Budget documents released on Tuesday outlined a 40 per cent cut to Indonesia, formerly Australia’s largest foreign aid recipient.
The country is set to receive $323 million in funding, a cut of $219 million from the previous year.
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The cuts follow increasingly tense relations between Indonesia and Australia over the execution of two Australian drug smugglers, but Treasurer Joe Hockey has ruled out any relation.
Mr Hockey told SBS that the cuts were not payback for the deaths of Andrew Chan and Myuran Sukumaran, who were executed by firing squad last month.
“We are not going to continue to give huge lifts of aid money to countries that then go and give aid to other countries,” he said.
“So what we’re doing is, looking at their economy, the size of their economy. If they have aid programmes, particularly where it goes, and making sure they’re in our region. And that’s perfectly reasonable.”
But the cuts have been criticised by aid groups, who have accused the Abbott Government of playing politics with aid funding.
AID/WATCH Director Thulsi Narayanasamy said that countries that provide support to Australia’s offshore detention policy and resettlement of refugees have retained their funding, with Papua New Guinea now the largest recipient at $477.3 million.
“Nauru and Cambodia have retained their budgets, with Papua New Guinea seeing only a minor five per cent reduction in aid,” she said.
“This is a demonstration of the use of aid as a bargaining chip to paradoxically support an inherently harmful policy to some of the most marginalised peoples.”
The Greens have also voiced their concerns over the cuts.
Senator Sarah Hanson-Young said the cuts would “dramatically affect” relations between Australia and Indonesia.
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