22
September 2016
PDF Version [2808KB]
Wendy Bruere and Cameron Hill (with the assistance of Stephen
Fallon)
Foreign Affairs, Defence and Security Section
Executive summary
- Since the election of the Coalition Government in September 2013,
funding reductions as well as administrative and policy changes have been made
to Australia’s overseas aid program. This paper outlines the key changes under the
Abbott and Turnbull governments from September 2013 to June 2016.
- Successive and very large funding cuts and the decision by both
major parties to eschew a timetable for the goal of Official Development
Assistance (ODA) expenditure reaching 0.5 per cent of Gross National Income (GNI)
have been explained as a response to worsening fiscal circumstances. This marks
a pronounced shift away from the trend of previous years, which saw bipartisan
support for significant increases to ODA.
- The merger of the former Australian Agency for International
Development (AusAID) with the Department of Foreign Affairs and Trade (DFAT)
aligns aid more closely with Australia’s foreign and trade policy objectives,
while potentially diminishing the relative weight accorded to poverty reduction
and sustainable development in considerations of Australia’s ‘national
interests’.
- Both the Abbott and Turnbull governments emphasised the aid
program’s strengthened focus on the Indo-Pacific region. Nevertheless, as part
of the wider funding cuts, aid to most countries in East Asia and South and
West Asia has been reduced since 2013. Australian aid to Africa and the Middle
East has been significantly reduced and aid to the Caribbean and Latin America is
being phased out completely. While aid to Papua New Guinea has increased, aid to
the other Pacific Island countries has been subject to smaller funding
reductions. Many global programs have also had their funding reduced.
-
A new monitoring and evaluation framework attempts to link
funding more closely to performance. This has been accompanied by an increased
emphasis on aid-for-trade and gender equality as sectoral priorities.
- Climate change has been an area of significant readjustment, with
references to global warming all but disappearing from key aid policy documents
during the Abbott Government. Climate change re-emerged as an important area of
assistance, with the Turnbull Government funding commitments at the 2015 Paris climate
change summit.
- The 44th Parliament demonstrated a continued interest
in aid and international development issues. Several parliamentary inquiries
examined various aspects of the aid program and alternative policies were announced
by the Labor Opposition and other non-government parties ahead of the 2016
federal election.
Contents
Executive
summary
Introduction
Background: aid program funding and
expenditure 2005–2013
Funding cuts to the aid program
2013–14 to 2016–17
The Coalition’s 2013 election
platform
2014–15 Budget
Funding cuts
Geographic priorities
Other changes
2015–16 and 2016–17 Budgets
2015–16 Budget
2016–17 Budget
2016 federal election campaign
Changes to aid management and policy
directions
Integration of AusAID and DFAT
Aid and the ‘national
interest’
Aid-for-trade and private sector
development
The new performance framework:
changes to monitoring and evaluation
The Indo-Pacific and increased
consolidation
Addressing gender inequality
Climate change
The 44th Parliament and Australia’s
overseas aid program
Parliamentary Committee inquiries
‘Australia’s overseas aid and
development assistance program’, SFADT References Committee, 2014
‘The role of the private sector in
promoting economic growth and reducing poverty in the Indo-Pacific’, JSCFADT,
2015
‘The human rights issues confronting
woman and girls in the Indian Ocean–Asia Pacific region’, JSCFADT, 2015
‘The delivery and effectiveness of
Australia’s bilateral aid program in Papua New Guinea’, SFADT References
Committee, 2016
Alternative policies
Labor Opposition
Other parties
Conclusion
Introduction
The Coalition Abbott
Government made important changes to Australia’s Official Development
Assistance (ODA) programs following its election in September 2013.
Large reductions in funding,
foreshadowed in the Coalition’s September 2013 pre-election costings, commenced
in January 2014. A further series of funding cuts were announced in the December
2014 Mid-Year Economic and Fiscal Outlook (MYEFO) and implemented in the
2015–16 Budget. While non-government organisations (NGOs) and some independent experts
strongly criticised the severity of these cuts, they continued to be
implemented as part of the Turnbull Government’s 2016–17 Budget ahead of the dissolution
of the 44th Parliament.
Alongside the reductions in
funding, the Coalition Government has changed the way Australia’s aid program
is administered, and has adjusted sectoral priorities. These changes include:
- the merger of the former Australian Agency for International
Development (AusAID) with the Department of Foreign Affairs and Trade (DFAT)
- a more explicit focus on using aid to pursue foreign and trade
policy goals
- an increased focus on aid-for-trade
- changes to monitoring and evaluation
- a higher proportion of aid funding directed to the Indo-Pacific
region and
- a commitment to strengthen the focus on addressing gender
inequality and, after some adjustment, the causes and impacts of climate change
through aid.
Some of these changes, such as the
merger of AusAID and DFAT and the increased emphasis on the national interest
and aid-for-trade, have been criticised by some NGOs and other experts. Others,
such as an increased focus on addressing gender inequality and adjustments to funding
for climate change, have been welcomed. But they have also raised new questions
about how these issues will be incorporated effectively into existing programs,
how outcomes will be measured and how new activities will be funded.
The government heralded its changes
as part of a ‘new aid paradigm’.[1]
Some commentators supported this view, welcoming the changes as ‘arguably, the
most significant structural reform in our aid history’.[2]
Others, however, have suggested that the changes pursued by the Coalition
Government since 2013 represent little more than a ‘rebranding’ or a process of
‘incremental change’, rather than a fundamental shift in approach.[3]
The 44th Parliament
continued to take a strong interest in aid and development issues during its
term. The Senate Foreign Affairs, Defence and Trade (SFADT) References
Committee conducted inquiries into ‘Australia’s overseas aid and development
assistance program’ (2014) and ‘the delivery and effectiveness of Australia’s
bilateral aid program in Papua New Guinea’ (2016). The Joint Standing Committee
on Foreign Affairs, Defence and Trade (JSCFADT) conducted inquiries into ‘the
role of the private sector in promoting economic growth and reducing poverty in
the Indo-Pacific region’ (2015) and ‘the human rights issues confronting women
and girls in the Indian Ocean–Asia Pacific region’ (2015).
This paper
outlines the key changes to the aid program during the Abbott and Turnbull Coalition
governments during the period from September 2013 to May 2016, and examines the
responses from NGOs and other experts. It also briefly discusses the findings
and recommendations from parliamentary committee inquiries conducted during the
44th Parliament, as well as alternative policies put forward by the Labor
Opposition and non-government parties over this period.
Background:
aid program funding and expenditure 2005–2013
During the
period 2005 to 2013 Australia’s ODA expenditure steadily increased, both as a share
of Gross National Income (GNI) and in absolute dollar terms. While Australia’s agreement
to the Millennium Development Goals (MDGs) in 2001 is sometimes viewed as the
point at which Australia committed to increase ODA as a percentage of GNI, Tim
Costello, the then CEO of World Vision Australia, explained that this was not
the case:
Australia
agreed, along with all other UN [United Nations] members, to adopt the MDGs in
2001. Goal 8 sets 0.7% of GNI as the benchmark level of development assistance
that developed countries should commit to. However, the Howard Government
insisted that both the 0.7% target and the use of the MDGs as a measure of aid
effectiveness were only aspirational. Hence it was not until 2007 that
Australia agreed to use the MDGs as a benchmark in measuring the effectiveness
of its own aid program.[4]
Prior to
this, Prime Minister John Howard had pledged at a 2005 UN conference that his government
would double the size of Australia’s aid program by 2010, from $2 billion to $4
billion annually.[5]
This commitment was preceded by Australia’s historic $1 billion aid package to
assist Indonesia’s reconstruction and development after the 2004 Indian Ocean
tsunami.[6]
The Howard Government’s last aid budget statement, delivered in May 2007, included
major new initiatives to assist Australia’s developing country partners to deliver
better education and health services ($1.1 billion over four years), improve
infrastructure ($500 million over four years), and address environmental and climate
change challenges ($196 million over five years).[7]
During the subsequent
2007 election campaign, the Labor Party committed to reaching 0.5 per cent of
GNI in foreign aid by 2015–16 and this target gained bipartisan support.[8]
The Sydney Morning Herald reported that ‘aid sector insiders say it is
the first time in memory that overseas aid has received so much attention
during an election campaign’.[9]
The 2008‒09 Budget reflected the Rudd Government’s 2007 commitment, stating
that ‘in 2008‒09 AusAID will commence implementation of the Government’s
long-term commitment to increase Australia’s official development assistance
(ODA) to 0.5 per cent of GNI by 2015‒16’.[10]
The 0.5 per
cent target was reaffirmed by both parties during the 2010 election campaign. Opposition
foreign affairs spokesperson, Julie Bishop, stated that if the Coalition were elected
it would ‘honour our commitment to deliver 0.5 per cent by 2015’.[11]
Despite the reaffirmation of the target in a 2011 review of the aid program, the
commitment was delayed by one year in the Gillard Labor Government’s
2012‒13 Budget. It was again delayed (to 2017‒18) in the 2013–14
Budget.[12]
In this last budget statement, the Gillard Government committed to total ODA
expenditure estimated at $5.66 billion, or 0.37 per cent of GNI.[13]
Funding cuts
to the aid program 2013–14 to 2016–17
The Coalition’s
2013 election platform
With the
election of the Coalition Government in September 2013, a timetable for achieving
the 0.5 per cent target was abandoned altogether and aid funding was
significantly reduced from previous levels. The Coalition’s final pre-election costings
document, published just prior to the 2013 federal election, stated:
It is unsustainable to continue massive projected growth in
foreign aid funding whilst the Australian economy continues at below trend
growth. Australia needs a stronger economy today so that it can be more
generous in the future. The Coalition will cut the growth in foreign aid. We
will index the increase to the Consumer Price Index. Reductions in projected
aid spending of $4.5 billion will be allocated to other Coalition policy
priorities, including productive infrastructure such as Melbourne’s East West
link ($1.5 billion), Sydney’s WestConnex ($1.5 billion) and the Brisbane
Gateway Motorway upgrade ($1 billion).
