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Joint Standing Committee on Foreign Affairs, Defence and Trade
02/07/2018
Strategic effectiveness and outcomes of Australia's aid program in the Indo-Pacific

NUTT, Ms Maree, Chief Executive Officer, RESULTS International Australia

RICE, Mr Mark, Policy and Advocacy Manager, RESULTS International Australia

[15:10]

CHAIR: I now welcome representatives from RESULTS International Australia. It's great to see you once again, Ms Nutt and Mr Rice. Thank you very much for your time today and for your evidence. Any evidence you give is under parliamentary parliamentary privilege. I invite you to give an opening statement or statements followed by questions by the subcommittee.

Ms Nutt : It would be our privilege to give an opening statement. Thank you for the opportunity to do so today. For those on the committee who don't know RESULTS, and I won't presume that everybody does, RESULTS is an advocacy organisation. We do not deliver aid programs. Our advocacy happens at three levels: at the grassroots level with our volunteers; at a staff level; and we also operate as part of a broader global health advocacy partnership called ACTION. So it operates also at an international level. Going back to our volunteers, our constituency base is members of the community interested in Australian aid and interested in how they can contribute to the end of poverty in the world. They're particularly interested in how impactful and effective our aid is for poverty reduction and particularly the achievement of the Sustainable Development Goals by 2030. So this inquiry is very welcomed by us and our members because of its purpose to look at the effectiveness and the outcomes of our aid, which are very much dear to our heart.

Our advocacy is therefore on the aid program broadly and its quantity as well as its quality. We'll probably address elements of the quantity shortly. We choose specific issues to work on within RESULTS. Our rationale is often based on choosing areas of poverty reduction where we see a critical need and sometimes neglect in terms of the global and the national agenda. For example, historically we've focused quite strongly on the issue of tuberculosis, which has suffered from many decades of neglect and has the impact that it has now in terms of millions of deaths every year. But we also choose to focus on areas of poverty reduction where we know that there are solutions and relatively cost-effective solutions. We would like to see the impact of those solutions come to a greater scale. For example, scaling up child immunisation is one of the most cost-effective interventions interventions for poverty reduction. In our evidence we will be able to answer questions on those issues that we particularly focus on. We also focus to a lesser extent on issues around education and microfinance.

This is obviously a very timely inquiry because of the release of the white paper last year. It's also a very timely inquiry because of recent media around the role of China in our region and particularly in the Pacific. In terms of the white paper, I read a well-respected blog from the ANU when the white paper was released. Its author noted that it was disappointing that neither the foreign minister, the trade minister nor the Prime Minister referenced aid in their launch speeches. Yet in RESULT's view aid is very much a very important part of our foreign policy strategy. So we welcome the opportunities that this inquiry provides to elevate the importance of aid within that.

In terms of the investment strategy of China in the Pacific, it raises questions about whether Australia is doing enough in our region. I would say that we have certainly increased our aid in the Pacific since the last white paper—almost doubled, in fact. I think that is a very significant thing to draw from. But RESULTS is very concerned about the downward trend that we are seeing within the aid program over recent years. I believe the statistics, according to the most recent aid budget, are that should those commitments come to be a reality it will be eight consecutive years of real cuts to the aid program. How effective we can be in terms of impact with a shrinking aid program remains to be seen. Notwithstanding that, we welcome the opportunity to highlight some things that we are very effective in. I will hand over to Mark to talk about where we would focus as reflected in our submission.

Mr Rice : I'll just take a few minutes to go through some of the key areas we focused on in the submission, which reflect our priorities and are also relevant to the committee's terms of reference, in the role of the aid program in building influence, as a trusted development partner. We focused on two topics, one of which was actually having a predictable and consistent level of aid. That is something where we have had some problems in recent years. Over the last seven years we've often seen commitments to particular levels of aid, either in aggregate or to different countries, which haven't always been met in practice.

The other area, and this is one where we're involved in a separate briefing to this committee in about six weeks time, is on transition policy. We see that that's an area where Australia can have an influence in two ways. One of them is influencing the eligibility and transition policies of the different multilateral institutions to which we contribute, but also actually having a clear process for transition of countries when they have reached a level of economic and social development where they're going to be less reliant on aid, and how we spell out how we would actually manage that process.

