From the industry reaction to Australia's overseas aid budget, one might have thought Canberra's cruel bean-counters are intentionally starving Third World orphans. The budget announcement of keeping foreign aid at around 0.35% of gross national income, or almost $5.6 billion, reflects a stepping down from a forecast increase in aid to 0.38%, but still represents an overall 4% increase in available funds.

In an era of broad budgetary restraint, this not unreasonable outcome reflects commitments given by Australia in order to secure its seat on the UN Security Council last October. It also reflects a shift away from the "hard power" of Defence, with the Iraq war drifting into history, Timor-Leste no longer active, Solomons concluding and Afghanistan looking to an end. The security emphasis now is on "soft" and "secret" power, with diplomacy drifting.