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Government must rethink flawed aid/debt policy.

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Senator Kerry Nettle Senator for New South Wales

Government must rethink flawed aid/debt policy

18th January 2005

Australia urgently needs to review its foreign debt and aid policies with a view to providing quality aid and genuine debt relief, rather than more debt and poorly targeted aid dollars as found in the Government's tsunami package. Senator Nettle said today.

"The Greens call on the government to rethink its aid and foreign debt policies to meet the standards set by the UN Millennium Project including the cancellation of foreign debt to the poorest countries and the opening of aid project tenders to local businesses," Senator Nettle said.

Senator Nettle's comments come in light of today's call by the UN for rich nations like Australia to increase their aid budgets to the UN's Millennium Project target of 0.7% of GDP.

"The tsunami aid proposal announced by Prime Minister John Howard, whilst at first glance appearing generous, comes in the context of a poor overseas aid policy that sees a large amount of aid dollars making profits for Australian companies that should be benefiting local projects on the ground."

Australian aid to tsunami relief projects is to be given exclusively to Australian and New Zealand companies with half the money spent on these contracts to be repayable by the affected countries, particularly Indonesia.

"We need to be looking at the quality of our overseas aid not simply the quantity," Senator Nettle said.

"Providing big loans is a failed policy of the past that hampers economic development in poor countries. Tendering processes that cut out local businesses clearly limit the effectiveness of the Aid dollar.

"Australia can be rightly proud at the generosity of private donations but can also question the generosity of a government that has refused to back debt relief for countries affected by the Tsunami and has given half their Aid in the form of loans.

"Indonesia already owes Australia over $1 billion to add another $500 million to this burden is not the kind of generosity the Australian people expect.

"The Greens will be raising these issues when the legislation to appropriate funds for this Aid package comes into parliament early this year."

Contact Jon Edwards - 0428 213 146