Indonesia, Africa set to be hit in aid cut

Australian diplomatic posts have reportedly been asked to prepare both 40 per cent and 20 per cent foreign aid budget cut scenarios.

Indonesia and African countries are likely to be the biggest losers from Australian aid cuts in the Abbott government's second budget.

Treasurer Joe Hockey has ruled out a third swing of the axe at aid, but that's bringing little consolation to charities reeling from last year's double whammy.

In his first budget Mr Hockey sliced $7.6 billion over five years, overturning Labor's commitment to peg aid spending at 0.5 per cent of national income.

There was a second sting in December when the mid-year budget review took another $3.7 billion over four years, including an unprecedented $1 billion cut for the 2015/16 financial year.

Foreign aid is an easy savings target for government because adjustments don't need parliamentary approval.

The Department of Foreign Affairs and Trade is developing aid investment plans for all country programs by July.

It is understood diplomatic posts have been asked to prepare both 40 per cent and 20 per cent aid cut scenarios.

The government has been clear it wants the program to prioritise the Asia-Pacific region but even that won't be immune from the cuts.

The executions of Australian drug smugglers Andrew Chan and Myuran Sukumaran has fuelled speculation the government might use a cut in aid to Indonesia as retaliation.

But many were predicting a cut even before the executions.

Australian National University expert Stephen Howes believes it is inevitable Indonesia will be hit because it is the largest recipient of Australian aid - $605.3 million last year.

He expects the Indonesian cut could be magnified because the government may be reluctant to reduce aid to Papua New Guinea, the second-largest aid recipient, as a result of arrangements for the offshore processing of asylum seekers.

Nauru, which also hosts a detention centre, and Cambodia, which will resettle refugees, are likely to be safeguarded as well.

But there are strong indications aid projects based in Africa will be "gutted", apart from those related to passing on mining expertise.


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Source: AAP


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