In the role of innovation, we focus on a few areas. One of them is the important work that's already happening and that we'd like to see expanded on innovation in providing improved detection and treatment of infectious diseases and other diseases that haven't necessarily received attention in line with the impact they have. But also there is innovation in financing, because innovation obviously has multiple dimensions. There are a number of multilateral institutions, for example, that are already adopting, in some cases with Australian support, innovative financing practices. We see that as also being a key part of the role of innovation in the aid program.

Another area to focus on briefly, because one of the key terms of reference is on how the aid program has been performing on the stated goal of promoting gender equality and meeting the needs of women and girls, is obviously looking at that on a program-by-program basis and saying that in whatever sector or whatever country a program should definitely highlight the needs of women and girls. We also think there are certain types of programs where, looking at meeting the needs of women which are important. We've highlighted that, for example, in recent years we have seen some decline in the proportion of aid going to health and education. Rebuilding support in those sectors would be a key part of the gender equality agenda. Those are a few things we'd like to highlight. We'd be happy to take questions or enlarge on those points during the hearing.

CHAIR: Thank you very much for your opening statements. Firstly, I'm interested to know how Australia's aid program could better support innovative programs such as the International Finance Facility for Immunisation and the debt-to-health exchanges.

Mr Rice : The International Finance Facility for Immunisation is something that Gavi, the Vaccine Alliance, has introduced, and Australia was, in fact, one of the early supporters of that program, so we are providing funding to that initiative already. Essentially, what that does is allow Gavi to bring forward funding of national immunisation programs. So what they can do is make an initial investment through the issue of bonds, and then the contributions of supporters allow them to repay those bonds over a number of years, so they get a steady flow of revenue from contributors such as Australia. I think we'd see Australia's role now as being where Gavi has new objectives for the use of the program, and I think in our submission we do refer to some new goals that Gavi has for the program, including the scale-up of current vaccines, which has been one area where Gavi perhaps hasn't done as well as it has done in supporting the introduction of new vaccines. That's an area where they could make further use of that mechanism.

Ms Nutt : I will just add that Australia is a very active member of the Gavi board, so we certainly do have an opportunity to influence how the IFFIm is utilised, and that's something that we've always done. When I say 'we', I mean DFAT. The representative from DFAT who sits on that board has always had the opportunity to play and has played a very active role on the Gavi board. So it is certainly within the realms of possibility for Australia, as a member of that board, to influence how those bonds are used.

Senator GALLACHER: Your submission makes the point repeatedly that we should be raising our ODA to 0.5 per cent of GNI within 10 years. In the absence of agreement on that, your recommendations, in particular recommendation 5, which I think you've just touched on, is 'innovative funding for health services such as the International Financing Facility for Immunisation'. Can we put more money into that and get a bigger outcome; is that basically where you're coming from? Would it be like a private equity or a social impact bond? Is investment in there self-generating or does it deplete?

Mr Rice : The first point I'd might make is that we didn't necessarily see that contributions to innovative financing mechanisms were a substitute for increasing overall aid. We saw them perhaps as: if we are increasing, how can we allocate that increase to the maximum advantage?

Senator GALLACHER: So if we were to go to 0.5, these are the areas that you would consider.

Mr Rice : Yes, and on the way we could—

Senator GALLACHER: But what can we do in the absence of agreement to increase the aid? Given that we'll probably have an election in the next 12 months and there's nothing in the budget, what do we do now?

Mr Rice : I think that, while a number of the issues we've highlighted do involve some additional financing, they're not necessarily in themselves hugely expensive. Certainly, with the two areas we highlighted, the International Finance Facility for Immunisation at the moment is costing the Australian aid program about $14½ million per year. If it is to be expanded, it's not going to be a big additional cost. Debt-to-health exchanges are, I think, in the example that Australia did support, which was in an agreement with Indonesia that ran from 2010 to 2016. I think the annual cost to the budget there was $6 million to $7 million. That is counted as official development assistance, even though it's effectively forgoing repayments on a loan rather than actually contributing entirely new money. But the idea, and the benefit, is that, by forgoing payments on a loan, that money can then be reallocated to health programs, and I think it helps to satisfy the accountability criterion, because some people might be concerned about simply writing off part of a loan. But if we can demonstrate that, in doing so, that's going to improve health outcomes, then obviously that's a benefit.

