I am pleased to advise that the Government will maintain its commitment to increase Australia's aid program.

In 2012-13, Australia's aid program will increase by approximately $315 million.

This will take Australia's Official Development Assistance (ODA) to approximately $5.2 billion up from approximately $4.9 billion this year.

This is an increase in nominal terms of 6.0% on last year's total aid budget and comes against a backdrop of declining Commonwealth Revenues. These are estimated to be down $5 billion next year (2012-13) and a further $5 billion the year after (2013-14).

The increase in aid ensures our ODA to GNI ratio will be maintained at 0.35% for one year only – the highest ratio since 1985-86.

It will then increase year on year to reach 0.5% of GNI by 2016/17.

This decision will save the Government $2.9 billion over the forward estimates.

I can assure you that this decision has not been taken lightly.

It comes at a time when all areas of Government spending have been reviewed.

So, important to remember, that while Government revenues are down – the aid budget is increasing by 6% next year.

By 2015/16, Australia's aid budget will:

• Allow 10 million more children to be vaccinated against preventable diseases.
• Provide eight and half million more people with access to safe drinking water.
• Enable more than one million mothers to have their births attended by a skilled birth attendant.
• Provide assistance to an estimated 30 million people in times of crises.

This means that since 2007-08, the Government has boosted annual ODA spending by nearly $2 billion, or over 60%.

There will be a further 50% increase between now and 2015-16 taking us to 0.45% of GNI or approximately $7.7 billion.

This ensures we are on track to become the OECD's sixth largest donor by 2015-16.

Budget Highlights

The Budget implements the Government's new aid policy, An Effective Aid Program for Australia: Making a Real Difference – Delivering Real Results.

It meets our existing commitments.

Spending in all regions will be maintained or increased.

There will be new funding for PNG and the Pacific, East Asia – including Burma, as well as Afghanistan.

Over 70 per cent of our aid will be directed to our region, the Asia Pacific, where 22 of our nearest 24 neighbours are developing countries.

Our support will increase for key multilateral agencies who have been assessed as effective under the rigorous Australian Multi-lateral Review completed last year.

This will include the World Food Programme with which Australia has partnered time and again in some of the world's most dire humanitarian crises.

It will also include UN Women, an organisation that embodies the desire of UN member states to accelerate gender equality and empower women around the world. Our increased contribution will enable us to become their second largest donor.

Funding for the important work of Australian non-government organisations (NGOs) will also continue to increase with the expansion of the AusAID NGO Cooperation Program to $110 million in 2012/13 and $165 million by 2015/16. This is a four-fold increase from 2007/08.

NGOs are among our most important partners assisting in the delivery of a range of initiatives that are helping alleviate poverty in our region and beyond.

Our commitment to Fast Start Climate Change Financing will be met.

And we will increase our support to improve our response to humanitarian crises and disasters.

The Aid Program's strategic goals will be further supported by increases, in particular, in the areas of health, water and sanitation, education, economic development and humanitarian assistance.

I confirm this Government's commitment to build on the great gains to effectiveness and efficiency we have made following the release of AusAID's Transparency Charter and the Adviser Remuneration Framework.

Tonight, I am also pleased to announce the release of the four-year Comprehensive Aid Policy Framework and the establishment of the Independent Evaluation Committee.

The Comprehensive Aid Policy Framework will provide greater policy and funding predictability for our development partners.

And it includes the first ever set of headline results for Australia's aid program that we will hold ourselves accountable to.

The Independent Evaluation Committee will help us obtain graeter insights into our aid program – what works, what doesn't and why.

The Committee will be charged with providing independent expert evaluation advice to Government.

It will be headed by Mr Jim Adams, a former Vice President of the World Bank.

Conclusion

Despite the constraints of 2012-13 Budget environment, securing this funding increase demonstrates the Government's confidence in the Aid Program and more importantly the work of AusAID.

I can tell you from my short time in office, I have been profoundly impressed by the commitment of AusAID's staff and the effectiveness of its operations in delivering highly effective outcomes

Over the last four years, we have helped:

• More than 2.2 million boys and girls enrol in school.
• Provide 2.2 million people with access to safe drinking water; and
• Two million people with better sanitation services across Asia, Africa and the Pacific.

I witnessed the results of our aid first hand during my recent trip to Cambodia. At an eye hospital in Siem Reap, I saw some of the poorest of people have their sight restored … by local personnel … trained by Australians … using equipment from Australia.

And then in Phnom Penh, I saw local women being trained to be midwives. Consider this statistic – in Cambodia 500 women used to die for every 100,000 births. This is an appalling figure. It has been brought down to around 200 per 100,000 births as a result of the training of skilled birth attendants and it will continue to come down with Australia's help.

This is the Australian aid program delivering real results for poor people.

I will now hand over to Mr Peter Baxter, AusAID's Director General, to talk you through the details of AusAID's 2012-13 budget.

Media enquiries

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