Foreign aid to be slashed over five years

Almost $8 billion will be wiped from Australia’s foreign aid spending over five years as the Coalition sticks to its election commitment to limit foreign aid expenditure.

(AAP)

 

• $7.9 billion to be axed from future foreign aid
• No growth in spending until 2016
• Decision to join African Development Bank Group and International Fund for Agricultural Development reversed
• Budget 2014: Hockey outlines federal budget
• Charity groups gutted by foreign aid cuts

Funding is set to remain at the current level of $5 billion in both 2014-15 and 2015-16.

Treasurer Joe Hockey said the reduction in growth will save the government $7.9 billion over five years, with the majority of cost cutting impacting on the Department of Foreign Affairs and Trade.

The Department is estimated to save $601 million in 2013-14 through limiting official development assistance and more than $7.6 billion over five years.

Treasury, the Attorney-General’s Department and the Australian Federal Police will also see savings.

The budget also outlined the Abbott Government’s intention to reverse previous decisions to join the African Development Bank Group and the International Fund for Agricultural Development.

The Coalition pledged to limit foreign aid spending growth in line with inflation before of the 2013 federal election, saving $4.5 billion, shortly after Australia recorded its first fall in year on year foreign aid spending in almost a decade.

The new government also absorbed AusAID into the Department of Foreign Affairs and Trade, prompting the resignation of its Director General Peter Baxter.

The budget measures follow a report by the Commission of Audit, which recommended reforming foreign aid and limiting aid growth to "a rate no greater than the rate of inflation".