Cutting Aid: Why, At What Cost and For What Gain?

The Gillard Government has today confirmed their intention to shift hundreds of millions of dollars from the overseas aid budget to the immigration budget. A total of $375 million in foreign aid will now be redirected to paying for onshore processing of asylum seeker applications. Not surprisingly there has been a significant amount of anger directed at the government from overseas aid providers in the charity sector.

The refocused budget allocations will help pay for the living costs of asylum seekers, 400 of whom have been released into the community, while their refugee claims are being processed.

The move comes weeks after the end of the parliamentary year. The contentious decision has arrived at a time when the government’s budget surplus is looking an even more impossible and unbelievable prospect than when Treasurer Wayne Swan announced that there would be four successive budget surpluses during his May fiscal statement.

Governments have a habit of making bad decisions, ones that will cause a political storm, when they think few are watching. And few likely are paying as much attention to the political debate, not just because of the toxic year in politics, but because we are coming ever closer to Christmas and there is always much less attention at this time of year.

And this latest decision about the aid budget comes after an announcement by the ALP Government that, in search of the elusive surplus, they would delay increasing the aid budget to 0.5% of gross national income by a year.

With the Australian Government moving to temporarily decrease our contribution to foreign aid, the question must be asked: What will be gained by our decision in terms of our domestic political environment?

The answer is, absolutely nothing. The chances of our budget returning to surplus are non-existent unless much more dramatic cuts are made. Returning the budget to surplus is not even seen, according to some polls, as a political necessity to help curb the poll woes facing the Labor Government.

If the Labor Party is so desperate to return to surplus, perhaps they could have considered cutting unnecessary subsidies and government programs which offer assistance to people and businesses that do not require government help.

What makes this decision harder to contemplate, even more baffling, is, as Shadow Minister for Foreign Affairs Julie Bishop has pointed out, that it comes just two months after Australia won a seat on the UN Security Council. And what did we do to help our chances of winning a temporary spot on the Security Council? Why, we played around with our aid budget, offering significant financial incentives to developing nations.

But far more important than the terrible look this has in terms of our recently won UN campaign, is the human cost of such a short-sighted decision, from a government desperate to at least appear as if they have a shred of credibility when it comes to balancing the federal budget.

Of course foreign aid can always be better targeted and is most efficiently allocated when it is focused completely on our sphere of influence.

But development aid should never be cut . This is especially the case when such funds will not be replaced by payments from other nations, when our ultimate aim is to increase foreign aid and especially not when the domestic political situation is part of the equation and will not be changed by such a decision.

This is exactly what has occurred and in the shadow of Christmas.

About Tom Bridge

A perennial student of politics, providing commentary for money and for free. Email me at tbridgey@gmail.com or contact me on 0435 035 095 for engagements.

Posted on December 18, 2012, in Federal Politics, International Politics and tagged , , , , , , , , , , , , , , , . Bookmark the permalink. 2 Comments.

  1. The hard fact of the matter is that ‘Charity does begin at home’! Whilst it’s all very well to castigate this government for cutting aid, these are not times when fiscal latitude should be allowed to flourish. While I agree with you that there are subsidies, and welfare payments which could well do with a serious review and revision (down or to non-existent), surely maintaining a viable economy is of greater importance, therefore maintaining subsidies and welfare payments at this time can only assist in maintaining the economy. If our economy goes backwards the first thing to suffer will be the overseas aid budget, and to a more substantial degree than $375 million.
    I understand that our overseas aid budget is likely to be in the region $7.7 BILLION. My calculations suggest that $375 mill represents about 0.005% of that budget.
    While it is hard to reduce our o/s aid budget, given the circumstances it could have been a lot worse.

  2. Correction on percentage it should be 4.6% — mea culpa!

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