Australia's Aid Budget to Increase in 2000-01

Media release

Australian Minister for Foreign Affairs, Alexander Downer

9 May 2000

Australia's Aid Budget to Increase in 2000-01

I am pleased to announce that Australia will provide $1.6 billion as official development assistance (ODA) in 2000-01 — an increase of nearly $100 million over the 1999-2000 Budget figure and a real increase of 4 per cent.

This is a clear demonstration of the importance the Government places on advancing Australia’s national interest by helping developing countries to reduce poverty and achieve sustainable development.

The 2000-01 aid budget will continue to give effect to the directions and principles of the Government’s 1997 policy statement, Better Aid for a Better Future. Australia’s progress in implementing this policy framework received high praise when reviewed recently by the OECD Development Assistance Committee. The review concluded that since 1996, Australia’s aid program has undergone an impressive process of restructuring and renewal, putting Australia in the vanguard of DAC members’ aid management practices.

AID BUDGET HIGHLIGHTS

A commitment of $150 million over the next 4 years ($100 million of which is additional aid budget funding) will help build the foundations of a viable and stable East Timor.

An Asia Recovery and Reform Fund ($6 million), which will complement the support provided through bilateral country programs to assist countries most affected by the aftermath of the financial crisis.

Maintaining Australia’s commitment to help Indonesia in meeting the enormous challenge of implementing political and economic reform, with total flows in 2000-01 of around $120 million.

The new Treaty on Development Cooperation with Papua New Guinea reflects our joint commitment to transparency and accountability in ensuring Australia’s aid effectively meets PNG’s development needs. Funding for PNG in 2000-01 is estimated at $300 million.

As part of our three year $35 million commitment, $11.5 million in 2000-01 towards the IMF/World Bank Heavily Indebted Poor Countries Initiative. Australia’s total contribution to HIPC will be $55 million in nominal terms.

A continuing commitment to helping nations in the Pacific achieve the highest possible level of self-reliance, including with an increase of $1 million to help the Government of the Solomon Islands in its continuing economic reforms and an additional $940,000 (to a total of $15 million) for the Policy and Management Reform program in the Pacific.

A 3.6 per cent increase for non-government organisations through the AusAID NGO Cooperation Program, taking Australia’s contribution to community-based NGO projects in developing countries to $25.2 million in 2000-01.

RESPONDING TO DEVELOPMENT NEEDS

The overseas aid program will maintain its emphasis on the development needs of Australia’s neighbours in Asia and the Pacific and continue to respond to the historic political, economic and social changes occurring in the region.

East Asia

The aid program will continue to focus on assisting regional countries affected by the financial crisis to return to sustained growth and on addressing their long-term needs for poverty reduction and sustainable development. Improved governance will be key to achieving development gains. Assistance provided through bilateral country programs will be complemented by the Asia Recovery and Reform Fund, to help strengthen economic governance and social protection mechanisms. Total flows to East Asia will be $487.6 million.

East Timor

Aid to East Timor will focus on restoring essential services, supporting the establishment of government and administrative structures, rebuilding livelihoods, promoting reconciliation and supporting the development efforts of multilateral organisations such as the United Nations and the World Bank. Funding of $150 million, over the next 4 years, will be phased at $40 million per annum in 2000-01 and 2001-02 and $35 million per annum in 2002-03 and 2003-04.

Indonesia

Indonesia is undergoing a political, economic and social transformation. With total aid flows of around $120 million, Australia will work with Indonesia to help restore welfare gains eroded by the crisis, strengthen poverty alleviation and implement its extensive reform program.

Papua New Guinea

Australia will continue to play a key role in helping PNG address its considerable development needs. This assistance is focussed on the jointly agreed sectors of governance, education, health, infrastructure, renewable resources and assisting the peace process in Bougainville.

Pacific

In the Pacific, Australian aid will focus on helping nations develop the maximum possible degree of self-reliance. Total assistance to Pacific Island nations will increase from $137 million to $145 million, with particular emphasis being placed on supporting economic and public sector reform programs.

Africa, the Middle East and South Asia

Outside Australia’s immediate region, the overseas aid program will focus where appropriate on development needs in southern Africa and the Middle East. In South Asia, the program will concentrate on the needs of the most vulnerable poor. In
2000-01 bilateral aid for Africa and South Asia will be maintained in real terms.
$2.1 million will be provided to the Palestinian Territories — maintaining last year’s commitment. Further assistance is also provided to these regions through NGO, emergency and humanitarian programs.

Humanitarian and Emergency Response

In 1999-2000, Australia’s overseas aid program responded promptly to natural disasters and man-made tragedies in a number of countries, including the floods in Mozambique, the earthquake in Turkey and humanitarian crises in North Korea, the Balkans and the Solomon Islands. Australia will continue to respond generously to such crises as they arise.

Other features of the 2000-01 budget

$5 million to continue the highly successful Australian Youth Ambassadors for Development Program and establish it as an ongoing feature of Australia’s overseas development assistance
An additional $700,000 to volunteer organisations in recognition of the contribution of Australian volunteers
An additional $300,000 for the Direct Aid Program, taking it to $3.3 million, and expanding the ability of Australia’s overseas missions to respond quickly to local, small-scale development needs
A 30 per cent increase to $1.3 million in the Human Rights Fund to expand the capacity of community-based human rights activities
An increase of $490,000 for outreach activities, bringing total funding to
$2.3 million and enabling further outreach activities in rural and regional areas.

Media contacts: Matt Francis (Ministerial) 02 6277 7500

Fionna Douglas (AusAID) 02 6206 4960

Note: The way that the GST affects Budget estimates, accounting statements and appropriations is described in Budget Paper No.4.