Senator GALLACHER: In the area you have just spoken about, from 2010 to 2016, I think you said it was $67 million over 10 years.

Mr Rice : The total amount was $75 million.

Senator GALLACHER: Are you able to demonstrate the effectiveness of that program? One of the issues that we often encounter is that we will get someone in Aceh or somewhere saying something we violently disagree with. It's not immediately apparent that we can stand up and say, 'Hang on, have you ever thought that this is a demonstrated outcome?'

Mr Rice : One of the things we mentioned in our submission is we are seeking from DFAT some information on any review of the effectiveness of that arrangement. Obviously, in contemplating new arrangements it's important to show what impact the original arrangement had. I guess we can certainly quote in general what the impact of Global Fund supported programs has been in member countries and in Indonesia. We'd have to check on how their Indonesia portfolio is performing, but overall I think it's been performing fairly well. We would need to find some information on how that element of the program was performing in particular.

Ms Nutt : If I could add that the benefit of a debt-to-health agreement—well, the Global Fund to Fight Aids, TB and Malaria is, in results mind, a very effective mechanism for delivering Australian aid effectively and it is a very transparent mechanism as well. If you go on the Global Fund's website, you can virtually see country by country how many bed nets, how many TB treatments et cetera. In relation to the money that we put into the Global Fund, I think the statistic is that for every dollar Australia invests in the Global Fund at least $10 to $15 comes back into the region. But we don't get to say which country that money goes into. With a debt-to-health agreement with the Global Fund you get to actually specify the country that that money goes to because that is the country you're having that debt-to-health agreement with. So that's an advantage. You can, as a donor country, specify. In the case of Indonesia $37½ million of Indonesia's money went into tuberculosis funded programs that were overseen by the Global Fund. Indonesia has one in 10 cases of TB in the world, so a very high burden of TB. So it was a very important and effective way to do it. I think what we're suggesting is that we could go back and get some specific information from the Global Fund on the impact of that agreement and encourage the government to look for other opportunities to earmark some Global Fund money into countries in our region, which would be on top of our commitment to the Global Fund's overall bucket.

Senator GALLACHER: Finally, can you explain recommendations 2 and 3, where you refer to 'a more flexible approach to country eligibility and transition'. What does all that mean? I can read it a number of times, but it would be best if you could succinctly tell me.

Mr Rice : This is a big topic, both for us and our international partners. What it reflects, when you look at eligibility and transition, is most national aid agencies and multilateral agencies have policies for eligibility, and they do that for a good reason—they want to make sure that the funding they're providing is going to the countries and people most in need. In many cases they assess need on a country per capita income basis, so countries are classified as being low income or middle income or high income. Many bilateral donors and multilateral agencies give priority to low-income countries and, to a lesser extent, to the countries in the lower part of the middle-income bracket. Because the different donor countries and institutions use similar criteria, that can mean that one country can face the exit of multiple international funding agencies within a three- to five-year period. I think we've seen a few countries in our region that either have faced or are facing that situation. When simultaneous transition, as that process is called, happens it means a country can lose a sizable proportion of its international funding at one time.

Senator GALLACHER: And the work's not finished; it's just that the rich have got richer.

Mr Rice : It depends on the circumstances. To use a couple of countries in our region as an example, Papua New Guinea and Timor-Leste, they're both countries that are classified as lower middle-income countries mostly because they have, and have developed to some extent, natural resources wealth. But if you look at their social indicators—the number of children who finish school, their immunisation rates, their nutrition levels—they actually resemble in some ways some of the poorest countries. That means they are about to go through or may be going through the process of transition to reduce support because on paper they seem to be wealthy enough. For example, last December Gavi, the Vaccine Alliance, basically because this is what the Papua New Guinea government wanted, decided to transition from its grant support for vaccines to Papua New Guinea by 2021, even though they admitted and had assembled quite a bit of evidence to show that Papua New Guinea's health system still has a fairly low level of resourcing and inconsistent reach to different parts of the population, and it doesn't have a very high or consistent vaccination rate. I think they still decided to go through the transition process partly based on income and partly based on commitments by the government of Papua New Guinea that they were going to make the health sector and immunisation a higher priority.

