Last weekend Tanya Plibersek, Labor Deputy Leader and Shadow Minister for Foreign Affairs and International Development, committed Labor to restoring the Coalition's latest round of cuts to Australia’s aid program and providing 'around $800 million more for overseas aid than the Liberals' over the next four years. The commitment has been near universally welcomed by the Australian development community that has had nothing but bad news about the budget for the past four years. In that context it is indeed worthy of praise. But, looking back at when the Rudd government came into power in 2007, it’s clear that Labor’s commitment to aid is not what it used to be.
So what does Labor’s commitment mean for the Australian aid budget?
An immediate restoration of $224 million in the 2016–17 budget would bring the total budget back to just over $4 billion, 5% more than the Coalition’s current plan. The extra $200 million per year in the three years thereafter, which roughly pegs the aid budget to forecast inflation, would leave the aid program at roughly $4.3 billion in 2019–20, about $200 million or 5% higher than the Coalition’s planned 2019–20 budget.
Labor's planned increase is substantial but it would only slightly nudge up our aid generosity. It would bump up aid as a proportion of Gross National Income from 0.21% under the Coalition’s budget to only 0.22%, a level that would still be the worst point of generosity in Australia's history and far below the OECD average of 0.3%. There is also the UN mandated goal of 0.7%, achieved a few years ago by the United Kingdom while it was the depths of austerity.
Plibersek’s statement also set out how a Labor government would spend almost all of the planned increase. The UNHCR would be allocated an additional $450 million over three years, a sensible commitment considering the strain the sector is under. Core funding to NGOs would be lifted by $40 million a year, a 30% increase on the current budget of $130 million that goes directly to Australian NGOs. To be clear, NGOs have proven to be effective implementing partners time and again, but there was no justification given as to why the sector, which had a heavy presence at the Labor announcement and is also the most vocal in the development community, was singled out for such a large increase in funding. Together these two commitments make up $600 million of the planned $800 million increase, leaving whatever is left to restore the cuts made in 2016–17. That doesn’t leave much room for any more bold funding commitments.
Of course, Plibersek is right to argue that 'it is impossible to fix the aid program quickly' but we should also ask ask how much more Labor can and should reasonably commit to. The simplest way to answer that question is to look at what the last Labor government did.
Table 1: Labor then and now*
Note: I take a five-year horizon under Rudd and a four-year horizon under Shorten as the government has committed to restoring the $224 million in the 2016–17 cycle whereas, while Labor won the election in November 2007, its first budget wasn’t until 2008/09. Dataset here
Table 1 shows that, over a similar timespan the Rudd government delivered an increase to the aid budget double that to which Labor has promised under a Shorten government. While the previous scale-up wasn’t without its teething pains, and I doubt AusAID could have handled a scale-up at any faster rate, the comparison illustrates Labor position on foreign aid has softened significantly since it last waged an election campaign as an opposition. I would argue that this is driven by a few factors.
The first is that we simply don’t have a champion of the aid program with the weight and influence of Kevin Rudd in 2007. Rudd’s personal commitment to foreign aid is well known, and likely far outweighed the majority of his own party. The clearest reflection of this can be seen in the successive delays to the scale-up trajectory committed to by Rudd after he was removed from Cabinet in 2012.
The second is that there was a much clearer bipartisan commitment to foreign aid in the 2007 election. A sequence of high profile regional interventions and disasters (Timor-Leste, the Regional Assistance Mission to the Solomon Islands, and the Boxing Day tsunami being the most prominent) showed the Coalition how critical our aid program can be and resulted in our aid budget nearly doubling (in nominal terms) under the Howard government between 2000/01 and 2007/08. (ODA/GNI increased from 0.24% to 0.28% over the same period.) This led to a bipartisan commitment to increase the aid budget to 0.5% in the 2007 elections. Neither party has such a commitment this time around.
Finally, this election campaign contrasts starkly to that of Howard and Rudd nearly a decade ago. The hyperactive media cycle, devotion to polling, and instability on both sides of the aisle have left political leaders increasingly reluctant to try to lead and change public opinion in areas beyond the bread and butter issues of domestic politics. In this context, both sides of politics appear to have decided there are no votes in aid, and the domestic agenda will dominate this campaign more than most. In a period where the key determinants of Australia’s future are international, and the humanitarian needs that can only be served by a robust aid program are becoming even more acute, this is very unfortunate state of affairs. Labor has at least devoted time and thought to developing an aid policy but it is clear this opposition is not as internationalist in its approach and perhaps even philosophy than the Labor party that fought (and of course won) the 2007 election.
Tanya Plibersek will address the Lowy Institute on Tuesday 31 May. Details here. Greens leader Senator Richard Di Natale’s speech on foreign policy, delivered at the Lowy Institute on 17 May, can be found here.
Photo courtesy of Flickr user DFAT
*Correction: This piece was edited on May 27. The author was mistaken in assuming Labor’s commitment to the aid budget in 2019/20 would be $800m higher than the Coalition’s. This is in fact a cumulative commitment over four years and the piece has been edited to reflect that. We apologise for the error.