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Australia needs to shore up development aid to match its reinforced engagement

MD Staff

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Australia’s active global engagement on development and its focus on fragile small island states and disaster risk reduction are commendable. However successive cuts to the country’s aid budget since 2013 are impairing its efforts, according to a new OECD Review.

The latest DAC Peer Review of Australia says the introduction of a robust performance-based framework for aid policy in 2014 and the integration of aid agency AusAID into the Department of Foreign Affairs and Trade in 2013 – though not without challenges – have encouraged innovation and a more development-friendly outlook on trade. Australia now needs to restore its official development assistance (ODA), which projections indicate could drop to an all-time low of 0.22% of gross national income in 2017/18.

“Australia uses its voice on the global stage to advocate for responses to challenges faced by small island developing states, in particular to build resilience and mitigate disaster risk. At the same time the decline in aid flows, despite steady economic growth, has affected the scope of development and humanitarian programmes, and we encourage Australia to find a way to reverse this trend,” said OECD Development Assistance Committee (DAC) Chair Charlotte Petri Gornitzka.

Australia provided USD 3.28 billion in net ODA in 2016 (0.27% of GNI), down 5.4% from USD 3.49 billion (0.29% of GNI) in 2015 and slipping further away from a target for donors to provide 0.7% of GNI as ODA. By comparison, the average ratio of ODA to GNI for DAC donors was 0.32% in 2016, and six DAC members have now reached a UN target of 0.7%.

The top five recipients of Australian aid in 2015/16 were Papua New Guinea, Indonesia, Solomon Islands, Viet Nam and the Philippines. Australia sends slightly less of its aid to least-developed countries than the DAC average but over a quarter of its ODA goes to small island developing states which are vulnerable to crises, including from weather-related shocks such as cyclones.

The Review says Australia fully implemented four and partially implemented another four of 12 recommendations in a 2013 Peer Review. The four recommendations not implemented included one to reach a stated goal of ODA at 0.5% of GNI by 2016/17.

Each DAC member is reviewed every five years in order to monitor its performance, hold it accountable for past commitments and recommend improvements. Reviews use input from officials in the review country and partner countries – Solomon Islands for this Review – as well as civil society and the private sector.

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Australia

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