The Coalition remains committed to the Millennium Development
Goal of increasing foreign aid to 0.5 per cent of GNI over time, but cannot
commit to a date given the current state of the federal budget after six years
of Labor debt and deficit. As well, the Coalition will re-prioritise foreign
aid allocations towards Non-Government Organisations that deliver on-the-ground
support for those most in need.[14]
After
assuming office in September 2013, the Coalition Government announced in
January 2014 that it would cut $656 million—or almost 12 per cent—from the
2013‒14 aid budget.[15]
2014–15
Budget
Funding cuts
In the
2014–15 Budget, the total ODA expenditure estimate was $5.032
billion, with Foreign Minister Julie Bishop explaining that the budget would be
‘stabilised at $5 billion in 2015‒16, thereafter
increasing annually by CPI [the Consumer Price Index]’.[16] The impact of
this decision was described at the time by the Parliamentary Library—‘in
effect, the Government expects to “save” $7.7 billion over five years by
maintaining ODA at its 2013–14 level of $5 billion in 2014‒15 and 2015‒16 before it starts to grow in line
with CPI from 2016‒17’.[17]
Despite the commitment to ‘stabilise’ funding and to
increase aid spending in line with inflation, the subsequent December 2014 MYEFO contained additional cuts to the aid budget. These cuts amounted to $3.7 billion over the forward estimates.[18] Stephen Howes and Jonathan Pryke of the Development Policy Centre at
the Australian National University (ANU) described the 2014 MYEFO reductions as
the ‘biggest aid cuts ever’ and ‘completely unprecedented’.[19] They explained
that ‘after inflation the cuts, which
continue to 2016‒17, are 28% relative to this year. In 2016‒17, aid
will be 33% less than it was relative to the Labor’s [sic] final year of
aid spending, that is, 2012‒13’.[20]
They also detailed how this compared to previous funding cuts:
...most of the cuts
will be implemented next year (2015‒16), when the aid program will fall by
around $1 billion or 20%. This will be the biggest single-year change ever to
the aid program (up or down), more than three times as big as the next largest
cut ($323 million in 2012‒13 prices; back in 1986‒87).
It is also the largest percentage change (up or down), and almost twice as
large as the next largest cut (–12%, again 1986‒87).[21]
In terms of the
trends in aid funding, under the scheduled reductions, ODA expenditure has
fallen from a high of $5.4 billion in 2012–13 to an estimated $3.8 billion in
2016–17 (see Figure 1). According to projections by the Development Policy Centre,
in proportional terms the cuts will see Australian aid falling further to a
record low of 0.21 per cent of GNI by 2019‒20 (see Figure 2).
In
comparative terms, over this same period (2012–13 to 2019–2020) Australia is forecast
to drop from 13 to 19th place in the ODA/GNI rankings of the Organisation for
Economic Co-operation and Development’s (OECD) 28 bilateral donors, assuming other
donors maintain current levels of aid.[22]
In 2015, Australia ranked 16th on the ODA/GNI comparison (see Figure
3).
According
to the Lowy Institute, the funding cuts put Australia:
...at odds with the aid budget trajectories that many other
OECD countries are following. In 2013, the Conservative government in the UK
became the first G7 donor to reach the OECD’s 0.7% of GNI target, increasing
its official development assistance (ODA) by 27.8% on 2012 levels. It has since
passed a bill enshrining the 0.7% commitment into law.[23]
Figure 1: ODA expenditure, 1971–72 to 2019–2020 (est.)
Source: Development Policy Centre,
Australian aid tracker: trends
Figure 2: ODA as a percentage of GNI, 1971–72 to 2019–20
(est.)
Source: Development Policy Centre, Australian aid tracker: trends
Figure 3: ODA as a percentage of GNI for members of
the OECD Development Assistance Committee, 2015
Source: Development Policy Centre, Australian aid tracker: comparisons
Unsurprisingly,
some aid organisations and analysts criticised the cuts on the basis of their
potential impact on the world’s poor. UNICEF Australia claimed that Australia was
set to ‘become one of the world’s least generous donors’, while Care Australia
asserted that the cuts would put poverty reduction gains in the region at risk.[24]
In addition
to decreasing available funds, aid organisations also pointed out that the cuts
combined with other changes to the aid program meant that funding would become
less predictable and that this would reduce the effectiveness of Australia’s
aid by undermining long-term planning. Oxfam Australia stated in its submission
to the 2014 Senate inquiry into ‘Australia’s overseas aid and development assistance
program’:
...the
implementation of aid cuts, the reduction in the future aid budget and the
integration of AusAID and DFAT ... have generated significant uncertainty within
DFAT, NGOs, beneficiaries and partners on the ground with particular disquiet
around the predictability of funding.
Yet
predictability is one of the fundamental aid effectiveness principles to which
Australia has committed. Aid programs generally require a multi-year commitment
to enable proper planning, implementation, impact and evaluation. A lack of
certainty as to the continuity of funding is detrimental to aid programming and
may undermine the benefits already achieved.[25]
This view was
also reflected in the Australian Council for International Development’s (ACFID)
submission, which argued that aid funding is considerably less effective when
it is highly variable and unpredictable from year to year.[26]
Geographic priorities
The 2014‒15
Budget was an opportunity for the Coalition Government to further detail which
regions and countries would be subject to reductions in funding. The geographic
areas that experienced the most significant cuts in proportional terms were
Africa and the Middle East and Latin America and the Caribbean.
While in
Opposition, the Coalition had claimed that increases in aid to Africa, Latin
America and the Caribbean prior to Australia winning a UN Security Council seat
in late 2012, were linked to the Labor Government seeking support for the bid
from countries in these regions.[27]
Using this justification, the Coalition asserted that the cuts could be seen as
returning aid spending in these areas to pre-bid levels.[28]
ODA to sub-Saharan
Africa was reduced from $355.1 million in 2013‒14 to $186.9 million
in 2014‒15. In the case of the Middle East and North Africa (excluding
the Palestinian Territories), the budget estimate over the same period was
reduced from $46.8 million in 2013–14 to $8.8 million in 2015–16.[29]
In Latin
America and the Caribbean, programs were scheduled to be phased out
completely and the 2014‒15 budget estimates for the two regions were
$16.1 million and $5 million respectively, down from $24.8 million and $13.3
million in the 2013‒14 budget estimates.[30]
As the
Development Policy Centre noted at the time, one of the few winners was Papua
New Guinea (PNG), which received an increase in ODA from the 2013‒14 budget
estimate of $507.2 million to an estimated $577.1 million in the 2014‒15 Budget.[31]
The increased aid to PNG—and a commitment to spend 50 per cent of this aid on
infrastructure projects—was a continuation of the existing Regional
Resettlement Arrangement, an agreement made with PNG under the Rudd Labor
Government in June 2013.[32]
This was despite the Coalition Opposition’s previous criticism of the agreement
in the months leading up to the 2013 election, when it argued that the Rudd Government
had ‘subcontracted out to PNG the management of our aid program’.[33]
Other changes
Two other key
changes in the 2014‒15 Budget were the restoration of humanitarian and
emergency funding, which had been cut in January 2014, and the cessation of the
previous government’s use of funds from the aid budget to meet onshore asylum
seeker subsistence costs.
In January 2014, the
allocation for Humanitarian, Emergencies and Refugee programs was cut to
$264.2 million, down from a 2013–14 budget estimate of $383.9 million. This was
increased to $338.6 million in the 2014–15 Budget.[34]
A significant portion of these funds has been provided to the international
response to the ongoing humanitarian crisis in Syria, to which successive Australian
governments have committed over $430 million since 2011.[35]
While the
reversal of the Labor Government’s decision to allocate some $375 million from
the aid budget to meet onshore asylum seeker costs was welcomed by
organisations such as ACFID, some criticism was made of the aforementioned
increase in ODA to countries cooperating with Australia on asylum seeker
policies.[36]
In an article deeply critical of the government’s aid policies, Thulsi
Narayanasamy, the director of the aid monitoring NGO, AID/WATCH, suggested that
the aid increase for PNG agreed by Labor and continued by the incoming
Coalition Government was a ‘bargaining chip’ for Australia’s detention centre
on Manus Island.[37]
Similar criticisms were levelled following the government’s decision to increase
aid to Cambodia by $40 million over four years as part of a refugee
resettlement agreement announced in October 2014.[38]
2015–16 and
2016–17 Budgets
2015–16 Budget
In accordance with the schedule of cuts outlined in the December
2014 MYEFO, the 2015–16 Budget saw the biggest single reduction in annual aid
by any Australian government. Total ODA dropped by around 20 per cent, or almost
$1 billion, decreasing from an expenditure outcome of $5.031 billion in 2014–15
to budgeted expenditure of $4.051 billion in 2015–16.[39]
In terms of the impact on country and regional programs, the
Development Policy Centre observed at the time:
The regions that were worst hit, not surprisingly, were those
deemed outside of Australia’s traditional areas of interest, now defined as the
Indo–Pacific region. Sub-Saharan Africa saw its budget cut by 70
percent. Aid to the Middle East, including the Palestinian Territories,
declined by 43 percent.
