to aid spending over
the 2020 calendar year, the data confirms a longer term trend that has seen Australian
aid fall by 31% between 2011 and 2020, while globally aid has increased by
26%.
The Government denies
it is cutting the aid program in 2021–22, arguing that it has maintained
the ‘standard’ aid budget of $4 billion and committed ‘around a billion
dollars’ in ‘temporary and targeted measures’ to respond to COVID-19 in the region.
ODA to GNI ratio
Australia’s ODA as a proportion of Gross National Income
(GNI)—the official measure of development
assistance—is estimated to drop from 0.22% in 2020–21 to 0.21% in 2021–22 (see
Figure 1), placing Australia well below the OECD DAC country
average of 0.32%.
Figure 1: Australia’s ODA to GNI ratio, 1984–85 to 2024–25 (estimated)

Source: Australian Aid Tracker
The aid budget’s proportion of
Government spending also continues to decline, representing 0.74% of the
Government’s budget in 2021–22, down from 1.56% in 1984–85. Stephen Howes shows
that the Government spent ten
times more on defence than it did on foreign aid in 2020–21, compared to a
five-to-one ratio in 2013–14.
Looking forward, as Table 1 below shows, ANU
Development Policy Centre analysis of DFAT’s forward estimates suggests
that the aid budget will fall by a total of 12% from the current year out to
2024–25.
Table 1: estimated change to the
aid budget, 2019–20 to 2024–25
|
2019–20(a)
|
2020–21
|
2021–22
|
2022–23
|
2023–24
|
2024–25
|
Expenditure
($ million)
|
4,070
|
4,480
|
4,335
|
4,189
|
4,282
|
4,308
|
% change on previous year
|
--
|
6.3%
|
-4.9%
|
-5.5%
|
-0.3%
|
-1.9%
|
(a)
Actual expenditure
reported in Australian Official Development
Assistance: Statistical Summary, 2019–20
Source: ANU Devpolicy aid budget breakfast
presentation, 12 May 2021
Geographic and sector focus
Australia’s allocation of aid across countries and global
and regional programs in 2021–22 remains largely stable, with a continued focus
on the Pacific ($1.4 billion, or around 40% of the aid program). Of the more
significant changes, aid to Bangladesh is up by 140% (from $56 million to $134
million)—which
includes funding to support the Rohingya population—and South and West Asia
Regional programs have increased from $18.6 million to $30 million, or 63%.
Table 2 shows Australian aid flows by region since 2019–20,
while Figure 2 shows trends in regional allocations since 2011–12. Allocations
are derived from the budget papers, and do not include additional COVID-19
support.
Table 2: total Australian ODA ($ million), 2019–20 to 2021–22,
by region
Region
|
2019–20(a)
(actual)
|
2020–21(b)
(estimate)
|
2021–22(b)
(estimate)
|
PNG & the Pacific
|
1,298.5
|
1,440.6
|
1,441.8
|
PNG
|
618.9
|
596.0
|
587.8
|
Other
Pacific countries
|
679.6
|
844.6
|
854.0
|
Global & other ODA (c)
|
1,310.6
|
1,260.6
|
1,180.9
|
Southeast & East Asia
|
861.3
|
1,009.9
|
1,012.0
|
South & West Asia
|
312.6
|
193.4
|
273.1
|
Middle East & Africa
|
283.5
|
93.0
|
90.7
|
Latin America & the Caribbean
|
3.6
|
2.5
|
1.6
|
Total ODA
|
4,070
|
4,000
|
4,000
|
Sources:
(a) Department of Foreign Affairs and Trade, Australia’s Official Development Assistance:
Statistical Summary 2019–20
(b) Department of Foreign Affairs and
Trade, Australian Aid Budget Summary, table 4, 2021–22
(c) Includes regional and global programs
that cannot be disaggregated to a lower geographical level
Figure 2: Australian bilateral aid flows by region, 2011–12
to 2021–22 (constant 2021–22 $A)

Source: ANU, Australian Aid Tracker:
Destinations
The additional $335 million in
COVID-19 support in 2021–22 is allocated
as follows:
- $162.6 million for vaccines in the Pacific and Southeast Asia
- $100 million to address the impacts of COVID-19 in the Pacific
and Timor-Leste ($200 million in
2020–21)
- $56 million to support economic recovery in Southeast Asia and
-
$16.7 million for emergency medical supplies to India ($20
million in 2020–21).