What we're suggesting is that Australia's role here is in two areas. As Maree was saying earlier, one area is that in a number of these international institutions Australia is a fairly active board member and has often already spoken in favour of taking into account factors in addition to per capita income in deciding when countries are eligible. The other area is that Australia is also a country that provides bilateral assistance. If you look at the countries to which Australia provides most of its bilateral assistance, they tend to fit into the lower middle-income countries. They're countries that are going through, or are likely to go through in the near future, transition to reduced support from other institutions. We can, in the short term, provide increased assistance while they're receiving reduced assistance from other people, but also we can assist and help those countries to get ready for the longer term, when they'll also be receiving a lower level of assistance from Australia.

Senator GALLACHER: We've had it put more bluntly in evidence, at least to the Senate committee that did an inquiry into foreign aid to Papua New Guinea. We struggled to find an effective program. We struggled to find anything that had a demonstrated long-term outcome. In fact, the disconnect between the federal health system and the district health system was not contributing to any success at all.

Mr Rice : One of the programs that we've obviously taken quite a strong interest in is the tuberculosis program. Australia's funding contribution, as of last year, was being matched by the World Bank. We did note recently there was an article by the Lowy Institute that said that program in itself is starting to yield results. But the article also had a warning that it's difficult to sustain the benefits of a TB program if the overall health system is still poor, ill-resourced and not necessarily well coordinated.

Senator MOORE: Thank you, as always, to RESULTS. I'm interested that you've actually put the 0.5 figure there rather than the 0.7. As you know, everyone is wanting 0.7. Can you explain to me why you've given us this kind of staged 'if you get 0.5'? Is there a reason why you've done that?

Mr Rice : I think we've always seen in the target of 0.5 per cent—

Senator MOORE: Which we used to have.

Mr Rice : As an objective, it actually has quite a long history. This probably tells you how long I've been involved in advocacy on the aid program, but I remember in 1989 the Joint Standing Committee on Foreign Affairs, Defence and Trade had a recommendation that Australia increased its aid to 0.5 per cent of GNP—I think GNP was the terminology in those days—within four years. So it's obviously been a commitment that has had longstanding support. But it's mostly been as an interim step towards getting to 0.7. I think we're not necessarily saying 0.7 per cent is no longer an objective, but we're looking at a 10-year time frame, which is in itself quite a lengthy period. What could be achievable in that period? When we say 'achievable' it obviously would require a significant level of commitment and a significant turnaround from the recent trend in resourcing. I think it's a rate of growth that we could sustain whilst also maintaining or improving aid quality, looking at what that is as a dollar amount and what it could deliver. I think going to 0.5 per cent within 10 years would be both a big commitment and something which could make a big difference if that additional funding is well targeted.

Senator MOORE: I'm also interested to know how you see the health security initiative that the government announced last year, with particular focus on our region. TB is the work you do most and it is such a major element of the security issues for our country. I'm interested to see how you assess that investment and where some of the issues you've raised in your paper today would be able to be implemented through the effective maintenance of the health security initiative.

Ms Nutt : One of the things we were most interested in in that commitment was the commitment to product development partnerships.

Senator MOORE: Which is a completely new area, which is very exciting.

Ms Nutt : Yes. Whilst we have made funding commitments to these PDPs in the past, the $75 million was a significant commitment and we welcomed the longer-term commitment that that provided. The first time we committed two research mechanisms for better drugs and diagnostics for TB and vaccines at that time, it was a one-year commitment, which is not very long in terms of painstaking research. The next commitment was three years, and this is a five-year commitment.

Senator MOORE: And it's built in that way.

Ms Nutt : We welcome that it is providing much more secure funding. But as we have been doing some significant work with international colleagues leading up to a very important UN high-level meeting on tuberculosis in September this year, the global funding gap for research into better tools to combat TB is about $1.3 billion annually. Currently, globally, donors and donor agencies are investing US$700 million a year. So whilst we welcome the commitment, we still will have a funding gap. Form the PDP's perspective, we welcome it. It is a very modest increase in their annual funding from the previous commitment and it will fall short of what Australia probably should be doing if we are to actually generate these much-needed tools in reasonably short space of time.

