The Observatory

What’s happening in foreign aid? A brief overview and analysis for the eye health sector

Just last week, the Senate Foreign Affairs, Defence and Trade References Committee released a report from the Inquiry into Australia’s overseas aid and development assistance program–the first Senate Inquiry launched by the Coalition Government. The Inquiry undertook an examination of the Government’s cuts to the aid budget, and what effects those cuts could have to the effectiveness of Australia’s overseas aid and development program and our international relationships. The Inquiry also investigated the integration of AusAID into the Department of Foreign Affairs and Trade (DFAT) and any other potential consequences of the changes to the aid program.

Prior to last year’s Federal election, there had only been three parliamentary inquiries into aid since 2001, demonstrating a lack of parliamentary oversight of the foreign aid space. However, since the September election, the space has been in overdrive: there has been three Parliamentary inquiries called, a consultation by DFAT, and extensive dialogue, analysis and media coverage focussing on what Australia’s overseas aid and development assistance program will look like in the future.

Federal Government’s review into aid since taking office

By way of background, on the eve of the election, then Shadow Treasurer Joe Hockey announced the Coalition’s decision to cut growth in foreign aid spending by $4.5 billion over the forward estimates. This was the first mention of cuts to the aid budget by the then Opposition, and it sparked an eleventh hour election debate about Australia’s foreign aid commitments. While the cuts caused much confusion within the development sector, during the same speech, then Shadow Treasurer Joe Hockey highlighted the Opposition’s intention to re-prioritise foreign aid allocations towards non-government organisations (NGO), and noted the important and effective work that NGOs undertake. To validate the cuts and reprioritisation of foreign aid, Shadow Treasurer Joe Hockey emphasised that Australia can only grow to be a more generous donor if it first grows the Australian economy, effectively cementing the link between Australia’s economic growth and aid commitments and forming the basis of the incoming Government’s overseas aid and development agenda.

To then begin the alignment of Australia’s overseas development assistance with Australia’s national interest, it was announced that AusAID would be ‘integrated’ into DFAT. It was revealed that the Government intends the aid program to promote Australia’s national interests through contributing to international economic growth and poverty reduction, and Australian foreign and trade policy, focussing on the Indo-Pacific region, especially the South Pacific and South East Asia. There was at the time of the announcement, and continues to be, a lot of uncertainty around the merger. However, slowly, details are emerging about what form DFAT will take and where and how Australian aid will be administered. More recently four main changes have been foreshadowed:

  1. The threshold level at which rigorous design and evaluation procedures will be required will increase from $3 to $10 million.
  2. While Aid Investment Plans (previously Country Strategies) will continue to be produced, the complementary country situational analyses will be dropped.
  3. Sector Investment Plans (previously Delivery Strategies) will be optional rather than mandatory.
  4. The annual program performance reviews will only be retained for the top 12-15 programs.

Such an overhaul of the aid and development program has been called for since the 2011 Independent Review of Aid Effectiveness, and has been welcomed by many as it should reduce the onerous burden of paperwork often felt by NGOs.

The Inquiry into Australia’s overseas aid and development assistance program to examine the effects of the cuts to the aid budget and the integration of AusAID into DFAT was announced in mid-December 2013. Labor Senator Ursula Stephens moved for the inquiry and was supported by the Greens. In total there were 73 submissions to the committee from a broad range of individuals and organisations including Vision 2020 Australia and members. The Report makes a number of key recommendations that, if adopted, could effectively guide Australia’s overseas aid and development assistance program and provide greater clarity and certainty to the sector and stakeholders.

Report recommendations

The most notable recommendations from the Report include the call for: an overarching policy framework to guide all programs; refinement of the Government’s long-term strategic objectives for the aid program and the development of measures to guide and achieve those objectives; bipartisan support for a time-bound commitment to increase spending on aid to 0.5 per cent of Gross National Income; the development of benchmarks across the aid program in close consultation with the sector and stakeholders; and the release of further information regarding projects impacted by the cuts in the May Federal Budget.

Moving forward

In recent weeks, two additional parliamentary inquiries into foreign aid have been announced. One will be carried out by the newly formed Foreign Affairs and Aid Subcommittee (see below) and will examine the role of the private sector in promoting economic growth and poverty reduction in the Indo-Pacific. The other inquiry will be conducted by the Human Rights Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade and will investigate the challenges facing women and girls in the Indian Ocean and Asia Pacific region. Both inquiries were requested by the Foreign Minister Julie Bishop and are focussed on two central features of the Coalition’s Foreign Affairs Policy:

  1. Economic Diplomacy
  2. Gender Equality that is said to make up half of Australia’s aid budget and that feeds into the Coalition’s Foreign Affairs Policy – Engaging with Female Leaders in the Region.

Since taking office, the Coalition Government has also committed to a new disability development policy from 2014 and appointed the Ambassador for Women and Girls, Natasha Stott Despoja, both of which are encouraging and welcomed by the sector. The Government also renamed the Foreign Affairs Subcommittee which was under the Joint Standing Committee on Foreign Affairs, Defence and Trade, to the Foreign Affairs and Aid Subcommittee. The creation of a dedicated subcommittee on aid has been positively received as it will allow for greater oversight of the overseas aid and development program, and can play a role in improving aid effectiveness. However, while the membership of the Subcommittee has been finalised, it is still unknown how it will function as the Subcommittee’s first Parliamentary Inquiry has only recently been announced. 

Eye health sector response

Vision 2020 Australia will be responding to both newly announced inquiries in coming weeks and submissions will be published on the Parliament of Australia and also the Vision 2020 Australia website.

The Government’s fresh agenda of examining the effectiveness of the overseas aid and development assistance program, delivering more aid through non-government organisations, exploring alternative financing mechanisms and harnessing the creative power of the private sector in international aid and development, sits comfortably with the membership of Vision 2020 Australia.

We are excited, energised and keen to play our part in this new development paradigm which recognises that aid plays only a small part in genuine social and economic development. We look forward to the announcement of the 2014-2015 Federal Budget and even more clarity on the future of Australia’s overseas aid and development assistance program.

The Vision 2020 Australia Budget submission and Senate Inquiry into Australia’s Overseas Aid and Development Assistance Program submission can be found below: