Budget Review 2022–23 Index
Dr Angela Clare
Australia’s foreign aid program in 2022–23 amounts to an
billion, an increase of $241 million on the 2021–22 estimate of $4.335
billion (inclusive of temporary measures).
In line with the Government’s recent aid budgets, the
2022–23 aid figure has 2 components: $4.089 billion in ‘baseline’ Official
Development Assistance (ODA) and $460 million in ‘temporary,
targeted and supplementary’ measures—also ODA, and largely aimed at supporting
the region’s COVID-19 response and recovery efforts. The temporary measures build
on the Government’s 2020 commitment of an additional
$1 billion for the region’s COVID-19 response, and include:
- $281 million towards the economic and social costs of COVID-19 in
the Pacific and Timor-Leste (part of a new 2-year $324.4 million package of
- $98.3 million for vaccines in the Pacific and Southeast Asia
- $61.5 million support for economic recovery in Southeast Asia.
This year sees the base aid budget return to partial
indexation (2.5%) for the first time in 4 years, after the Government froze
funding at $4 billion in 2018.
As Table 1 shows, with funding for the aid base remaining flat
in future years, the extension of temporary measures is expected to push out a drop
in forward estimates by one year, according to the Australian National University’s
(ANU) Australian Aid Tracker:
Table 1 Forward estimates, current
prices and inflation adjusted (2022–23 prices)
|Expenditure ($ million)
Source: ANU Development Policy Centre, Australian Aid Tracker, Australian Aid over Time
Aid groups have welcomed the Government’s continuation of support
for COVID-19 recovery in the region, particularly as the impact of the pandemic
increases in countries such as the Solomon Islands, Kiribati and Tonga. Vaccination
low in some Pacific Island countries, including Vanuatu (where 31% of
people have had at least one dose), the Solomon Islands (33%) and Papua New
The Australian Council for International Development (ACFID)
is one of a number of aid groups to call for the temporary
increases to the aid budget to be made permanent,
arguing that the problems they are targeting are ‘anything but temporary’. It also
argues that the distinction between temporary measures and
‘base’ assistance is ‘confusing our long-term intentions and
relationships in the region’ and that this ‘outdated
framing’ should be dropped.
Australia’s ODA as a proportion of Gross National Income
(GNI)—the official measure of development
assistance—is expected to remain at the 2021–22 level of 0.20%. This
continues to place Australia well below the OECD Development Assistance
Committee (DAC) country
average of 0.32%. In 2020 Australia ranked 21 out
of 29 OECD DAC countries on the generosity of its aid, measured by the
ODA-to-GNI ratio. On current estimates Australia’s ODA-to-GNI ratio is expected
to tail off to 0.17% by 2025–26 (see Figure 1).
Figure 1 Australia’s ODA-to-GNI
ratio, 1991–92 to 2025–26 (estimated)
Source: ANU Development Policy Centre, Australian Aid Tracker, Generosity: Australian Aid as a Percentage
In the last 10 years the aid
program has seen significant cuts, as Figure 2 shows.
Figure 2 The aid trajectory
since 2012–13, ODA ($m) 2022 prices
Source: ANU Development Policy
Centre, 2022 aid budget breakfast presentation
Aid as a proportion of Government
spending is 0.72% in 2022–23,
down from 1.32% in 2012–13. ANU analysis suggests that aid
spending is now around $1 to every $12 spent on defence, compared to a
ratio of around $1 to $6 in previous decades.
ACFID has called
for legislated, stepped targets to ensure Australia achieves a 0.7% ODA-to-GNI
ratio by 2029–30, the United
Nations target for donor countries. The United Kingdom
legislated an annual aid budget of 0.7% of GNI in 2015, but dropped this to
0.5% in 2021 as a temporary measure, citing the economic impact of COVID-19.