In terms of the other elements of the regional health security initiative, I understand that there is at least $100 million that is currently not earmarked for anything, so we are interested in what investments could be made with that. We've been coming up with our own ideas for that. I understand that there are other elements—I'm going to paraphrase badly here—like having some of our youngest and brightest go into the region and help with building up capacity. Overall, I think it is important. Obviously, also, the focus on drug-resistant malaria is really critical. Mark, do you have anything to add?

Mr Rice : We had a meeting with several of the DFAT staff from the Indo-Pacific Centre for Health Security. They've provided some extra detail. I would imagine that the committee will also be speaking to DFAT to obtain some further information on the program overall.

Senator MOORE: There's not much around.

Mr Rice : One of the other initiatives is also about speeding up or at least facilitating the process for approval of new drugs that are effective, and that's where the Therapeutic Goods Administration in Australia is collaborating with some of its counterparts in the region. Also DFAT at the moment has some of its I think key consultants carrying out consultations with countries in both the South-East Asia and Pacific regions on what some of their specific health needs are. That is obviously in line with one of our other recommendations, which is ensuring that our assistance is meeting the needs of individual countries. I think they're going to make recommendations on two regional initiatives in health security which might not be in the research and development field but could have a research and development component. They're also about improving how the health systems operate in the community. That will also be important. I think it's certainly worth obtaining further details on that, because not all of the $300 million has been committed yet.

Senator MOORE: There is also the perception that health and health programs should increasingly be the responsibility of domestic governments. That's one of the earmarked areas in our policy. We're trying to build capacity so that it's clear who is responsible for what. That's where the tension sometimes hits, such as the recent experience, which I have talked to you about, with the lack of medication in the PNG system. Australia have an arrangement where we provide funding in some areas of health but the provision of medication is clearly a domestic PNG responsibility. That's where you just don't know where to turn. You can build hospitals and train people, but, if there are no drugs available to provide treatment, how effective is it? Certainly in the TB space that's critical. If you've got people who are ill or mid treatment, you need that treatment to continue. A delay or a stoppage in that treatment is quite serious.

Ms Nutt : I'm happy to share this yet to be finalised RESULTS's proposal. With the high-level meeting on tuberculosis coming up in September—

Senator MOORE: It's enormously important, isn't it, in terms of the focus?

Ms Nutt : Enormously important. We'll be calling on heads of government and state to attend. It's not a health ministers nor a finance ministers meeting. It's really targeted at the highest level. We are hoping for and are encouraging very strong quantitative commitments by global leaders to come out in terms of access to diagnostics and treatment as well as funding. RESULTS would like to see Australia seriously consider what its role in the region is in helping the region address tuberculosis as a regional health security threat. We will have countries commit to goals at this high-level meeting in September alongside the UN General Assembly, but how do governments help each other stay accountable for those commitments? Is that a relatively small role for the regional health security initiative to play in the Pacific? We know that Papua New Guinea has high rates of drug-resistant TB, but it's not a well-known fact that there are Pacific island nations that have small numbers but, for their population, high rates of tuberculosis. When we gather with our Pacific island country partners is there a role for Australia to say: 'We've all made these commitments to this declaration from the high-level meeting. How are we going to keep those commitments? Are we going to keep ourselves accountable to them?' I actually think that that is something that Australia can play a role in, and maybe it's a role for this regional health security initiative to explore.

Senator MOORE: And perhaps a Pacific forum where countries come together and make that combined commitment with clear evidence of where the issues are. That's very useful, thank you.

Ms CLAYDON: Thank you for your evidence. It's always good to have RESULTS presenting at these committees, so thank you. A lot of time goes into these submissions. It's a laborious task. I just want to acknowledge that. I think you, Mark, made reference to when we were in discussions around the debt to health agreements. Noting that the six-year period of our agreement with Indonesia has now passed, and you're yet to get a response from DFAT—I'm trying to drill down—have you formally asked DFAT what have been the benefits of that initiative, the analysis work done there or is it something you were expecting to have by now? I'm trying to figure out where it's up to.

