What would a Coalition government do with Australia’s foreign aid? Associate Director Robin Davies of ANU’s Development Policy Centre has examined both sides to compile an election policy brief.
International aid and development policy barely figures in Australian federal election campaigns. Incumbent parties feel no need to articulate policies for a new term; opposition parties tend to make a few low-profile and often random-seeming commitments that, perhaps, appeal to specific constituencies.
The 2013 election campaign is no exception. Labor has to date said nothing about its third-term aid and development priorities, offering, by default, more of the same. The Coalition has riffed on a few themes in its comments on aid and development policy since the 2010 election but has yet to convey a clear or always consistent position on what it would do with Australia’s aid program.
Despite this paucity of policy offerings, I have sorted through what we know about the direction of the parties’ thinking on aid and development policy to produce a policy brief. It shows that, by comparison with the situation during, say, the 1996 election campaign, the two major parties have a great deal in common on aid and development. At the same time, they differ on some important specifics.
The points on which there is agreement, or at least a broad consistency of approach, include aid growth, the appointment of a dedicated minister for international development, implementation of the recommendations of the 2011 independent review of aid effectiveness, an increased emphasis on support for private-sector development and the use of aid to meet offshore costs associated with Australia’s asylum seeker management regime.
There are six main points on which the parties substantially differ.
First and most importantly, the growth of aid is likely to be slower under the Coalition. Although Labor has over-promised wildly and has reduced the forward estimates for aid by almost $6 billion in the current and previous financial years alone, it has consistently delivered large aid increases. Aid has grown by about 50% in real terms, to $5.7 billion this year, since Labor came to office.
Labor can’t reasonably hope to meet its current 0.5% aid/gross national income target in 2017-18, because that would require a single-year jump of almost $2 billion in that year, but it would probably deliver larger annual aid increases than the Coalition over the next few years. The Coalition would most likely set a more distant but credible 0.5% target, but make increases subject to the achievement of yet-to-be-specified aid management benchmarks or “hurdles”.
Second, the Coalition would reduce the geographic dispersion of aid and de-emphasise aid in its dealings with Papua New Guinea, the Pacific island countries and Timor-Leste. It has signalled it would revamp the seasonal worker program and might set aside PACER Plus (the proposed Pacific free trade agreement) in favour of a more stepwise approach to regional economic integration in the Pacific.
Third, the Coalition has said “aid for trade” is a “cornerstone” of its aid program. What it means by this isn’t completely clear. Technically, 17% or so of Australia’s aid is already in this category. Most probably the Coalition intends to increase support for private-sector development by expanding or replicating mechanisms such as the existing enterprise challenge fund and by increasing funding or economic infrastructure. There is no indication that “aid for trade” is code for using aid to subsidise the international ventures of Australian businesses, but in some quarters the term is being read that way.
Fourth, the Coalition has said it won’t use aid to support action on climate change in developing countries. This policy even extends to climate change adaptation but, in the end, the Coalition would find it very difficult to resist the use of aid to fund adaptation programs.
Fifth, the Coalition can be expected to take a harder-edged, more selective approach to multilateral aid. Like Labor, it would have to make quite heavy use of the multilateral system to spend a growing quantity of aid. However, traditionally the Coalition has been a reluctant contributor to many multilateral funds and programs, particularly those administered by the United Nations. And the Coalition has ruled out the use of aid to meet asylum seeker costs within Australia, but will probably be tempted to follow Labor’s policy in relation to costs associated with community detention and resettlement offshore.
It could be some time after the election before it is clear what the incoming government will do with the aid program. For either side, there should be three major priorities: restore predictability of aid funding over the four years ahead by setting realistic spending targets and publishing indicative country and regional allocations; clarify policy on the use of the aid program for asylum seeker costs and place firm limits on those costs, both offshore and onshore, so as to minimise impacts on existing and planned programs; and bring a renewed emphasis to the maintenance and improvement of program quality through more rigorous evaluation and review, more contestability in program design, and more transparency with respect to individual aid activities.
The Coalition, if elected, will have a lot of clarifying to do on points such as the timeframe and funding trajectory to be associated with its 0.5% aid/GNI commitment, the handling of asylum seeker costs and a raft of other things. A comprehensive aid and development policy statement should follow, with indicative four-year resource allocations in conjunction with the 2014-15 budget, considering advice from AusAID and other sources.
Given the Coalition’s strong undertaking to shift Australia’s relationship with its near-neighbours beyond aid, it might also take the opportunity to make this the first statement of its kind that incorporates policies on both aid and international development.