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Thursday, 10 March 2005
Page: 76

Senator NETTLE (3:34 PM) —by leave—I move:

That the Senate take note of the statements.

‘Long on rhetoric and short on detail’ would probably be an apt way to describe the statement from the Minister for Foreign Affairs on Australia’s aid program. In the statement there is little mention of the focus on the international aid community’s objective of poverty alleviation but there is much mention of security, and that is Australia’s security rather than the security of many of our vulnerable neighbours. This of course reflects the government’s official objective of the aid program to advance Australia’s national interest, and this is the lens through which Australia’s aid programs are now delivered. The government’s objective only after this broad-reaching statement goes on to consider issues such as poverty alleviation and sustainable development. That is reflected in the Australian government’s response to the tsunami relief program, which evidence suggests may be more about Australia’s strategic interests within Indonesia than the interests of the Acehnese who were so badly affected in the 26 December disaster.

Looking at where the tsunami aid money will be spent, the popular perception based on reports in some sections of the media is that most of the money, if not all, will be spent on reconstruction and infrastructure building projects in Aceh, which is one of the poorest and most conflict ridden provinces of Indonesia. That may not necessarily be the case. Whilst the package does focus on areas affected by the tsunami its application is Indonesia-wide. The Prime Minister stated:

While there will naturally be a clear focus on the areas devastated by the tsunami, all areas of Indonesia will be eligible for assistance under the partnership ...

These areas of priority need are exactly those identified by the Minister for Foreign Affairs in May 2004 in his statement on the 2004-05 budget as ‘emerging areas of support’.

It is quite possible that most of the grant aid and the loans component will be spent on projects outside Aceh as a part of the expanded assistance program to Indonesia, the details of which were already being worked out by AusAID prior to the tsunami. Thus, it would appear that the tsunami disaster provided the political will and the opportunity to provide extra funding for programs which, to a degree, were already under consideration.

Australia has come under increasing domestic and international pressure in recent years to increase its aid spending overall. Groups such as the Greens and the non-government organisations that we work with see the quality of Australia’s aid program as having greater significance in some respects than the quantity. Given that, it is important to understand that the Australian government has failed in its stated objective of spending 0.7 per cent of its gross national income on official development assistance in order to meet the Millennium Development Goals, to which the Australian government is a signatory.

Australia’s overseas development assistance has stagnated for the term of the Howard government. In the 10 years preceding the Howard government, overseas development aid maintained an average of 0.33 per cent of gross national income. Since the Howard government was elected to office in 1996, this figure has steadily declined and is now stagnant at 0.25 per cent of gross national income.

If Australia is to meet its target of 0.7 per cent, the real figure of our international aid program would exceed $5.8 billion this financial year, whilst the actual budget figure is only $2.1 billion. This suggests that our aid program is only around a third of what it needs to be in order to meet the targets to which the Howard government is a signatory. If Australia is to meet the set target of 0.7 per cent, the real figure of our contribution specifically to Indonesia would be exceeding $440 million annually, compared to the current $160 million per year. Thus, if we were meeting our international obligations, we would be giving an additional $400 million over five years to Indonesia, and that is without even considering our response to the tsunami assistance. Even dismissing the aforementioned concerns about the tsunami aid package, the Australian government is still delivering well below its own stipulated aim of 0.7 per cent of gross national income to the tune of $400 million over five years to Indonesia, disregarding the tsunami.

Research has been done by the non-government organisation AID/WATCH that clearly illustrates that a significant amount of money that is designated as aid returns to Australia via what is described as the ‘boomerang effect’. This is where aid money ends up in the pockets of Australian business due to a policy of giving Australian aid dollars in contracts only to Australian and New Zealand contractors. Kerry Packer has a company called GRM International that last financial year was engaged in managing $195 million of AusAID projects. It is difficult to put forward an argument that giving aid to Australia’s richest man equates to poverty alleviation.

In December 2004 the foreign minister announced a change in his policy—and it was due partly to pressure from the Papua New Guinean government and organisations like AID/WATCH—so that companies in aid recipient countries will now be able to bid for Australian aid contracts. This recent untying of aid to recipient countries should be commended, but the foreign minister has missed an opportunity to tackle the issue effectively. In regard to the aim of sustainable development, more needs to be done to ensure that recipient countries can get access to these aid contracts. We need to do things such as building capacity within the local countries to enable companies and NGOs to undertake the complex tendering process and to ensure they are able to carry out AusAID contracts.

The minister’s statement, as I said earlier, focuses on Australia’s involvement in security operations in the Solomons, PNG, the Philippines and Indonesia, as well as governance in general, and it presents this as an essential part of protecting Australia’s national interest. Yet the statement is weak on what measures Australia is taking to ensure poverty alleviation in the area. It contains no clear policy statement, no initiatives and no new thinking on how to ensure development aid does its most essential job—that is, reducing the number of people living in poverty.

The question then arises: are Australia’s new security commitments coming at the expense of robust poverty alleviation measures? Certainly, the OECD seems to think so. In the report mentioned by the minister, the Development Assistance Committee states that Australia is not doing enough to ensure poverty alleviation and is focusing too heavily on Australia’s national interest in its aid program by focusing on security and governance issues. The report talks about the need for—and I quote:

… a strengthened poverty focus ... Australian programming should give greater prominence to poverty reduction ... The relationship between poverty reduction and governance, security and the whole of government approach should be reflected in future policy statements and the poverty reduction focus should be followed through more consistently in implementation, monitoring and evaluation.

The minister’s statement makes little mention of the Millennium Development Goals or of how Australian aid programs contribute to meeting these goals. The OECD criticised the government on this point also, saying:

The MDGs are currently not used as an internationally agreed framework for the (Australian) programme within which development actions can be designed and monitored.

Instead of treating it as an either/or contest, the government should be boosting its emphasis and programming resources on poverty alleviation, in recognition that poverty and underdevelopment are major underlying causes of insecurity.

The minister’s statement holds up economic growth as the solution to poverty, but never asks the question: what sort of growth is required? Instead, it presumes that private sector led, export driven growth is the only option. Mechanisms for ensuring forms of growth and development that do more to address poverty alleviation are not seriously considered in the statement. Examples of such forms could include land reform, micro-credit, education for girls and community development programs—none of which are mentioned in the statement.

The statement also lacks any recognition that private sector led growth can make conditions worse for people in developing countries. For example, efforts to strengthen property rights for land in Papua New Guinea, where much land is communally owned, will have the likely effect of impoverishing subsistence farmers and forcing them off the land. Pressure for export earnings can put extra strain on scarce natural resources, leading to major problems of deforestation, as we see in Papua New Guinea.

The minister makes specific mention of a World Bank report on global agricultural trade to bolster his advocacy of full global agricultural trade liberalisation. But a more detailed reading of the World Bank report shows the opposite to be true. Page 123 of the report states, ‘Full food trade liberalisation would be of only marginal benefit to developing countries.’ It states a figure in the order of $10 billion to $12 billion. The report goes on to say, ‘Rather, the scenario most advantageous— (Time expired)