Mr Rice : We haven't formally requested the details from DFAT. I think at one point we had suggested to one of the members of the Senate estimates committee perhaps raising it as a question a few years ago when the program was coming to a conclusion. It's one of those factors where we probably hadn't given it a lot of emphasis up until last year, because the general field of debt to health exchanges had been fairly dormant. We'd had the early agreements, which Germany and Australia had reached with Indonesia but then little action was taking place on that front. Then last year Spain reached an agreement with three countries in Africa to convert debt into health programs, which is, obviously, a renewed interest in the field.

I think the other factor, which we believe could be renewing interest in the field, is that the new executive director of the Global Fund, Peter Sands, has a finance background, so we imagine he would be interested in renewing interest in these programs. We haven't had formal discussions or put any question in writing to DFAT recently saying, 'Can you explain to us what the benefits of the debt to health exchange was?' Sometimes with DFAT what we have found is—especially if in the period when a program started and when it concludes, for example, there'd been a change of government or a change of ministers—that sometimes they tend to treat that as being something that happened in the past. But, certainly, we can follow-up with the department on what—

Ms CLAYDON: That's alright. I intend the committee to do so. I just wanted to know where you were up to with it. Given our terms of reference, it seems an important question for us to put around what were the known benefits of that initiative? It went for six years. What the hell happened? Is it worth exploring options? Are there other opportunities to do such programs with other nations down that track? I'm sure DFAT is taking some notes on this, but I will be asking the committee to follow that up. Will DFAT be presenting again?

CHAIR: They did the other day—

Ms CLAYDON: Probably towards the conclusion?

CHAIR: It's likely we'll get them in again.

Ms CLAYDON: We might give DFAT notice, but that would be one of the questions that we will seek to explore a little further. I know you've set a specific target for what Australia should be moving towards in terms of our overseas development assistance. I wanted to ask you, as an advocacy group, about the Lowy Institute's work around how perceptions of our aid contribution and their reality are worlds apart. You're an advocacy group working in this space—not necessarily informing every Australian citizen but you have these multilayered, grassroots operations and then moving into the national and the international—how do you think we tackle this widening gap, I would suggest, between perception and reality around overseas development assistance in Australia?

Ms Nutt : Is it a question of how we are or what should we be doing?

Ms CLAYDON: What should we be doing, because I'm happy to accept your comment on what is happening now but it appears to me that the gap between perception is actually growing. People have this incredibly inflated sense of how much money we are delivering—

CHAIR: Particularly as Lowy, in its former surveys, said that if you say $4.2 billion, it actually sounds like a lot—it is a lot—but if you say 0.34 or another percentage, and can compare it with other OECD countries then it can be seen to be a lower amount, so it depends on what you use.

Senator GALLACHER: It's a huge amount of money; don't worry about that—4.3 is a huge amount of money!

CHAIR: People have the perception, when you say $4.3 billion, that is a lot more but when you say 0.34 or whatever the amount is—

Ms CLAYDON: The truth is, we are plummeting to the lowest contribution ever in history as we speak.

CHAIR: It depends on the amount of GDP as well.

Ms Nutt : It's an interesting question which I heard debated in a meeting in Parliament House just last week. We are trying to do as much as we can to inform the public of the reality as an individual organisation but also as members of a coalition of organisations working in the sector and a similar coalition of faith-based organisations working in international development. We are trying to get that message across to people as much as we can through the normal channels of social media, media, one-on-one conversations and things like that. But my personal view is that I don't see that our political leaders need to wait for permission from the public, who, at this time, I think, from that survey, are not well informed. But there are plenty of opportunities for our political leaders to be well-informed and to make the right decisions around the aid program in terms of increasing it. There are examples of political leaders in other countries who have done that. If it is the right thing to do and we can afford it—I would say yes to both of those statements—then I think it is the responsibility of our leaders to make the decision and not necessarily do that because the community have told them it's okay, if the community doesn't have all of the information to make an informed decision. That's my personal view.

