The latest budgetary and structural reforms of AusAID will alter
Australia's overseas development assistance program. Of
significant note is the Foreign Affairs Minister, Julie
Bishop's, announcement of a $600 million cut to this year's
foreign aid budget and the limitation of further foreign aid
investment over the next 4 years of forward estimates. This totals
$4.5 billion in cuts over 4 years, which will see a fall in aid
spending of up to 0.31% of gross national income (GNI): different
from the former government's target of having foreign aid grow
to 0.5% GNI.
Questions have been raised over the implications of the spending
cuts. As former Foreign Minister Bob Carr commented, one aim of
foreign aid has been to alleviate conditions exploited by extremist
militant groups. Will the cuts to foreign aid indirectly affect
Australia's regional security?
Combined with the funding cuts, the Coalition has also announced
the integration of AusAID into the Department of Foreign Affairs
and Trade (DFAT) and the abolition of a dedicated cabinet portfolio
for international development.
While the long-term effect of the integration of AusAID with
DFAT are so far unclear, we trust it will strengthen aid
effectiveness of continuing development programs, and involve
NGO's in an increased role in program implementation to cover
any gaps caused by staffing cuts to AusAID.
It is likely that AusAID staff will now be reporting to the
deputy secretary of DFAT in a down-scaled, and arguably more
cost-efficient administrative structure. The integration of AusAID
and DFAT has been welcomed by some who see the merger as a means of
strategically aligning foreign aid with Australia's trade,
development and diplomatic objectives around the world. But others
have cautioned that the integration could in fact signal the
disintegration of a government agency that has played a specialised
role in driving Australia's foreign aid policy and
The cuts have been justified as economically rational given the
serious slump in revenue and the still volatile global economy,
although several NGOs have criticised the new government for
targeting the foreign aid budget to make savings.
In an open letter to the Prime Minister CEO of CARE Australia,
Julia Howes and World Vision CEO, Tim Costello have criticised the
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