Gender equality remains a focus for the aid program,
spearheaded by the new Pacific
Women Lead program ($170 million, 2021–26). There is a small increase to
global health funds, but aid groups are disappointed that the 25% cut to
disability-inclusive development last year has not been restored. The Australian
Council for International Development (ACFID) notes that there is no allocation
for famine prevention, ‘despite
high levels of food insecurity in the Middle East and Africa’.
Climate financing through private sector partnerships has
received an additional $20 million in 2021–22, while funding for NGOs and
volunteers remains steady.
At $485 million, humanitarian funding has not yet reached
the Government’s pledge made in the 2017
Foreign Policy White Paper to spend $500 million annually in the
sector.
ANU
analysis suggests that while previous cuts to the health sector have now
been restored, education and resilience (including disaster resistance and social
protection) are the sectors which have borne the brunt of aid cuts in recent
years.
COVID-19 and the aid program
In June 2020 the Department of Foreign Affairs and Trade
(DFAT) released its ‘Partnerships
for Recovery’ strategy (2020–2022) in response to the COVID-19 pandemic.
The strategy refocused the aid program on responding to the immediate impacts
of the pandemic in the Pacific and Southeast Asia, with particular focus on
health security, stability and economic recovery.
DFAT estimates that 533
million people globally could be pushed back into poverty as a result of
COVID-19, ‘with women and people with disabilities disproportionately losing
work opportunities’:
The pandemic is exacerbating impacts from underlying
vulnerabilities, including natural disasters, malnutrition, health
comorbidities, gender-based violence, and lack of water and sanitation
facilities.
The 2021 Budget included a commitment
of $100
million for vaccines under the Quad grouping,
supplementing the $532 million pledged for vaccine
access in the region through to 2023. The Government also pledged to
provide ‘Australian
manufactured doses’ of COVID-19 vaccines to the Pacific and Timor-Leste, but
no further information on the amount of this support has been provided.
Australia has provided $80 million to the COVAX facility to ensure
developing countries gain access to COVID-19 vaccines. Overall, Australia has provided
0.57%
of global COVID-19 funding for the World Health Organization’s initiative
to deliver COVID-19 testing, treatment and vaccines around the world.
So far Australia’s direct vaccine support to the region includes
20,000 Australian-manufactured vaccines to Timor
Leste, 8,480
vaccine doses to Papua New Guinea and 10,000
vaccines to Fiji.
Commentary
Recent Lowy
Institute polling suggests that while Australians have typically not been
supportive of foreign aid, this view does not apply to COVID-19:
… eight in ten Australians (83%) say that Australia should
help Pacific island countries pay for Covid-19 vaccines. This is striking in
comparison to 2019, when less than half the population said that Australia
should spend more in the Pacific. And six in ten (60%) say Australia should be
helping Southeast Asian countries pay for vaccines.
In its pre-budget
submission ACFID called on the Government to make its additional COVID-19
support permanent, develop a long-term aid budget strategy, and increase aid
investments over future years to support the region’s COVID-19 recovery.
A number of foreign policy analysts have argued that the
Government should increase its investment in foreign aid. Richard Maude, who
headed the development of the 2017 foreign policy white paper as a senior DFAT
official, has
argued that repeated cuts to the aid
program since 2013 have spread it very thin, and that the $4 billion Australia
spends on foreign aid annually is not enough to achieve the nation’s goals in
the region. Allan Gyngell, former head of the Office of National Assessments
(now the Office of National Intelligence), has
argued that the Government:
… did not value diplomacy and soft power to the same extent
as defence and intelligence agencies. ‘‘It stems from the way we think about
statecraft,’’ he said. ‘‘We accept the need to spend money on the instruments
of defence and deterrence but we think that spending money on instruments of
persuasion – whether that is aid, diplomacy or soft power – that’s somehow less
real in terms of the effect that it has.’’
The Shadow Minister for Foreign Affairs, Penny Wong, and the
Shadow Minister for International Development and the Pacific, Pat Conroy, have
called on the Government to reverse
its cuts to Australia’s aid budget, claiming that aid cuts ‘have diminished
Australia’s standing in Indo-Pacific and have undermined our interests in a
stable, secure and prosperous region’. Targets for the proposed increase were
not provided.
For Stephen
Howes, the recent OECD data on donor
rankings ‘delivers a particularly harsh verdict on Australia’s aid effort, and
on the extent and exceptional nature of our aid cuts over the last decade’. As
one of the richest countries in the world, Howes contends, ‘we should be an aid
leader, not an aid laggard’.
Howes grants that the Government
may increase aid again through the year via specific announcements, as it did
in 2020, but suggests that ‘Australia will come under pressure, both from the G7 and
regionally, to do more’.
This brief was
revised on 7 June 2021 to correct a minor error in Table 2.