Foreign Aid

2 December 2021

Many Australians agree that we have an obligation to support less-developed countries. Some see this as a moral duty to help those less fortunate than ourselves. Others see it as a foreign policy tool to help build our reputation and support in international institutions. And some see it as pragmatic, a way to have a safer, more prosperous region. Whatever the motivation, many understand the importance of international development.

This year Australia will have spent over $4½ billion on foreign aid. It sounds like a lot but it is a cut of almost half in real terms from a decade ago, and it is nowhere near enough. Given how little we spend, we must ensure money is being used effectively, that we are getting the most bang for our buck. There are questions about whether this is the case. An example is tied spending. The government formally ended this practice, where aid money goes directly to large Australian organisations. This approach helped Australian businesses but did little to help poor countries. It was alarming to read a report from the European Network on Debt and Development which found that tying may be dead but 95 per cent of our aid spending still goes to Australian organisations. How can we believe our foreign aid spending is doing as much as it can when it is flowing not to the less-developed countries but to a bunch of offices clustered around Parliament House? We surely can do better than this, and we must do better than this.

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