CHAIR: Do you think there is a role for us and others combining with other aid advocacy organisations to give awareness to the Australian public of what our current contribution is and how that compares with other developed countries so then people can make informed decision when they are talking to their parliamentarians and advocating for what the aid level should be? I often get lots of emails asking: why are we giving more and more to aid? And please reduce it because we wish you would spend more on health and education here locally. I still get a lot of those emails to this day so there is a perception out there that it is really big and seems to be increasing. When you say $4.2 billion, it does seem a lot but, when you say percentage of GDP, it doesn't sound like a lot—well, it isn't a lot comparatively.

Mr Rice : We already do some advocacy in partnership with other organisations. There are two components to that. One of them is putting the dollar amount that we contribute into perspective but also highlighting what that money is actually doing. When we look at the gap between perception and reality, it has got two parts. One is how much we give but also what are we giving you or what is it achieving. Often what people think aid is doing and what it should be doing and what is actually is funded through the aid program can be different. I did see a small encouraging signs that the Australian aid program summary, the budget paper that came out recently, did in its opening segment have a section which said what we do with our aid and why we give aid. I think it was an attempt to have a plain language explanation of why Australia gives aid and how much we are giving.

But I guess there is another side to that and that is bringing the public along with increasing the aid program, which is obviously important. That is that if the government are saying aid does a lot of good, but people don't see the government backing that statement up with at least some increase in resources, then they're thinking, 'Do they really believe it?'

So I think that there are probably two simultaneous tracks there. One of them is the public education side, saying that in fact the aid program is less than one per cent of the federal budget at the moment. One of the things we were discussing in preparation for today's session was that even our large future target of 0.5 per cent of GNI would be two per cent of the federal budget, so it's still a relatively low share. But apart from educating people on where the aid fits in from that perspective—and also the perspective of comparing it to what other countries are contributing—it's also looking at this: if that public education is combined with some increase in resources and we can point to positive impacts from that increase in resources then that's going to build up momentum for sustained increases and sustained public support for them.

Senator GALLACHER: We may need to stop calling it aid and call it a regional medical fund, a regional infrastructure fund or development funds, because every time you say 'aid' people think, 'If I give you a hand, I'm not going to do it three times if you don't get up.' In New Guinea we've spent $5 million over the last 10 years, and we have declining world development indicators. This is a real challenge. If we keep calling it aid, some people are saying, 'Well'—

CHAIR: Do you think we should change the name of our aid program and no longer call it aid? We used to call it development assistance. Some other countries, like China, call it other things.

Ms CLAYDON: The Brits call it ODA now—overseas development assistance.

CHAIR: But we still call it aid.

Senator MOORE: Everybody in the community calls it aid. That's true. It's like people still getting child endowment—that perception.

CHAIR: Do you believe that the use of that word 'aid' has put up some negative connotations in the public realm and that the word needs to be changed or brought out of the public discourse and other words promoted in its place?

Ms Nutt : I think we probably need the marketing and media gurus to answer that question with authority, but I know that, as a coalition of agencies working to build community awareness and support, we tried to remove the words 'overseas' and 'foreign' from prefacing the word 'aid' and have the word be 'Australian' so that we could feel proud of what we do. I think part of the importance of the dialogue is to have the community feel proud of what we do.

CHAIR: I guess connotations and meanings of words change over time. We used to say 'the Third World', and then we moved to 'developing'.

Ms Nutt : Yes.

CHAIR: Now there's a push to move away from 'developing' as well. So words and meanings change over time.

Senator GALLACHER: There's an element of self-preservation in the work you do on tuberculosis. It's so close to us. Do we need it here? No, we don't.

Ms Nutt : No.

Senator GALLACHER: So we shouldn't pretend it's aid for someone over there. It might be a regional medical program that is entirely beneficial to Australia and protects Australians in the same way as Defence does.