The Pacific and PNG have been spared for the most
part. Indeed, DFAT country allocations remain constant in nominal terms in all
Pacific island countries, even in the North Pacific, which has not
traditionally been a priority for Australia. Aid to Papua New Guinea has
declined, but only marginally, by 5 percent. Funding for regional programs in
the Pacific will be 10 percent lower in 2015-16.
The government has adopted an across the board 40 percent cut
in other regions in order to meet the $1 billion of cuts to the aid budget. In East
Asia, all but two countries suffered a cut to aid of 40 percent. Indonesia
fared no worse than the Philippines or Mongolia, despite recent commentary
suggesting that larger cuts were a possibility. Timor Leste was protected with
a 5 percent cut. Aid to Cambodia will remain constant in nominal terms—the only
country in East Asia where this is the case. Aid for regional initiatives was
similarly cut by 40 percent.
The same approach was applied in South and West Asia,
where all but one country saw a 40 percent decline in aid from Australia. That
one country, Nepal, will receive the same level of funding as in 2014-15. The
40 percent cut was applied to regional initiatives in South Asia, just as in
East Asia.[40]
(emphasis added)
Indonesia, which suffered one of the largest cuts in terms
of Australia’s East Asia aid programs, appeared unconcerned, at least publicly,
with a government spokesman stating in May 2015:
‘Indonesia at the moment is no longer a country that needs
aid for development’, he said. ‘Nevertheless, any aid given by Australia is
their effort to increase, to strengthen our partnership. And so, it’s their
right to give, but Indonesia is not asking’.[41]
In terms of global programs, while NGO programs, humanitarian
aid and multilateral development banks were largely spared from large cuts, funding
for UN agencies (with the exception of UN Women) and volunteer programs was subject
to significant reductions.[42]
The magnitude of the cuts was
confirmed by figures released subsequently by the OECD which showed that
Portugal and Australia were the two members of its Development Assistance
Committee which oversaw the largest declines in ODA in 2015.[43]
2016–17
Budget
As part of the December 2014 MYEFO, over $220 million worth
of cuts to the aid program were scheduled for the 2016–17 Budget. Despite
calls from NGOs in the lead-up to the Budget for these to be reversed, the cuts
proceeded.[44]
The 2016–17 country and regional allocations reinforced
those set in 2015–16. Total estimated ODA to PNG and the Pacific was
increased slightly, 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) was largely stabilised in the wake of the large cuts in 2015–16.[45]
Global programs bore the brunt of the 2016–17 cuts,
decreasing from $334 million to an estimated $199 million as a result of
delayed payments to some international health funds.[46]
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, will also constrain future country program growth.[47]
No further cuts over the forward estimates were announced in
the 2016–17 Budget which provides for aid to increase in line with inflation
over the forward estimates.[48]
2016
federal election campaign
In the penultimate week of the 2016 federal election
campaign, the government released its foreign policy statement, The
Coalition’s Policy for a Safe and Prosperous Australia. The statement flagged
two new aid initiatives. The first is a commitment to invest $100 million over
five years in a new ‘regional health security partnerships fund’ that will
‘harness Australia’s world leading research institutions, scientific expertise,
innovators and entrepreneurs to improve health outcomes in our part of the
world’.[49]
The second initiative is a mentoring program that will connect ‘female leaders
in Australia with emerging women leaders in our region’.[50]
This latter program is estimated to cost $5.4 million over five years. Both
initiatives would be funded out of the aid budget.[51]
Changes to aid management and policy directions
Integration
of AusAID and DFAT
In addition
to the funding cuts, one of the first and most dramatic changes the Abbott Government
made to the management of the aid program was the abolition of AusAID and the integration
of the agency’s aid management function into DFAT. This change was announced soon
after the election of the Coalition in September 2013 and the merger commenced in
November 2013. This change had not been foreshadowed
prior to the election, nor had it been identified as an individual savings
measure in the Coalition’s pre-election costings.[52]
One of the most immediate impacts of the decision was that the candidates
selected for AusAID’s 2014 graduate program had their offers withdrawn,
prompting some to initiate legal action against DFAT.[53]
In a 1
November 2013 media release, the Foreign Minister, Julie Bishop, argued that the
merger would result in:
...the alignment of Australia’s foreign, trade and
development policies and programs in a coherent, effective and efficient way ...
It will promote Australia’s national interests, through contributing to
international economic growth and poverty reduction, and support Australia’s
foreign and trade policy. [54]
The minister
went on to emphasise that integration of AusAID and DFAT would ‘strengthen
economic diplomacy as the centre of Australia’s international engagement’.[55]
While Australia’s aid agency had been through a number of changes in the past
40 years, including being part of the wider foreign affairs portfolio from 1977
to 2010, it consistently had a separate identity and a direct
reporting relationship with its ministers from late 1974 until the 2013 change.[56]
The merger followed similar changes undertaken by
conservative governments in Canada and New Zealand.[57]
Acknowledging the significant challenges associated with the merger, the
Secretary of DFAT, Peter Varghese, observed early in the process that ‘we are
bringing together two moving and shrinking parts, and that’s going to be a
very, very complicated process’.[58]
He also noted that ‘there has to be a general acceptance that we’re going
through this integration process but that the spine of our organisational
structure is going to rest with the DFAT organisational structure’.[59]
PNG, one of Australia’s largest aid recipients, ‘enthusiastically’
welcomed the merger.[60]
The country’s Prime Minister, Peter O’Neil, stated that it would allow Australia’s
development assistance to be better aligned with PNG’s priorities.[61]
Noting the muted reaction on the part of Australia’s other key development
partners, one commentator surmised that ‘capitals such as Jakarta and Hanoi
will view the change as Australia’s business’.[62]
Although some NGOs acknowledged the potential benefits of the merger,
many also raised concerns about how the change might negatively impact development
effectiveness, including through the loss of experienced staff. World Vision
described the merger as a ‘backward step’ and its then CEO, Tim Costello, said
it would ‘detract from the fundamental purpose of foreign aid—which is to
alleviate poverty overseas’.[63]
ACFID also
questioned whether the merger would reduce the effectiveness of aid delivery,
noting in a February 2014 submission to the 2014 Senate reference committee’s inquiry
that the new structure was at odds with international practice, and that the ‘delivery
and assessment of a large aid program is obviously not the traditional activity
of a foreign ministry’.[64]
Care
Australia, in its submission to the same inquiry, argued that despite some potential
benefits—including a ‘consistent Government position on aid and development’, ‘the
potential for a much stronger diplomatic effort on key development issues’ and ‘greater
integration across government in areas which have both domestic and
international implications such as pandemic disease’—there was still a need for
the aid program to have a distinct identity within the portfolio.[65]
Some of the risks of the merger raised by Care Australia included:
...uncertainty
about policy priorities and budgets are disrupting program delivery and could
undermine effectiveness; loss of experienced aid staff could weaken program quality
and performance oversight; short term imperatives could over-ride long-term
issues of effectiveness and sustainability; and foreign policy objectives may
distort effective aid spending.[66]
Save the
Children agreed that ‘aid should be aligned with our national interest’, but
emphasised that ‘the concept of national interest must be interpreted more
broadly than Australia’s immediate foreign affairs and trade objectives’.[67]
It argued that a key benefit of AusAID’s status as an executive agency—that is,
being administratively separate, but with a direct reporting responsibility to
a minister—was that it ‘had a distinct humanitarian identity, housed a
dedicated body of expertise on aid and development policy and programs, was one
step removed from short-term political objectives, and was a highly visible
demonstration of Australia’s commitment to international development’.[68]
As part of
concerns over how the merger might detract from aid effectiveness in the
long-term, Oxfam Australia noted the need to retain appropriate aid expertise,
referring to the experience of the New Zealand Government, which ‘found that
retaining development specialists was key to an effective aid program when it
merged aid into foreign affairs and trade’.[69]
Oxfam’s submission to the inquiry emphasised that ‘it is essential that
expertise and institutional learning in the complex area of international
development be maintained and that the development of skills be encouraged’.[70]
While Oxfam
Australia acknowledged that the merger offered ‘opportunities to strengthen
Australia’s contribution to international development by better aligning
foreign affairs, trade and aid’ and ‘opportunities to better integrate
Australia’s poverty reduction aims into its trade negotiations, with potentially
significant benefits for developing countries’, it also emphasised that ‘the aid
program must be given appropriate focus and priority within DFAT.[71]
The impact
of losing experienced staff was also raised by ACFID, which pointed to a 2012
Australian Aid Stakeholder Survey by the Development Policy Centre that had
already ‘identified high staff turnover as the most serious weakness in the
effectiveness of Australia’s aid program. It was found to undermine the
consistency of effort, and the accumulation of expertise, required to deliver
effective aid’.[72]
As anticipated,
after the merger, a significant number of former AusAID staff was not retained.
