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The Australian aid budget has been slashed by 20 per cent for the coming financial year, representing the biggest single-year cut in the nation’s history.

May 12, 2015

Budget 2015: What it means for children in our region

Sydney, Australia, 12 May 2015: The Australian aid budget has been slashed by 20 per cent for the coming financial year, representing the biggest single-year cut in the nation’s history.

The Federal Budget tonight confirmed $1bn in cuts, as foreshadowed by the Treasurer back in December.

Despite previous bipartisan commitment for Australia to increase its spending on aid to 0.5 per cent of gross national income (GNI), the Budget papers reveal that Australia’s aid budget will, in fact, fall to 0.22 per cent by 2016-17, making our aid contribution the least generous it has ever been.

While the cuts were expected, ChildFund Australia CEO Nigel Spence said the news is still devastating for children and families in our region and beyond.

“We are deeply disappointed that this devastating cut to Australia’s aid program has gone ahead. This means vital aid projects for the world’s most vulnerable children and families will be drastically scaled back, resulting in less children accessing the basics they need to survive and thrive – clean water, healthcare, education, protection,” said Mr Spence.

“We reject the idea that cuts to aid are necessary to repair the budget or fund domestic programs. Aid spending amounts to just 1 per cent of the Federal Budget. Even wiping out the entire aid program would have little impact on the Budget’s bottom line.

“Only today, Nepal suffered another devastating earthquake, putting already vulnerable children and families at further risk. In a year where Ebola threatened the global health system, where conflicts in Iraq and Syria contributed to record numbers of refugees and where natural disasters affected millions of people, including Australians, it is clear that the challenges facing the world are not confined to national borders. Far from reducing our contribution, we should be increasing our investment to help address these global challenges,” Mr Spence added.

Foreign Minister Julie Bishop has confirmed there will be significant cuts to programs in Southeast Asia, with the exception of Cambodia, which has agreed to resettle refugees who travelled to Australia by boat.

“Cutting aid makes no sense when it is a key pillar of building peace and prosperity in our region, complementary to our investments in diplomacy and defence,” said Mr Spence. “This budget cut will dramatically impact the ability of our regional neighbours to respond to the economic, social and climate challenges they face.

“We feel strongly that decisions about aid should be based on need, not tied to political deals such as where asylum seekers are being housed,” Mr Spence added.

Clarification is still needed on how the cuts will impact non-government aid organisations, including ChildFund Australia, that receive funding through the Australian NGO Cooperation Program (ANCP).

Mr Spence said: “We will meet with DFAT in the coming days to find out exactly what the cuts mean for our affected country programs.”

KEY STATS:

  • $1bn has been cut from the Australian aid budget, representing the biggest single-year cut in the nation’s history.
  • Countries in Southeast Asia have been particularly hard hit losing nearly $450 million.
  • Largest DFAT cuts will be felt in Sub-Saharan Africa (70%) and across Southeast Asia with the Philippines, Indonesia, Myanmar, Vietnam and Laos all being cut by 40%. Post-conflict and conflict affected countries did not escape, with 40% cuts to DFAT ODA in Afghanistan, Pakistan, Sri Lanka and Palestinian Territories.
  • Aid to Small Island Developing States in the Pacific was largely quarantined, as well as aid to Nepal and Cambodia. Aid to Timor-Leste and PNG was also relatively untouched, with approximately 5% cuts.
  • The cuts have significantly shifted our geographic aid priorities. The Pacific is now the top region for Australia’s aid (rather than East Asia) and PNG is now Australia’s largest aid program followed by Indonesia, the Solomon Islands and then Afghanistan.
  • Funding to humanitarian response was largely sustained, which will be vital next year and beyond to help with major disasters like the devastating Nepal earthquakes.
  • ANCP funding to Australian aid agencies will be cut by 5%. How the cut will be administered across the 49 ANCP agencies is not yet clear.

Nigel Spence is available for comment.