Geographic and sector focus
The small increase to baseline ODA and $460 million in
temporary measures has meant increased allocations across several geographic
areas in 2022–23, with the largest going to Southeast Asia and the Pacific. The
Pacific will receive a record high of $1.85 billion—$1.501 billion in ‘base’
aid and $346 million in temporary measures—or around 40% of the aid program. Aid
experts expect that much of this additional funding will
take the form of direct budget support to Pacific Island governments to
support their COVID-19 response efforts. Southeast Asia is set to receive $114
million in temporary measures in 2022–23.
Table 2 shows Australian aid flows by region since 2019–20. Allocations
are sourced from the Budget papers, and do not include additional COVID-19
Table 2 Total Australian ODA ($ million), 2019–20
to 2022–23, by region*
|PNG & the Pacific(c)
|Global & other ODA**
|Southeast, East and other
|South & West Asia
|Middle East & Africa
|Latin America & the Caribbean
* Excludes additional COVID-19 support.
** Includes regional and global programs
that cannot be disaggregated to a lower geographical level.
(a) Department of Foreign Affairs and Trade (DFAT), Australia’s Official Development Assistance:
Statistical Summary 2020–21
(b) DFAT, Australian Aid Budget Summary 2022–23
(c) Of these totals, allocations for PNG are: 2019–20, $618.9 million
(actual); 2020–21, $611.8 million (actual); 2021–22, $587.8 million (estimate);
2022–23, $596.2 million (estimate).
Gender and disability inclusion
Gender equality continues to be a focus for the aid program,
with an estimated
$1.5 billion to advance this objective in
2022–23, of which $500 million will be spent in the Pacific. Aid
groups have welcomed the ‘Women Together’ initiative, which provides $300 million
over 5 years to support women’s economic empowerment and leadership in regional
peace and stability, and to support responses to gender-based violence in
ACFID points out that funding
for disability inclusion in the aid program has not been increased after a
series of cuts which saw disability spending through country and regional
programs decrease from $125.8 million in 2013–14 to $97.7 million in 2020–21.
At last year’s COP26
summit Prime Minister Morrison pledged
an additional $500 million to the $1.5 billion the Government promised
for climate change funding in 2020, bringing the Government’s climate finance commitment
to $2 billion between 2020 and 2025. Aid groups note that how
this funding will be calculated and spent remains unclear, while the ANU’s Development
Policy Centre’s Terrence Wood argues that given current budget trajectories,
program will struggle to meet this commitment.
shows that developed countries are falling
well short of their commitments to help developing countries adapt to the
effects of climate change, and that adaptation costs are 5 to 10 times higher
than current international finance flows. Some aid observers also point out that most climate finance for developing countries is
not new money, despite the UN Framework
Convention on Climate Change (adopted in 1992) principle that ‘all climate
financing should be “new and additional” to other financial flows to address the
additional costs of climate change’. Analysis
from CARE shows that across 23 donor countries examined in 2018, only 6% of
climate finance was additional to aid targets.
At $470 million, the 2022–23 estimate for humanitarian
funding falls short of the $500 million annual spend pledged in the 2017
Foreign policy white paper. However, DFAT reporting on actual
expenditure shows that the Government achieved
this target in both 2020–21 ($541 million) and 2019–20 ($520 million).
Some $66 million has been allocated to Afghanistan—an
increase of 30% on last year—with a refocus on humanitarian needs. At the United
Nations Pledging Event on Humanitarian Assistance to Afghanistan on 1 April, Australia
committed an additional $40 million in humanitarian funding over 2021–24.
In South and Southeast Asia, Bangladesh received a 10%
increase, taking total funding to $147.7 million, with COVID-19 and the
Rohingya refugee crisis among the priorities for Australian support. Funding
for Myanmar has increased slightly to $98.6 million, with Australia’s focus
again pivoting to humanitarian support to address the impacts of political
instability, conflict and COVID-19 in the country.
In March 2022 the Government committed an additional
$50 million in humanitarian funding to the Ukraine crisis (to be sourced
from the 2021–22 ODA allocation), bringing Australia’s total humanitarian
support to Ukraine to $65 million.