In evidence to Senate Estimates hearings in early 2015, DFAT Secretary Peter Varghese
stated that of the 500 positions abolished as a result of the merger, 374
redundancies had been offered. Former AusAID staff were disproportionately
represented with 221, compared to 153 pre-merger DFAT staff.[73]
Given that prior to integration, DFAT had 2,521 Australian staff
(plus 1,771 locally engaged staff) while AusAID had 1,724 Australian staff (and
651 locally engaged staff) this disparity is even more pronounced.[74]
As well as noting
the Australian staff lost through redundancies, some commentators highlighted
the risk that reduced staff satisfaction among locally engaged staff, who are often
cited as a key asset of the aid program, could lead to an attrition of skilled
workers. The Development Policy Centre warned of indications that talented local
staff in Indonesia were ‘looking for, and finding, alternative options’, a
development that ‘could compromise the quality of aid delivery and thus reduce
the claimed foreign policy dividends from the merger’.[75]
Reduced morale
among former AusAID staff at DFAT was revealed by the media in a leaked 2014 survey
of staff satisfaction, which showed former AusAID staff were less happy after
the merger, and considerably less happy than staff who had been in DFAT prior
to the merger. According to an ABC News report:
...only 33 per cent of former AusAID staff feel “part of the
team”, compared to 70 per cent of their colleagues who have always been at DFAT
... Twenty-one per cent of ex-AusAID staff surveyed indicated they would leave
the agency within the next two years, compared to 11 per cent of staff who were
at DFAT before the integration.[76]
The report
added that ‘some AusAID staff have privately described it as a “hostile
takeover” by DFAT’.[77]
A DFAT spokesperson said at the time that ‘the relatively low satisfaction
rates among former AusAID staff was [sic] not unexpected, given the
scale of the changes, and that the survey was conducted only four months into
the integration process’.[78]
Commenting in
2015 on the results of a follow-up survey, Varghese observed that while overall
morale had improved, not all the challenges of integrating AusAID into DFAT had
been overcome and that the results painted a ‘mixed picture’.[79]
He observed that DFAT’s information technology and human resource management
systems had come under ‘significant pressure’.[80]
In mid-2015, it was reported that almost 800 former AusAID staff were still
awaiting the necessary upgrades to their security clearances.[81]
Varghese also said the department could still ‘do more to embed the DFAT
values, improve transparency and ensure we are flexible and open to change’.[82]
Aid and the ‘national interest’
In
discussions of the goals and objectives of aid, the Abbott and Turnbull governments
frequently emphasised the importance of pursuing Australia’s ‘national interest’
as a key justification for the AusAID-DFAT merger.[83]
This received some criticism, including from AID/WATCH which argued that ‘Australia
is a signatory to the Paris Declaration of Aid
Effectiveness which acknowledges that aid should not be driven
by donor priorities; so aid policy shouldn’t be based on Australia’s commercial
or domestic considerations’.[84]
Indeed, as
noted, in Opposition the Coalition had decried the alleged use of the aid
program to pursue foreign policy objectives such as the UN Security Council
membership bid. In 2010, Julie Bishop (as Shadow Foreign Minister) had argued that
the Rudd Government had ‘massively increased the aid budget in the year prior
to the vote and there are growing concerns that it will be used to buy votes,
particularly in Africa and Latin America, where there are large numbers of UN
votes’.[85]
It is important to note that the Security Council bid was led by DFAT, not
AusAID. If correct, therefore, Ms Bishop’s allegation would seem to suggest a
close ‘alignment’ between Australia’s foreign policy objectives and the aid
program at the time, despite the fact that these were managed across two
separate agencies.
In fact, furthering the ‘national interest’, however
defined, has been a long-standing goal of the aid program under
successive governments, both Labor and Coalition. In its 2006 white paper on
Australian aid, the Howard Government stated that the official objective of the
Australian aid program was ‘to assist developing countries to reduce poverty
and achieve sustainable development, in line with Australia’s national interest’.[86] The Labor
Government’s 2012 aid policy, An Effective Aid Program for Australia: Making
a Real Difference—Delivering Real Results, stated ‘The fundamental purpose
of Australian aid is to help people overcome poverty. This also serves
Australia’s national interests by promoting stability and prosperity both in
our region and beyond’.[87]
Under the
Abbott and Turnbull Coalition governments, the objective of the aid program was
determined as:
...to promote Australia’s national interests by contributing
to sustainable economic growth and poverty reduction ... The Australian
Government’s aid program will promote prosperity, reduce poverty and enhance
stability with a strengthened focus on our region, the Indo-Pacific.[88]
In this context, the policy debate is less about whether or not the aid
program should be used to serve the national interest, and more about how the
‘national interest’ is defined in particular circumstances. At issue is the
weighting that is accorded to the long-term benefits of an effective aid
program that does—and, just as importantly, is seen to—reduce poverty and help
partner countries address their long-term development priorities, relative to
that accorded to more immediate foreign and trade policy considerations.
These elements of the ‘national interest’ are not necessarily mutually
exclusive. There are times, however, when the relative priority accorded to each
requires conscious choices and trade-offs. As one former AusAID senior official
observed just prior to the merger, ‘there is tension from time to time between
AusAID and DFAT in terms of how development can support foreign policy
objectives’.[89]
In the absence of a dedicated institutional and intellectual body responsible
for advancing a development perspective on the national interest, these choices
and trade-offs are more likely to favour narrower, short-term objectives.
Nevertheless, while the merger of AusAID and DFAT represented a strengthening
of the weight accorded to foreign and trade policy objectives, this has been
characterised by some as less of a major policy shift and more of a symbolic change
or ‘rebranding’. Professor Stephen Howes from the Development Policy Centre takes
this view:
...all the talk of economic diplomacy and the national
interest seems to be a way to rebrand the aid program, to sell it to a
sceptical Australian audience ... if the Foreign Minister can firm up support for
aid using a different language then all strength to her.[90]
Others are less
sanguine, describing the pursuit of the AusAID–DFAT merger in order to better
align aid with foreign and trade policy objectives as ‘considerable pain for
marginal policy gain’.[91]
Aid-for-trade
and private sector development
In a speech
in April 2014, the Foreign Minister emphasised that the centrepiece of the
Coalition Government’s approach to aid would be the use of ‘aid-for-trade’ to
support economic growth and attract private sector investment in developing
countries:
In these first seven months as Foreign Minister, one of my highest
priorities in this area has been to adopt an ‘aid for trade’ policy which uses
foreign aid to connect businesses in developing countries to regional and
global supply chains. This includes provision of infrastructure, training and
business support. It also involves helping countries reform their trade and
economic policies and improve their capacity to negotiate trade agreements.
On average, each dollar invested in aid for trade initiatives increases
recipient country exports by eight dollars.
....
We will also work with our partners to identify specific market
failures, and address them through well targeted projects and programs to
create governance environments that attract international, particularly private
sector investment.[92]
The government’s
aid-for-trade policy contains a target for the aid program to lift its
expenditure in this area to least 20 per cent by 2020.[93]
A 2015 report on the performance of Australia’s aid details the changes and
progress as follows:
Over the last
nine years, the average proportion of the aid budget spent on aid for trade was
13.8 per cent. The estimated expenditure on aid for trade in 2013–14 was $675
million, equivalent to approximately 13.5 per cent of total ODA. It is
estimated that this will increase to approximately 14.7 per cent of total ODA
in 2014–15. If realised, this would demonstrate good initial progress in
meeting the 20 per cent target.[94]
Aid-for-trade
and private sector development were areas also promoted by the previous Labor government
through its support for large infrastructure and connectivity projects such as
the Cao Lanh bridge in Vietnam, the inclusion of aid components in various free
trade agreements and its 2011 announcement of a new ‘Mining for Development’
initiative.[95]
Supporters
of aid-for-trade, such as Jim Redden from the University of Adelaide’s
Institute for International Trade, have argued:
Recent research across the Asia Pacific and elsewhere
demonstrates an increasingly positive correlation between more open,
competitive trade policies and sustainable poverty reduction if certain
pre-requisites (trade openness, domestic reform & support for adjustment
costs, robust and responsible private sector, international reform and political
will) are in place.[96]
Organisations
and experts contesting the increased focus on aid-for-trade have countered that
while trade liberalisation and economic growth may be necessary conditions for
poverty reduction, they are rarely sufficient. They have pointed to the fact
that around 73 per cent of the world’s poor now live in so-called ‘middle
income’ countries, despite these countries being the ‘major engines of global
growth’.[97]
There have
also been some questions around the evidence base that underpins aid-for-trade.
In an article on The Conversation, research consultant Anna Gero argues
that the effectiveness of aid-for-trade has not actually been
clearly established, as studies to date have not properly assessed poverty reduction
impacts:
Despite the growth in aid for trade interventions globally, critics
argue that there remains a lack of data on if, how, and to what extend aid for trade interventions impact on levels of
poverty. While studies are emerging that aim to assess
the aid for trade “lessons from the ground”, most fail to provide details of local impacts of aid for trade,
instead focusing on macro-level results.