Mr Rice : I think it goes back to why government spends money on particular programs. To some degree, we're giving aid to a lot of different sectors of the society and the economy in one way or another, whether that's social security—and there's often been a debate about what to call social security benefits or programs as well—or education and health. Ultimately they're making sure that those vital services are affordable to people who might not be able to provide for them from their own resources otherwise. Even industry assistance, which I think is currently about two per cent of the federal budget, is a form of aid, although it's also meant to be contingent on those industries becoming self-sustaining and achieving results. Ultimately there are a lot of things and a lot of people that are receiving assistance of one sort or another. I think that the more common global term is 'development cooperation'. I think now that, with Indonesia, DFAT is referring to an economic partnership, for example. Terms like that can be useful in that, as we mentioned in our submission, the relationship that we have with the countries to which Australia provides development assistance is not dominated, or shouldn't necessarily be dominated, by the fact that we provide them with official development assistance. It's one component of an overall relationship. These are countries that are trading partners, and they're often countries that we have common interests with in international negotiations on a range of issues. We have cultural links, because, in many cases, there are a significant number of people who are originally from those countries who have migrated to Australia or have their families in this country. Our relationship is multidimensional. If there's a problem it's if we use the fact that we provide aid as being the dominant or defining part of that relationship. That doesn't mean we shouldn't provide aid, but it's just a matter of how that fits into the overall relationship we have with that country.

CHAIR: Do you think there's an argument for locating or placing some of our development assistance under the Defence portfolio, given that there is often a reluctance to decrease defence expenditure in terms of the overall percentage of GDP—and often there is an increase—which is almost the opposite of what has occurred in our aid program, particularly in terms of looking at some of the defence and strategic elements of aid? Do you think that would then, potentially, result in a situation where you might have increased funding for aid in, at least, some part of the aid program, which would then feed into the overall aid program altogether? That is not the only incentive for aid; I'm just interested in your view on that.

Ms Nutt : I am a little bit nervous about that idea, I have to say. I'm nervous because of what I'm starting to see play out in terms of AusAID being consumed by DFAT. I would be concerned, but I understand where you might be coming from in terms of protecting the funding, and that's not to discount the role that our forces have played in terms of emergency relief.

CHAIR: Particularly, for example, when you look at linking aid to trade, in terms of what we're doing there, and also linking the strategic benefits that the aid program can sometimes play in the Solomon Islands and elsewhere.

Ms Nutt : Yes.

Mr Rice : Obviously there are multiple agencies that are, in one way or another, involved in the delivery of aid and sometimes even involved in the design of programs. We wouldn't rule out a role for the Department of Defence in that area, but it's still important to have one coordinating body that sets the objective, and that's—

CHAIR: It would not be eliminating a coordinating body, but having a program within Defence relating to development assistance, particularly a program relating to strategic development assistance.

Ms Nutt : We might take that on notice.

CHAIR: I'm happy for you to take it on notice.

Mr Rice : I think that's one we might need to look at further.

Ms CLAYDON: I want to add that we took evidence earlier this morning that really warned us around having a very narrow focus on a whole bunch of health issues limited to a security kind of framework. There are a few people who have made comments around not wanting us to limit the capacity and the view. There's a whole range of work that goes on in aid and development that's pretty hard to cram in through another defence or security framework. One thing I want your comment on—because we have had a bit of evidence around, notwithstanding the fabulous work of the Global Fund, its incapacity to work in the Pacific region—is: what's the role of government? Maybe take it on notice, because we need to go. I am interested in how that seems to be quite a significant gap.

Ms Nutt : Are you talking about health systems strengthening more—?

Ms CLAYDON: Sexual reproductive—Family Planning NSW gave us evidence this morning, as did the Australian Federation of AIDS Organisations, about not being able to do their work via the Global Fund in the Pacific, because there just isn't the critical mass that is required. It's about numbers, really, and population basis.

Mr Rice : We'll have a look at what the Global Fund is doing in the Pacific, because I know, certainly, they're quite active in Papua New Guinea, for example, which is a larger country compared with the others. I know they support programs in some other countries in the Pacific which have small populations. The multilaterals, in general, are starting to adopt criteria that are friendlier towards the Pacific. Even the World Bank now has a larger-minimum country program, which means they can give a little more attention to the Pacific. Probably the Australian office and our executive directors at the World Bank have been influential on that change. We'll certainly look at what the Global Fund is doing in the region.

Ms CLAYDON: If you could take that on notice and give some examples that would be great.

CHAIR: Thank you very much for your evidence today. You will be sent a copy of the transcript of your evidence for review. This concludes today's public hearing, and I thank all witnesses for their evidence today. If you've been asked to provide further information or would like to provide further information to the subcommittee please contact the secretariat.

Committee adjourned at 16:05