Budget 2015: What is happening to foreign aid?


While Australia's foreign aid has escaped further cuts in the 2015 federal budget, the largest recipient of Australian aid, Indonesia, has seen its funding cut.

Foreign aid has escaped further cuts in the Abbott Government’s second budget, but some regions have seen their funding cut by hundreds of millions of dollars.

The Indo-Pacific region has become the focus of Australia’s foreign aid, accounting for 90 per cent of spending.

However, the largest recipient – Indonesia – has seen its funding cut by more than $219 million to $323 million.

The cuts follow increasingly tense relations between Indonesia and Australia over the execution of two Australian drug smugglers, but it has been explicitly outlined that the cuts are not related. 

Cambodia has been immune from cuts at $52.4 million, while Papua New Guinea – another country with close ties over asylum seeker policy – has only seen a cut of less than $25 million to $477.3 million.

Africa and the Middle East bore the brunt of funding cuts, allocated $31.8 million in 2015-16 – down from $106 million the year before.

Treasurer Joe Hockey cut $7.9 billion over four years in his first budget last year, followed by a further $3.7 billion in December’s mid-year budget review.

Researchers have said the cuts mark both the largest ever multi-year aid cuts and the largest ever single year cuts, while Organisation for Economic Co-operation and Development (OECD) figures find that 2016 will see the government’s foreign aid spending drop to its lowest levels since records began in 1960.

Foreign Minister Julie Bishop said the government would allocate an estimated $4 billion in Official Development Assistance in 2015-16, which would reflect “the different development and economic trajectories cross the region”.

Ms Bishop said the government would spend $106 million on the Australian Embassy in Baghdad, as well as funding to build a new embassy building in Washington, US.

A total of $98.3 million will also be spent over four years to establish a number of new diplomatic posts in:

  • Puka, Papua New Guinea
  • Doha, Qatar
  • Makassar, Indonesia
  • Phuket, Thailand
  • Ulannbaatar, Mongolia

The government will also increase resources in Houston, US.

Ms Bishop said a $50 million “competitive gender equality fund” will also be established, to strengthen gender equality and women’s empowerment.

Cuts 'undermine stability and security'

The Abbott Government has put lives at risk with the latest cuts to foreign aid, according to World Vision.

"It seems incredible that we should be willing to undermine the stability and security of our own region," CEO Tim Costello said.

Oxfam chief executive Helen Szoke said the cuts would have "real and serious consequences", both in Australia and overseas.

Dr Szoke said the cuts brought Australia to its lowest aid level ever.

"This lose-lose budget will ultimately help no one," she said.

CARE Australia said the cuts have left Australia's aid program on "life support".

"It will take many years for Australia's aid program to recover from the damage that has been inflicted," CEO Julia Newton-Howes said.

"Helping people out of poverty and reducing inequality and injustice are, without question, the most effective ways to strengthen our relationships with our neighbours and foster a safe and prosperous region for all."

Source SBS

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