And as is the case with many evaluations, causal linkages between aid
for trade interventions and poverty are based on assumptions and are inherently
difficult to measure, posing a challenge for donors as well as NGOs that may
begin incorporating aid for trade into their programming in order to access
funds through the aid program.[98]
As well as
promoting the growth of the private sector to drive development, the concept of
aid-for-trade includes engaging the private sector in ‘the design or delivery
of investments; innovative approaches to project financing; public-private
partnerships; improving the regulatory environment for private sector
participants; or addressing other constraints to economic growth’.[99]
In an April 2014 speech, the Foreign Minister highlighted the ‘innovative approaches and different business models the private
sector can bring’ and how these can provide ‘solutions for otherwise
intractable development challenges’.[100]
In March
2015, the Foreign Minister announced the first three innovationXchange initiatives—part
of a $140 million project involving global and local organisations, businesses
and experts in innovative approaches ‘to revolutionise the delivery and
effectiveness of Australia’s aid program’.[101]
Under the initiative, all new aid investments are assessed for their ability to
‘explore innovative ways to promote private sector growth or engage the private
sector’.[102]
A warning
regarding this approach has been raised by Matt Tinkler from Save the Children,
who argues that ‘if private sectors are chasing commercial returns then by
their very nature they are unlikely to occur in the hardest to reach places’.[103]
Other NGOs have cautioned that ‘human rights and public interest must be
safeguarded when using development aid to leverage private finance, including
public-private partnerships’.[104]
One policy option
in this area that both the Abbott and Turnbull governments repeatedly ruled out,
however, is formally re-‘tying’ Australia’s aid to the use of Australian goods
and services in order to benefit local companies and exporters. DFAT Secretary Peter
Varghese highlighted soon after the integration of AusAID into DFAT that this former
policy, which was abolished in 2006, would not be revisited:
...it’s also important to understand that when the government
talks about aid and trade, they’re not talking about using the aid program to
promote Australian exports. Their front-of-mind concern is the role for the aid
program in building up the capacity of developing countries better to engage in
the international trading system.[105]
Despite a subsequent call from the JSCFADT to review this
policy (see below under ‘Parliamentary committee inquiries’), the principle of
untied aid was reaffirmed in the government’s 2015 aid-for-trade strategy:
This approach is consistent with the
Government’s commitment to openness in trade and competition. Untied aid is an
important way to ensure activities deliver value for money, are cost-effective
and use the best globally available expertise.[106]
The new
performance framework: changes to monitoring and evaluation
As part of
the changes relating to the aid program, the Coalition introduced a new strategic
framework for monitoring and evaluation. The June 2014 DFAT policy document, Making
Performance Count: Enhancing the Accountability and Effectiveness of Australian
Aid, detailed this framework which operates ‘across all levels of the aid
program’:
- At a strategic level, there will be 10 high level targets to
assess the aid program against key goals and priorities;
-
At a country, regional and partner program level, performance
benchmarks will be introduced to measure the effectiveness of our portfolio of
investments; and
- At a project level, robust quality systems will ensure that
funding is directed to investments making the most difference.
A key
principle underlying the framework is that funding at all levels of the aid
program will be linked to progress against a rigorous set of targets and
performance benchmarks.[107]
In order to put these principles into operation, the Office
of Development Effectiveness (ODE) and the Independent Evaluation Committee—aid
quality mechanisms established by the Howard and Gillard governments
respectively—were retained after the merger.
The ANU’s Development
Policy Centre raised some questions about this new approach,
including the removal of the previous practice of measuring the organisational reforms
associated with improved aid delivery. Under a previous
three-tiered performance framework adopted by the Gillard Government, corporate
reforms such as reducing excessive staff turnover were measured as part of the
third tier. While supportive of an approach that gives ‘more attention to
country and project performance, and using this information to direct more
money to better programs and projects’, the Center noted that variation from
year to year can be hard to measure, and that measuring the internal reforms of
an aid organisation was one of the few reliable ways to track effectiveness:
The worry is
that the three new tiers seem to have squeezed out the old third tier, which is
the most important. It is extremely difficult to measure aid results, and there
is little variation from year to year ... It is much easier to measure
organizational and operational performance. And we know that good organizations
will deliver good aid.
The sorts of
things that should be measured in the third tier are: how often staff change
positions; how transparent the aid program is; what the average aid project
size is; how timely decision making is; how well the various systems needed to
produce effective aid are working.
Yes, it’s
process, process, process. But don’t screw your nose up at it. Sometimes
process is the best and most important thing to measure. The aid program got
better at reporting on process with its old three-tier framework. For the first
time, the aid program started reporting, for example, how long staff were in
position. It would be sad if that start was reversed ... process should get more
not less profile in any new approach to aid effectiveness and results
reporting.[108]
The Centre has argued subsequently that transparency—an aspect
of aid management that has been nominated as worsening in recent surveys of aid
stakeholders—is one area where measures of organisational performance should be
assessed as part of the aid program’s annual reporting.[109]
Changes to
the aid program discussed earlier, such as reduced funding and loss of experienced
staff, could also impact on the ability of DFAT to effectively monitor the aid program.
As noted, Oxfam Australia argues that the effective evaluation of aid programs
requires reliable funding, as the project cycle can take years. Care Australia has
pointed out that losing experienced former AusAID staff could weaken the
ability of effective performance oversight—‘frequent shifts in policy, budget
and program objectives complicate relations with partners, disrupt program
delivery and make an assessment of impact and effectiveness difficult’.[110]
Another element of the changes is the emphasis on performance as ‘a
key criteria used to determine future budget allocations’.[111]
In June 2014, the Foreign Minister said that Australia, through
the use of performance-based aid, ‘will offer increased funding for programs
and organisations found to be particularly effective in meeting targets and
benchmarks’.[112]
While performance-based approaches have been generally supported in the
aid effectiveness literature, they also raise difficult questions. For example,
so-called ‘fragile’ or conflict-affected countries can present difficult and
costly operating environments in which progress is often slow. These countries are,
however, often also the ones most in need of assistance. The return on
investment could appear low—depending on exactly what criteria is used to
measure performance—and, as a result, those most in need could be excluded from
receiving aid. Some of Australia’s closest neighbours (such as PNG, East Timor
and the Solomon Islands) fall into this category.
Arguably, it is for this very reason that performance does not appear
to be being used to drive funding allocations at the country level. As an
analysis of these allocations in the 2015–16 Budget observes:
The Performance of Australian Aid 2013-14 report
released by DFAT last month shows very clearly where aid is performing well—in
East Asia, including Indonesia. These are the countries that have seen their
aid programs cut by 40 percent. The only two countries spared such cuts in East
Asia are the two worst performing ones: Timor Leste and Cambodia. Similarly,
the worst performing region, the Pacific and PNG, is the only one to have been
protected from the aid cuts.[113]
Similarly, at the sectoral level, areas such
as gender equality—which are often characterised by incremental progress and often
involve institutional or cultural change—are less amenable to the use of
performance incentives based simply on funding.
While these issues can be addressed through
effective planning—the new framework includes ‘aid investment plans’ that will
be ‘tailored to the different development contexts and priorities of the
countries we work in’— there remain multiple challenges to their application.[114]
Many of these challenges relate to the inevitable complexities and tensions
that arise in balancing considerations of aid effectiveness, varying indicators
of performance and multiple permutations of the ‘national interest’.
The Indo-Pacific
and increased consolidation
Two of the
ten ‘key targets’ in Making Performance Count are ‘focusing on the
Indo-Pacific region’ and ‘increasing consolidation’—that is, reducing the
number of individual investments to focus efforts and reduce transaction costs
for the donor and recipient countries.[115]
Both of
these strategies reflect international agreements on aid effectiveness to which
Australia has committed. The 2008 Accra Agenda for Action—a statement to
improve aid effectiveness signed by developing and donor countries, as well as multilateral
aid agencies—commits signatories to ‘reduce costly fragmentation of aid’.[116]
In the Paris Declaration on Aid Effectiveness—the 2005 document agreed
prior to the Accra Agenda—donor countries commit to ‘make full use of their
respective comparative advantage at sector or country level’.[117]
Australia
has a clear comparative advantage in the Indo-Pacific region due to proximity
and knowledge, as well as long-standing relationships. In proportional terms,
most of Australia’s aid has traditionally gone to the Indo-Pacific, a region in which many countries are still developing and face
significant poverty issues. Even before the recent changes, Australian ODA
to the Indo-Pacific was already 86 per cent of country and regional aid.[118] According
to DFAT, the government’s changes increased this to around 92 per cent.[119]
The stated
goal of this consolidation is to ‘reduce the number of individual investments
by 20 per cent by 2016–17 to focus efforts and reduce transaction costs’.[120]
In its report, Performance of Australian Aid 2014–15, DFAT stated that progress
toward this goal was ‘on track’:
The aid program is on track to achieve this target within the
required timeframe. By 1 July 2015, the number of individual investments had
reduced by just over 18 per cent ... Other measures also show strong
consolidation in aid administration. Over the two years from July 2013 to July
2015, the average size of aid investments has increased by more than 20 per
cent. Over the same period, there has been a 27 per cent reduction in the
number of aid agreements (contracts and grant agreements) managed by DFAT, and
a 73 per cent increase in the average value of agreements under management.[121]
Given
ongoing funding reductions, the increased focus on the Indo-Pacific has not
translated into additional aid for the region. Over the four budgets bought
down by the Abbott and Turnbull governments, there has been a continuing decrease
in overall aid funding for most Indo-Pacific countries in East Asia and South
and West Asia, including both middle income countries such as Indonesia and
Vietnam, and low income countries such as Bangladesh and Afghanistan. As noted,
one notable exception in East Asia has been Cambodia. Aid to Pacific Island
countries, with the exception of PNG, has been subject to smaller reductions.