NGOs have been critical of the Government’s failure to
support the crisis in
Yemen, where civil war has raged for over 7 years. Save
the Children argues that Australia’s failure to support the aid effort in
the country ‘was particularly concerning when the Government continue [sic] to
allow Australian-made, taxpayer-subsidised weapons to be exported to key
combatants in the war’.
COVID-19 and health security
Australia has so far provided over 25 million
doses of COVID-19 vaccine to countries in Southeast Asia and the Pacific, as
part of its pledge to provide 60 million doses to the region by the end of 2022.
The Government will provide a further $85 million for the COVAX
Advance Market Commitment to tackle new COVID-19 variants and help lift
global vaccination rates (of this, $77
million is additional ODA in 2021–22). This contribution brings Australia’s
total commitment to COVAX to $215 million. Australia has also committed $100
million over 5 years to the Coalition for Epidemic Preparedness Innovations
(CEPI) to help address current and future pandemics.
Prior to the Budget Australia had contributed
just 0.8% of a total of $18.1 billion for the global COVID-19 response,
according to World Health Organization data.
gap between rich and poor countries remains significant: only 15% of people
in low income countries have so far received one dose of COVID-19 vaccine,
compared to 80% in high and upper-middle income countries.
The Government has doubled
the lending cap on non-concessional loans through the Australian
Infrastructure Financing Facility for the Pacific from $1.5 billion to $3
billion. The ODA-eligible grant component of the facility remains unchanged at
Sector funding since 2013–14
Cuts to the aid budget between 2013–14 and 2020–21 have been
felt most severely in the education sector, which has seen a drop of $621
million (2022 prices), according to ANU
Budget analysis. Governance and resilience have also suffered significant
cuts ($458 million), while health is the only sector to have seen increased
funding over this period, with an additional $231 million.
The Opposition has pledged to increase
aid as a percentage of GNI every year that it is in office, ‘starting with
our first budget’. However, it has not yet released expenditure targets. The
Opposition has also committed to strengthen Australia’s relations with
Southeast Asia, including by establishing a $200 million
climate and infrastructure partnership with Indonesia.
The Australian Greens advocate
for an increase in Australia’s ODA to a minimum of 0.7% of GNI, ‘with
provision for increases in the event of natural disasters or conflicts
requiring major humanitarian interventions and climate reparations’.
One of Australia’s most senior diplomats, Gary Quinlan (now
retired former ambassador to Indonesia and Australia’s representative to the
United Nations), has criticised
the Government’s cuts made since 2014 to aid to Southeast Asia and called on
the Government to increase its development spending to ‘help build its
influence and buttress regional stability’. Australian aid to Southeast Asia fell
from around $1.3 billion in 2014–15 to just over $900 million in 2019–20.
Economists have argued that donors such as Australia should help
countries in our region recover from the ‘economic devastation’ caused by
COVID-19 by providing both grants and loan-based finance. Roland Rajah and
Alexandre Dayant from the Lowy Institute have argued that Pacific
countries face ‘a potential “lost decade”’ as a result of the pandemic and are
unable to finance the ‘scale of government largesse needed to limit the damage’.
Stephen Howes and Cameron Hill from the ANU’s Development
Policy Centre welcome Australia’s provision of a
total of $2.7 billion in ‘cheap but non-concessional loans’ to the Indonesian
New Guinea governments since late 2019, adding that ‘No [Australian] government
has ever provided as much debt financing for our neighbours’. The loans—with an
interest rate set at Australia’s bond rate plus 0.5% margin for administrative
costs—take advantage of Australia’s ability to borrow at interest rates far
lower than a country such as PNG can do. While Australia’s $1.5 billion
loan to Indonesia was not a ‘game
changer’ given the scale of its finance needs, economists nonetheless argue
that the loan was a welcome contribution to easing Indonesia’s debt burden.
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