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QUESTION: Minister, the Government's decided to put an extra half a billion dollars into the ODA Budget or the overseas aid budget for the coming financial year. Why the increase?

STEPHEN SMITH: Because we think it's very important for Australia to be a good international citizen. We want to build capacity in our region, particularly with less well-developed countries. It's a responsibility we take seriously and is part of our absolute commitment to meet our election promise of getting to 0.5 per cent of gross national income by 2015-16.

QUESTION: What are you hoping to achieve with that extra money?

STEPHEN SMITH: The focus of the program is in some important service areas: health, particularly child and maternal health care; education, both basic education and scholarships.

And whether it's Papua New Guinea or the Pacific Islands, whether it's Indonesia, we want to help build capacity, to improve the living standards of those countries, to help alleviate poverty and to give the people of our region a good chance to improve their living standards and to improve their lifestyle and to engage in meaningful employment.

QUESTION: So overseas assistance, development assistance, is to be - the aim is to have it at 0.5 per cent of GNI by 2015. Now there has been this new formula for GNI which will mean much more money, do you guarantee that you will still meet that target, with the new definition of GNI?

STEPHEN SMITH: There have been two hurdles that we faced in getting to our commitment. One, of course, has been the global financial crisis but when that was at its peak both the Prime Minister and I made it absolutely clear that we would not be deviated from our commitment.

The changed GNI formula, the changed calculation increases, essentially, the size of our economy. So to meet our 0.5 per cent commitment we have to spend more money. So on the basis of the changed calculation it requires an additional two and a half to three billion dollars over the period from now until 2015-16. So almost three billion dollars more than what we expected last year and we continue to want to achieve that and effect that and we will but we'll do it in a staged and sensible and responsible manner.

We want to make sure that our development assistance agency can manage a substantially enlarged program and also ensure that the countries, our partner countries are also in a position to utilise the additional funds in a productive way.

QUESTION: So you guarantee the target will be met?

STEPHEN SMITH: We have made clear that this is an absolute commitment from which we will not deviate.

QUESTION: Okay, now aid groups are disappointed there isn't a sort of clearer and - a more significant spend in this budget on helping poor countries adapt to climate change. There are a few existing programs and there is some money there but not the significant money they were hoping after Australia's commitment for the fast track funding that it made at Copenhagen.

STEPHEN SMITH: I think that's frankly a misplaced criticism. In the previous budget we had about $150 million that we utilised for climate change adaptation and mitigation purposes. We've substantially added to that in this budget over the next two years and you find just over $350 million additional funds utilised for that purpose.

That more than comfortably meets Australia's fair share of the initial fast start climate change financing undertakings entered into by countries at Copenhagen and we certainly don't rule out additional contributions in future years. On the contrary, we will look very carefully in future years as to what more we can do.

Importantly, the focus of our climate change financing is also aimed at the less-developed countries, low income countries, countries that need that assistance most. But it's also the case that some middle income countries, for example Indonesia, are also in need of assistance and we're doing that as well. So I think the criticism is misplaced. I think as the description provides, fast start, first step, and we will do more.

QUESTION: So as far as you're concerned that money is in the budget and you're already doing your share, Australia's share of the $30 billion pledge by the countries at Copenhagen.

STEPHEN SMITH: The budget commitments that we've made, in our view, comfortably meet our fair share of those initial requirements but we are not just open-minded, we will look very positively at doing more into the future.

QUESTION: Okay and, look, just briefly, there's a senior Chinese Defence official coming to Australia tomorrow. Will you be meeting him?

STEPHEN SMITH: Yes, I'll meet him. He's coming to Canberra. It's an important visit and I'm looking forward to the conversation. We have a good relationship with China, economically and more generally, and it'll be, I hope, a productive conversation.

QUESTION: What point will you be making to him?

STEPHEN SMITH: The importance of our economic relationship with China, the fact that we now have a more broadly based relationship as well. I conduct with my counterpart, Foreign Minister Yang a Strategic Dialogue every year, the importance of the relationship, but also the understanding that there are some matters in respect of which we have different views and we've seen those in the recent past. But we have more than comfortably dealt with those given the overriding strength and importance of the economic relationship and the relationship generally.

QUESTION: And what's the purpose of his visit here?

STEPHEN SMITH: It's important that we have high level exchanges. He'll be conducting consultations with officials and other Ministers, so high level visits between senior officials, high level visits between Ministers, is very important to any relationship and it's important to the China relationship.

END

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