While acknowledging
that Australia has a particular obligation in relation to its region, groups
such as ACFID have emphasised the need to continue some assistance to Africa,
arguing that there ‘is good cause for continuing a strategic and modest focus
on aid and development assistance for Africa’ and that by 2012, ‘over 50 per
cent of the world’s poor lived in Africa’.[122]
Addressing
gender inequality
The Foreign
Minister has placed a very high priority on addressing gender inequality
through the aid program. One of the current strategic targets for Australia’s
overseas aid is that ‘more than 80 per cent of investments, regardless of their
objectives, will effectively address gender issues in their implementation’.[123]
The Foreign Minister has explained the development rationale behind this
target:
When women are able to actively participate in the economy, and in
community decision-making, everybody benefits ... Training women for employment,
building their capacity and challenging barriers to their participation will
deliver social and economic benefits to all societies. Evidence shows that it
is women who spend extra income promoting the health, education and well-being
of their families.[124]
The minister has also
highlighted the economic costs of gender inequality—‘it is estimated that the
Asia-Pacific alone loses around US$50 billion a year because of limited female
access to jobs and an estimated $30 billion a year is lost because of poor
female education’.[125]
While the previous
Labor government had committed to a strengthened focus on women and girls in
the aid program, the Coalition Government’s commitment to specific gender
equality funding targets was welcomed by NGOs, including the International
Women’s Development Agency (IWDA) and the child rights organisation, Plan
International. IWDA stated that the 80 per cent target ‘has the power to
transform the status of women’s rights across Asia Pacific’.[126]
Both of
these organisations, however, voiced some reservations about how the enhanced
commitment to gender equality will be delivered in the face of ongoing funding
reductions. IWDA said it was ‘pleased that the empowerment of women and girls
is stated as an overall priority for Australian aid’ but pointed to other cuts in
cross regional programs that risk having ‘a disproportionate impact on women
and girls, and slow[ing] progress towards gender equality’, including water and
sanitation, climate change and environmental sustainability, and governance.[127]
At the end of January 2015, Plan International argued that the government’s aid
cuts would have a disproportionate impact on girls and could mean that over the
financial year 2015–16:
- 220,000 fewer girls will be enrolled in school.
- 400,000 fewer girls will be immunised.
- 3,153 fewer classrooms where girls can learn will be renovated or built.
- 157,000 fewer girls will see improved access to safe drinking water.
- 750,000 fewer textbooks will be made available for girls.[128]
Nonetheless,
there has been some important progress. DFAT’s Performance of Australian Aid
2014–15 report, released in February 2016, observed:
...in 2014–15, 78 per cent of aid investments were rated as
satisfactorily addressing gender equality during their implementation, just
short of the target of 80 per cent. This was a significant improvement from the
2013–14 base line of 74 per cent.[129]
The report also
acknowledged, however:
...investments in the priority investment area of
“infrastructure, trade facilitation and international competitiveness”, on the
other hand, saw significantly lower ratings than the previous year with an
overall rating of 64 per cent satisfactory.[130]
In a 2014 evaluation
report, the ODE also highlighted the challenges in the economic empowerment
sector:
Australia has had less success integrating gender
equality into its key economic sector investments (agriculture, rural
development, transport, energy, trade and business and banking) compared to
sectors like health and education.[131]
The ODE also
noted that while ‘economic sector investments with a specific gender focus are
few and have not specifically focused on established pathways for women’s economic
empowerment’, this is something that ‘appears to be improving with new
policies, guidance and gender capacity’.[132]
In this
context, it is important to highlight that measurement of gender outcomes—even
defining what, precisely, should be measured—is a contested issue. The
Development Policy Centre notes that there remains some ambiguity in what the
80 per cent target actually means, noting that even aid projects which do not
have gender as a focus, can have a satisfactory score:
The [Smart Economics: Evaluation of
Australian Aid Support for Women’s Economic Empowerment] report reveals
that only 55 per cent of aid projects have gender as a significant or principal
objective. The other 45 per cent are not focused on gender equality.
The aid program’s performance management
system already requires every project to report on its gender progress, and all
projects are rated, regardless of whether gender is a focus. In that system, as
the ODE report shows, even projects which are not focused on gender can get a
satisfactory gender score. Indeed, the report shows that more than two-thirds
of projects for which gender is not a focus nevertheless report satisfactory
progress against gender.[133]
In the same
article, the authors note another concern with meeting the 80 per cent target—‘only
about one-third of Australian aid staff interviewed felt confident about how to
incorporate gender within a project cycle, and many pointed to a need for more
sector-specific advice’.[134]
It is no
surprise therefore, that there exists some confusion around incorporating
gender into projects and measuring results. This is widely recognised as a
complex area in which measures of progress can vary significantly depending on
the context. UN Women gives an indication of this complexity in one of its online
Guidance Notes:
There is no
single recipe for effectively monitoring and evaluating gender mainstreaming
efforts. Instead, gender-sensitive M&E systems must be innovative and
adaptable, and comprise a carefully selected suite of complementary approaches.[135]
This is also
reflected in research by the OECD, which recommends that gender indicators be adjusted
according to specific development contexts:
Although
there is often a temptation to simply apply universal templates and frameworks,
it is important to adapt gender equality indicators so they are relevant to the
specific context ...To be meaningful and illuminating, indicators need to be
derived in consultation with local people, and to reflect the context of a
particular region, country or community. [136]
This issue
of complexity is important as DFAT has already raised concerns about the lack
of effective monitoring and evaluation of gender-related outcomes, and limited
staff understanding in this area:
Only
one-quarter of the initiatives reviewed reported any gender-related outcomes
and only at the simplest level— sex-disaggregated data on participation in
training, and uptake of services. There was a lack of department-wide guidance on
how to structure and implement a monitoring and evaluation plan to assess gender-related
outcomes.[137]
The difficulties
associated with measuring gender outcomes are also worth emphasising in the
context of the changes the Foreign Minister has announced in the way aid will
be measured, the impact of staff cuts and the reduced budget. As discussed previously,
reporting is being simplified, some monitoring and evaluation expertise has
been lost through staffing cuts, and the lack of certainty around funding could
negatively affect forward planning. This is likely to make an already
challenging task even more difficult.
In addition,
if future funding is dependent on showing strong results, this could risk
creating incentives to design indicators that are easy to attain, rather than
indicators that most accurately measure actual development outcomes. It could
also risk providing incentive to omit ‘negative’ indicators, such as increased reporting
of domestic violence.
Climate change
Climate change was an area of significant change and readjustment
under the Abbott and Turnbull governments, moving from an issue that received comparatively
little attention under the Abbott Government to one which gained a high profile
under the Turnbull Government in late 2015.
The Labor Government’s 2013‒14 aid budget statement, mentioned
‘climate change’ 76 times in 160 pages, including in the ‘strategic goals’.[138]
The statement estimated environment-related expenditure to be around $600
million for the financial year.[139]
In contrast, the Abbott Government’s 2014‒15 budget
document, at 60 pages, contained only three references to ‘climate change’, a
further one to ‘climate variability’ and two to ‘climate-related events’ and
‘climate-related shocks’.[140]
Nor did it contain an overall estimate for total environment or climate change expenditure.
