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Labor's hypocrisy on foreign debt relief.

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AA 07 39 28 May 2007

Labor's Hypocrisy on Foreign Debt Relief

The Labor Party is hypocritical for claiming Australia's debt relief shouldn't be included as part of our total foreign aid budget when its own leader has been supporting our efforts to boost aid.

Parliamentary Secretary to the Minister for Foreign Affairs, Greg Hunt, said the comments from Labor's Bob McMullan contradicted those of his own leader.

'Less than three months ago, Kevin Rudd claimed that Australia should be a more proactive supporter of debt relief,' Mr Hunt said.*

'Mr Rudd knows that clearing away a struggling country's debt burden helps it to allocate more resources into essential services like clean water projects, medicines and education.

'That's why the Howard Government paid off Labor's $96 billion debt. It has saved Australian taxpayers more than $8 billion a year for vital areas such as hospitals, schools and tax cuts.

'Iraq's people are also benefiting from reduced debt. Iraq's massive and unsustainable debt burden led Paris Club members in 2004 to agree to provide debt relief to assist the Iraqi Government deal with its significant development challenges. We have agreed to forgive 80% of the over $1 billion in debt Iraq owed Australia.

'Moreover increases in the 2007-08 Budget to aid delivered by AusAID, a nominal increase of over $540 million (around 25%) mean more money to support hospitals, schools and maternal health care which will help families and development in our region.

'And it's not just Australia that is doing this. Australia, along with 16 other developed countries, including Canada, Sweden, Norway, Denmark, Japan, UK and the US last year provided more than $25 billion in debt relief.

'Internationally, debt relief is accepted as a key part of aid because it enables countries to direct spending to essential goods and services rather than to burdensome interest repayments.'

Mr Hunt said this year's budget result for the aid program was well received by groups who closely monitor development issues such as the Australian Council for International Development and non-Government organisation such as World Vision and Care Australia.

'By contrast, the AID/ WATCH position is extraordinary, given it previously

demanded greater debt relief by Australia.'**

Australia is on course to invest $4.3 billion in foreign aid by 2010-11.

* Speech to the Global Foundation, 8 March 2007.

** AID/ WATCH says 'No Debt' to the World Bank and Australian Government on World Debt Day, 16 May 2006

Media contact: John Deller (Mr Hunt's office) on 0400 496 596