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Sppech by the Minister for Foreign Affairs, the Hon Alexander Downer MP at the launch of the Simons Report

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Speech by the Minister for Foreign Affairs, the Hon Alexander Downer MP at the launch of the Simons Report 9.45am

2 May 1997

Parliament House : Committee Room 1R1

It gives me great pleasure today to announce the release o f the Report o f the Committee to Review the Australian Aid program.

First, I would like to congratulate and express my thanks-to the Committee members who have undertaken this review: the Chairman Mr Paul Simons, Ms Gave Han and Professor C liff Walsh. They have produced a report o f substance.

The Committee has dealt with an extraordinarily wide range o f complex and sensitive issues with insight and balance.

This is a significant achievement, not least because o f the short timeframe in which the Committee was required to assess the aid program, undertake extensive consultations and formulate its report.

In this context, I must also thank the Secretariat to the Committee for their efforts in helping to deliver such a comprehensive report.

When I commissioned the review in May last year, I was fulfilling an election commitment that arose from a concern that Australia’s aid policy had lost its way under the previous Government.

The program had become burdened down by agendas that reduced the effectiveness of Australia’s international development efforts. I considered it was time for a thorough re-examination o f the overseas aid program to ensure it was better placed to respond to the challenges o f development into the next century.

The Committee’s report certainly represents just that - a fresh, independent re­ examination o f A ustralia’s aid policies and activities. It is, I consider, the most important contribution in over a decade to the public policy debate in Australia on the nature and role o f Australia’s aid program.

In announcing this review I said that I had been concerned for some time that Australia’s aid program needed to refocus on its fundamental purposes, namely to assist developing countries to meet the needs of their people, and to assist in achieving a more secure and equitable international order.

I am especially pleased to see that the Committee has recommended a clear, development-focused objective for Australia’s aid program in place o f the confusion o f goals created by the Labor Government. The Committee’s recommendation

reaffirm s my strongly held view that aid should not be seen as a subsidy for business nor as a mere extension o f foreign policy objectives. As I said last year, aid is not diplom acy by other means. The principal objectives o f Australia’s aid program should be to ensure the reduction o f poverty and the promotion o f economic developm ent as a permanent means o f overcoming such poverty. The report has endorsed that view.

The report goes on to affirm some o f the pillars o f the current program, such as its priority for the Asia Pacific and its focus on the design o f country specific programs.

But the report also makes some recommendations that are likely to be controversial, such as the untying o f procurement to Australian and New Zealand suppliers. In addition, it recommends Australia move away from the UN target of 0.7% o f GNP to what the Committee sees as the adoption of more realistic targets for aid volume.

At my direction, the Committee considered the possible role o f a loans scheme in the A ustralian aid program.

In presenting its findings on this issue, the Committee has confirmed that the G overnm ent was right to abolish the discredited DIFF scheme. The Committee said that DIFF was inherently flawed. It was flawed because it tried to pursue two frequently competing objectives - to be both aid and industry assistance.

The Committee explicitly recommends that ‘A tied aid mixed credit scheme such as DIFF should n o t be reintroduced into the Australian aid program’.

Instead, the Committee has recommended the introduction o f a new, untied soft loans scheme. It proposes that these loans operate within country programs and be subject to rigorous targeting and development appraisal.

My own view is that some form o f soft loans scheme with a clear developmental purpose may be a useful addition to the options available for aid delivery. But I am interested in hearing reactions to the report, before determining the Government’s final position.

I w elcom e the challenges this report presents to the way the Government administers the aid program. The report puts forward 79 specific recommendations and a range of other suggestions for change in the aid program and in the way it is managed.

The kind o f aid program I want to emerge from the review process is well illustrated by a project I saw when I was in Indonesia last week.

I was in Lombok, in Eastern Indonesia. Australia has provided water and sanitation to over 900,000 people in this arid and poor province of one of our closest neighbours. I received a very warm welcome from the people of Lombok. That AusAID project bears testam ent to the value o f aid which focuses on poverty reduction through

sustainable development.

Having initiated the first major review of the aid program since the Jackson committee, I now w'ant to ensure that the community has every opportunity to thoroughly and thoughtfully consider the report's recommendations.

Therefore, I am also pleased to outline today a two-step process the Government will implement to respond to the report.

The first step will be a period of public comment on the report. It is essential that the Government take into account community reactions.

For this reason, there will be a series o f opportunities over the next three months for members o f the public and interest groups to present their views. I am inviting written comments on the report and letters seeking this comment will shortly be sent

to a wide range o f interested parties, including non government organisations.

There will also be a number of seminars held to promote further public discussion of the report.

Taking into account public views, the Government will, as a second step, complete its analysis of the report. This will include consultation between relevant government agencies.

Following these steps, I expect to announce the Government’s response to the Simons Report by the end o f the year, in time for incorporation in next year’s budget.

While this consultation is underway I do not intend to comment on the detail o f the report. I consider such comment would be inappropriate and would colour the process. .