This reflected the view put by Julie Bishop from Opposition in December 2012:
Climate change funding should not be disguised as foreign aid
funding. That’s been the view of the United Nations and yet this government
still continues to do it. We would certainly not spend our foreign aid budget
on climate change programs.[141]
Given the region’s
particular vulnerability to the impacts of climate change, some NGOs argued that
this lack of attention to climate change was at odds with Australia’s
long-standing commitment to, and focus on, the development needs of the Pacific
Island countries.[142]
According to Oxfam Australia:
Millions of the world’s poorest
people are already bearing the brunt of climate change because of its damaging
effects on their livelihoods, food security and peace. Our concern about
ongoing funding for climate adaptation has arisen because of the recent budget
cuts to the overall volume of aid to several ‘climate vulnerable’ Pacific
nations, as well as a 97% cut for ‘Climate Change and Environmental
Sustainability’ under ‘Cross Regional Programs’ and the elimination of all contributions
to ‘Global Environment Programs. ...Pacific governments, development agencies and
scientific bodies, have consistently recognized climate change as a major
challenge to sustainable economic development in the Pacific.[143]
There were some adjustments under the Abbott Government. For
example, while initially ruling out contributing to the international Green
Climate Fund, the Abbott Government reversed this position in late 2014 with
the announcement that it would provide $200 million over four years to the organisation.[144]
Foreign Minister Bishop stated that this commitment:
...will facilitate private sector-led economic growth in
our region—the Indo-Pacific—it will be targeted in our region with a particular
focus on investment in infrastructure, energy, forestry and the like.[145]
More significant changes followed establishment of the
Turnbull Coalition Government in September 2015. In the lead-up to a major UN climate
change summit in Paris in December 2015, there was significant domestic and
international pressure on the government to provide additional financial aid to
help developing countries meet their greenhouse gas reduction targets and adapt
to the impacts of climate change.[146]
Some of the strongest pressure came from Australia’s Pacific neighbours.[147]
At the Paris summit, Prime Minister Turnbull announced that Australia would
allocate at least $1 billion over five years from the existing aid budget to
help developing countries ‘build climate resilience and reduce emissions’.[148]
Environment groups such as the Climate Institute and the
World Wide Fund for Nature welcomed this pledge as ‘encouraging’. They also argued
it fell short of the $1.5 billion per year estimated as Australia’s ‘fair
contribution’.[149]
Some development NGOs criticised the commitment on the grounds that it was not
additional funding and as a result, would potentially result in more cuts to
existing programs in areas such as health and education. Plan International
stated:
...it is deeply disappointing to see the Prime Minister’s $1
billion commitment is not a new commitment, but rather a repurposing of funds
already earmarked for Australia’s aid program. What we are seeing here is the
Government robbing Peter to pay Paul—not something the developing world can
afford on the back of years of the most savage cuts we have ever seen in our
aid program.[150]
Other groups, including ACFID, observed that Australia was
already spending close to $200 million a year on climate change aid and accused
the government of ‘repackaging [existing] announcements’.[151]
In Senate Additional Estimates hearings in February 2016, DFAT confirmed that it
had spent $229 million on climate change-related aid activities in 2014–15.[152]
The 44th Parliament
and Australia’s overseas aid program
Parliamentary
Committee inquiries
The 44th Parliament expressed a strong interest in aid and
development issues, including through several inquiries conducted by relevant
parliamentary committees. While providing an opportunity for bipartisanship on
some issues, it is important to note that many of the findings and
recommendations of these inquiries reflected their political composition; the
Opposition chaired the SFADT References Committee and non-government parties
held a majority, while the government chaired and held the majority on the JSCFADT.
‘Australia’s
overseas aid and development assistance program’, SFADT References Committee, 2014
The 44th
Parliament’s first major examination of aid issues commenced in December 2013
when the Senate referred issues relating to Australia’s overseas aid and development
assistance program to the SFADT References Committee. In light of the government’s
cuts the aid budget, the committee was tasked with assessing the government’s
ability to deliver aid in accordance with policy objectives and international commitments
and priorities, including sectoral, regional, bilateral and multilateral
partnerships. In addition, the inquiry sought to investigate the consequences
of AusAID’s integration into DFAT and the freeze in international development
assistance funding.[153]
The committee
reported in March 2014. The majority report made 24 recommendations. These emphasised
the importance of long-term planning and predictability to the aid budget,
recommending that the government release a policy framework for aid as part of
the 2014 budget process and produce a white paper to identify Australia’s
long-term aid objectives and the means to achieve them. It also recommended
that the government should ensure that the ODA/GNI ratio does not fall below
0.33 per cent and that both major parties develop a bipartisan agreement to
increase the Australian aid budget in order to achieve the ODA/GNI target of
0.5 per cent by 2024–25.[154]
A dissenting
report from the committee’s Coalition members recommended that the aid program should
continue to: deliver against the government’s stated policy objective of
promoting Australia’s national interests through contributing to economic
growth and poverty reduction; implement rigorous performance benchmarks; and
strengthen fraud management controls and systems.[155]
A dissenting
report from the Australian Greens reiterated the party’s commitment to the UN
Millennium Development Goal target of 0.7 per cent ODA/GNI by 2015, the
delinking of aid from asylum seeker policies and the reinstatement of AusAID as
an executive agency.[156]
While the government’s
response either did not agree to, or simply ‘noted’, most of the committee’s
recommendations, it did agree to release a new policy framework for the aid
program.[157]
This framework, Australian Aid: Promoting Prosperity, Reducing Poverty, Enhancing
Stability, was published in June 2014.[158]
‘The role
of the private sector in promoting economic growth and reducing poverty in the
Indo-Pacific’, JSCFADT, 2015
The June 2015 final report of a JSCFADT inquiry into ‘the
role of the private sector in promoting economic growth and reducing poverty in
the Indo-Pacific region’ made 37 recommendations. The recommendations called
for enhanced engagement with regional private sector organisations and
associations, greater involvement in ‘public-private partnership’ approaches to
infrastructure financing and, perhaps most controversially, for the government
to ‘review the aid program’s untied aid grants strategy’.[159]
The government’s response all but ruled out this latter recommendation,
arguing that ‘untied aid ensures Australian aid delivers value for money, is
cost-effective and uses the best available expertise, therefore achieving the
best results’.[160]
‘The human
rights issues confronting woman and girls in the Indian Ocean–Asia Pacific
region’, JSCFADT, 2015
The JSCFADT’s December 2015 report on ‘the human rights
issues confronting woman and girls in the Indian Ocean–Asia Pacific region’
contained 33 recommendations, many of which related to Australia’s aid program.
These included greater capacity-building to improve access to justice for women
and girls, greater efforts to improve gender parity in school enrolment and
increased support for women’s leadership across business and the public sector.[161]
The government did not provide a formal response to the
committee’s recommendations prior to the dissolution of the 44th Parliament.
‘The
delivery and effectiveness of Australia’s bilateral aid program in Papua New
Guinea’, SFADT References Committee, 2016
In May 2016, in one of the final acts of the 44th
Parliament, the SFADT References Committee released the report of its inquiry
into ‘the delivery and effectiveness of Australia’s bilateral aid program in
Papua New Guinea’. The report, which contained 18 recommendations, argued for a
strengthened focus on social accountability through more support for local NGOs
and churches, more aid for health programs and a reversal of the (relatively small)
cuts to bilateral aid made since 2013.[162]
The report also recommended that the total aid budget be increased to 0.5 of
GNI by 2024–2025, ‘effectively a call for not just a reversal of cuts but a
substantive increase in aid to PNG’.[163]
In response to the April 2016 decision of PNG’s Supreme
Court that the detention of asylum seekers was contrary to the country’s
constitution, the report recommended that ‘the Government conduct an assessment
of the impact of the closure of the Manus Island Regional Processing Centre on
development activities’.[164]
At the time of writing, it remains unclear how the court’s decision might
affect the aid components of the 2013 Regional Resettlement Arrangement.
The government did not provide a formal response to the report’s
recommendations prior to the dissolution of the 44th Parliament.
Alternative
policies
The Labor Opposition and other non-government parties
announced alternative development assistance policies during the term of the 44th
Parliament and in the lead-up to the 2016 federal election.
Labor
Opposition
In October 2015, the Shadow Minister for Foreign Affairs and
International Development, Tanya Plibersek, criticised the Coalition
Government’s ongoing funding cuts and announced that a Labor government would provide
an additional $30 million a year in aid to NGOs ‘to deliver critical projects
like maternal and child health, schooling, clean water, and sanitation’.[165]
Ms Plibersek stated that a further $10 million a year ‘will be invested to work
with these NGOs and others to improve aid effectiveness, to ensure we are
getting the most from every single dollar spent on overseas aid’.[166]
The Opposition said it would introduce specific legislative measures to
strengthen aid transparency and effectiveness.[167]
Labor also committed to provide an additional $450 million over three years to
support the work of the United Nations High Commissioner for Refugees (UNHCR).[168]
In order to fund these measures, Labor pledged during the
2016 election campaign that it would reverse the $224 million in cuts included
in the 2016–17 Budget and would restore $800 million to the aid budget over the
forward estimates should it win government.[169]
Australian NGOs were largely supportive of this announcement.[170]
However, given the need to meet over $600 million in combined commitments to
NGOs and the UNHCR, Labor’s funding would leave very little scope to increase country
programs.[171]
Labor had not said whether it would undo the merger and
restore AusAID’s status as an executive agency if elected, saying only that it
would ‘ensure the department’s culture and practices gave appropriate
prominence to development, and protected and prioritised development
expertise’.[172]
Labor also said that it would abolish the innovationXchange program.[173]
In relation to the 0.5 per cent ODA/GNI target, the Australian
Labor Party’s 2015 national platform states:
Australia should do its fair share internationally, and work
with the international community to achieve the longstanding funding targets
reiterated by the SDGs. Labor will, over time, achieve a funding target for the
aid program of at least 0.5 per cent of GNI.[174]
Labor has not committed to a revised timeframe for reaching 0.5
per cent, contending that ‘the real question is: how can we get to 0.5 after
being at 0.18 or 0.19? Certainly it can’t happen in the timeframe we had
planned’.[175]
In the weeks prior to the 2016 federal election, ACFID
called on the Liberal and Labor parties to commit to a timetable for reaching
the 0.5 per cent target.[176]
When specifically asked to commit to a timetable at a National Press Club
election debate in June 2016, both Ms Bishop and Ms Plibersek declined.[177]
Other
parties
The Australian Greens have committed to legislating and meeting
the 0.7 per cent ODA/GNI UN target by 2025, a policy that the Parliamentary
Budget Office has estimated would cost $7.97 billion over the forward estimates.[178]
The Greens’ aid and development policy also includes the establishment of an
independent office to oversee aid effectiveness and passage of the International
Aid (Promoting Gender Equality) Bill 2015, legislation that ‘would require the
Minister to report on how funds were spent, and how these funds help to promote
gender equality’.[179]
The Nick Xenophon Team has argued for the restoration ‘of
the $7.6 billion of aid funding cut by the Australian government in the 2014
budget’ and for a foreign aid budget that represents 0.7 per cent of GNI, ‘in
line with Australia's commitment to the United Nations Sustainable Development
Goals’.[180]
Similarly, the Family First party supports the 0.7 per cent target, but has not
committed to a specific timetable.[181]
The Jacqui Lambie Network has proposed halving the current
level ($3.8 billion) of overseas aid and redirecting this funding to higher
education and aged pensions.[182]
Conclusion
Since assuming office in September 2013, the Coalition
Government has made a range of changes to Australia’s overseas aid program.
The successive cuts to funding have been very large and
represent a clear shift away from the previous bipartisan commitment to
increase the aid budget. Both major parties have now eschewed a time-bound
commitment to the 0.5 per cent ODA/GNI target in the name of fiscal discipline,
even as total government outlays have increased. Indeed, while Australia’s ODA
budget has been cut by 33 per cent since 2013, spending across government has
increased by around 10 per cent over the same period.[183]
While enhancing the overall cohesion of Australia’s foreign,
trade and aid policies, the 2013 merger of AusAID and DFAT potentially diminishes
the relative institutional and intellectual weight accorded to development
objectives in calculations of Australia’s ‘national interest’. The merger has
had a considerable impact on former AusAID personnel, as well as overall DFAT
morale. It has also raised questions about whether a post-integration DFAT
has sufficient staff with the requisite skills and experience to effectively
oversee aid delivery.
Changes in other areas, such as the increased focus on
performance, aid-for-trade and private sector development and gender equality build
on previous initiatives and do not represent major policy departures. They do,
however, raise questions about how the complex development challenges
associated with each of these thematic priorities will be met within the
strictures of a much smaller aid budget and a reduced aid management capacity. In
addition, climate change has been an area of significant adjustment and an area
that that re-emerged as an important focus with the shift from the Abbott to
the Turnbull Government.
The place of the aid program in advancing Australia’s
interests and values, particularly as these relate to ongoing strategic and
economic changes in the Indo-Pacific region generated much discussion and
debate over the course of the 44th Parliament. Given the level of community
interest in the changes pursued by the Abbott and Turnbull governments, it is
clear that this discussion and debate will continue in the 45th Parliament.
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[16]. J
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[17]. R Tomar and W
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[18]. Lowy Institute for International Policy, Australian foreign aid, website,
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[19]. S Howes and J
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[20]. Ibid.
[21]. Ibid.
[22]. Ibid.
[23]. Lowy
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[24]. UNICEF
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[25]. Oxfam
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[26]. Australian
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[27]. The Rudd and
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(ABC), 18 October 2012, accessed 30 April 2015.
[28]. N Pijovic, ‘Did
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[29]. See B Carr
(Minister for Foreign Affairs), Ministerial
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accessed 29 March 2015
[30]. Ibid. ODA to
the Palestinian Territories was reduced by $4 million.
[31]. M Dornan, ‘Winners
and losers in the 2014–15 aid budget’, DevPolicy, 14 May
2014, accessed 19 April 2016.
[32]. R Tomar, ‘Australian
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[33]. D Hurst, ‘In
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[34]. Tomar and
Bruere, ‘Official Development Assistance—the future of Australian aid’, op.
cit.
[35]. DFAT, Fact
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26 May 2016.
[36]. Carr
(Minister for Foreign Affairs), ‘Ministerial statement:
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news for world’s poor as aid flat lines for two years, media release,
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[37]. T Narayanasamy,
‘There
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[38]. See: M
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[39]. DFAT, 2015–16
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[40]. M Dornan, ‘The
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[41]. F Chung, ‘Indonesia
unconcerned about foreign aid cuts’, news.com.au, 8 May 2015,
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[42]. J Pryke, ‘Beyond
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[43]. Organisation
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Directorate, Development
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[44]. ACFID, ACFID
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[45]. DFAT, Australian
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[46]. Ibid, p. 6; S
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[50]. Ibid.
[51]. Ibid.
[52]. N Towell, ‘AusAID
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[53]. N Towell, ‘Sacked
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[54]. J Bishop
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November 2013, accessed 30 April 2015.
[55]. Ibid.
[56]. R Davies, ‘The future of AusAID: bend it, don’t break it’, DevPolicy, blog, Development Policy Centre, ANU, 25 September 2013, accessed 19 April 2016.
[57]. ‘Australian
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[58]. M Grattan, ‘DFAT
secretary’s tough message about AusAID integration’, The Conversation,
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[59]. Ibid.
[60]. J Garrett, ‘Papua
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[61]. Ibid.
[62]. G Dobell, ‘Tasting
the new DFAT omelette’, The Strategist, blog, Australian Strategic
Policy Institute, 16 March 2015, accessed 16 June 2016.
[63]. World Vision,
Foreign
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[64]. ACFID, Submission
to Senate Foreign Affairs, Defence and Trade References Committee, op. cit., p.
21.
[65]. Care Australia,
Submission
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[66]. Ibid.
[67]. Save the
Children Australia, Submission
to Senate Foreign Affairs, Defence and Trade References Committee,
Inquiry into Australia’s overseas aid and development assistance program,
February 2014, p. 11, accessed 19 April 2016.
[68]. Ibid.
[69]. Oxfam
Australia, Submission to Senate Foreign Affairs, Defence and Trade References
Committee, op. cit., p. 18.
[70]. Ibid.
[71]. Ibid.
[72]. ACFID,
Submission to Senate Foreign Affairs, Defence and Trade References Committee, op.
cit., p. 22.
[73]. D Donaldson, ‘DFAT will reach 500 job cut target,
secretary tells Estimates’, The Mandarin, blog, 26 February 2015, accessed 30 April 2015.
[74]. Grattan, ‘DFAT
secretary’s tough message about AusAID integration’, op. cit.
[75]. R Davies and R
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[76]. L
Metherell, ‘DFAT
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[77]. Ibid.
[78]. Ibid.
[79]. P Thomson, ‘DFAT
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[80]. Ibid.
[81]. P Thomson, ‘Department
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(online edition), 20 May 2015, accessed 16 May 2016.
[82]. Thomson,
‘DFAT and AusAID merger “placed significant pressure” on HR and ICT’, op. cit.
[83]. See A Kirk, ‘Julie
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[84]. Narayanasamy, ‘There are problems with foreign
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[85]. J Bishop
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[86].
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[90]. Howes, ‘Five
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[91]. Cornett and
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[92]. J Bishop
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[93]. DFAT, Strategy
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[95]. ‘Top
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[96]. J Redden, ‘Perspectives on trade,
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[100]. Bishop
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[101]. J
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[102]. DFAT,
Performance
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[103]. L
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[104].
S Jones, ‘EU
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[105]. Grattan,
‘DFAT Secretary’s tough message’, op. cit.
[106]. DFAT,
Strategy for Australia’s aid for trade investments, op. cit., p. 7.
[107]. DFAT,
Making performance count, op. cit., p. 4.
[108]. Howes,
‘Five things to like about the Foreign Minister’s aid speech; and two concerns’,
op. cit.
[109].
S Howes, ‘Performance
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[110]. Care
Australia, Submission to Senate Foreign Affairs, Defence and Trade References
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[111]. DFAT,
Making performance count, op. cit., p. 16.
[112]. Bishop
(Minister for Foreign Affairs), The new aid paradigm, op. cit.
[113]. Dornan,
‘The same, the bad and the ugly’, op. cit.
[114]. AusAID,
Review
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Canberra, 2003, accessed 19 April 2016..
[115]. See
DFAT, Making performance count, op. cit., pp. 8, 11.
[116]. OECD,
‘The Paris
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p. 17, accessed 17 March 2015.
[117]. Ibid.,
p. 6.
[118]. DFAT,
2014–15 aid budget summary, op. cit., p. 3.
[119]. Ibid.
[120]. DFAT,
Making performance count, op. cit.
[121]. DFAT,
Performance of Australian aid, 2014–15, op. cit.
[122]. ACFID,
Submission to Senate Foreign Affairs, Defence and Trade References Committee, op.
cit., p. 12.
[123]. DFAT,
Making performance count, op. cit., p. 8.
[124]. Bishop
(Minister for Foreign Affairs), The new aid paradigm, op. cit.
[125]. Bishop
(Minister for Foreign Affairs), A new paradigm in development assistance,
op. cit.
[126].
International Women’s Development Agency (IWDA), ‘Holding
Australia accountable for promoting gender equality’, IWDA Blog,
blog, 5 October 2015, accessed 16 June 2016.
[127]. IWDA,
Submission
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into Australia’s overseas aid and development assistance program, pp. 1–2,
accessed 19 April 2016.
[128]. Plan
International Australia, Australian
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[129]. DFAT,
Performance of Australian aid 2014–15, op. cit., p. 9.
[130]. Ibid.,
p. 11.
[131]. Office
of Development Effectiveness (ODE), Smart
economics: evaluation of Australian aid support for women’s economic empowerment,
DFAT website, August 2014, p. 3, accessed 19 April 2016.
[132]. Ibid.,
p. 2.
[133]. A
Betteridge and S Howes, ‘Women’s
economic empowerment and Australian aid: more work to be done,’ DevPolicy,
blog, Development Policy Centre, ANU, 9 October 2014, accessed 30 April 2015.
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