Interview with Linda Mottram, Radio Australia
Topic: Australia's Federal Budget 2010.
Transcript, proof copy. E&OE
12 May 2010
Australia's federal budget is a document that's being applauded as fiscally responsible and one that's given a big boost to the overseas aid budget.
Presenter: Linda Mottram
Speakers: Australian Foreign Minister Stephen Smith
MOTTRAM: Stephen Smith thanks for your time. This budget is getting a lot of quite good response for being fiscally responsible, but globally, there's a lot of uncertainty out there, Europe, Greece. You are also banking heavily on China clearly being a continuing source of income for Australia through the resources boom. Just in terms of that big picture, how concerned is the government that that instability might cut into your budget ambitions?
SMITH: Well obviously we've been looking very closely at Europe in recent times and we're moving through the adverse consequence of the global financial crisis. But the heart of this budget is fiscal and economic responsibility and we're doing that for the very obvious reason that we want to get the budget back in the black three years, three years earlier than we otherwise expected, so we're being very responsible. You always have international economic challenges. We've just been through one of the worst and because of our stimulus packages, we managed to avoid a recession in Australia. Now we've got to be fiscally disciplined to make sure we emerge from that in good shape and we're confident we're on track for that.
MOTTRAM: Some of the positive results for the budget from the China situation have flowed through to the aid budget and you've increased it this year up from three-point-eight Billion up to four-point-three Billion Australian dollars. Do aid groups seem pretty happy with that?
SMITH: Just on China, obviously China is a very important market for us and that has been one of the things which has helped us get through the global financial crisis. But one of the strengths of the Australian economy now is that we are a much more diverse economy with much more diverse markets, including, for example, India, but including the ASEAN economies combined which have grown in size since the global financial crisis itself. In development assistance, we are very pleased. This is a 500 million dollar increase over last year's annual amount. Since we came to office, we've effectively increased the development assistance budget by one-point-two Billion dollars and we are on track in a sensible, managed, scaled way to get to our election commitment, which is to increase our development assistance to zero-point-five per cent of gross national income by 2015-16.
MOTTRAM: One of the big ticket items in this budget is you have got three programs, so called Fast Start programs climate change adaptation for poor countries. Under your international obligations, that is not meant to come out of ODA. Why is it coming out of the Development Assistance budget?
SMITH: Well, there are a mix of sources from where our climate adaptation and mitigation comes. Some of our adaptation and mitigation comes from our development assistance, but it's new money, it's additional money. It is not cutting away from any of the existing programs.
MOTTRAM: Okay, so you're not taking from an existing program, but it is coming out of budgeted ODA?
SMITH: Well, some of it is climate adaptation, some is mitigation. There are two key points. Firstly it's additional money, it's new money. It's not taking away from other programs. Indeed as a general proposition, because we're spending 500 million dollars more. The programs are enhancing. But secondly, the object if you like, or the target of our climate change financing are low income developing countries, particularly in our own backyard, so far as the Pacific is concerned, the small Pacific Island states, so we want to help those least developed countries, lower income countries, make the necessary adaptation to climate change. So we're very confident with the approach that we have taken. There are other areas of the budget which also see climate change adaptation and mitigation, but we are very comfortable with the way we've approached it so far as development assistance budget is concerned.
MOTTRAM: One of the elements you have announced is a technical advisory review. Does that go to that difficult question of boomerang aid, in other words, Australia giving aid that goes into the pockets of contractors and comes back?
SMITH: Well, one of the reasons that we have instituted the review is to make sure in the end that we get value for money. Because of our commitment to go to zero-point-five per cent of gross national income by 2015-16, the development assistance budget is growing expeditionally, so we need to make sure when we're spending much larger volumes of Australian taxpayers money that a couple of things occur. Firstly, that we get value for money and the review of the technical advisers arrangements is one way of helping to ensure that. But secondly, we also need to ensure that we've got the capacity from within government to also manage those growing volumes of development assistance and we are looking at changed arrangements so far as Ausaid is concerned in the portfolio of foreign affairs and trade to make sure that we have got the managerial capacity to deal with and enhanced budget. But we're doing the review in consultation with partner countries. Obviously we'll do it on consultation with the advisers themselves, but we believe it is a necessary stocktake as we scale up to zero-point-five per cent.
MOTTRAM: And what regions give you the most concern in terms of technical advisers? I mean it seems to be working very well, for example, in Asia, East Asia. Is the Pacific your main concern?
SMITH: We're doing it across the board for all of our contracts, so I am not proposing to focus on one or a particular country. We want to make sure we've got good standards and good rigour across all of our contracts. It has been a feature of Australian development assistance. It may be that in more recent times, there has been an over-reliance upon it, and so it may be that I am not proposing to prejudge or determine the review, but it may be one of the outcomes is that we look at other ways of delivering capacity-building. But that is the good thing about doing the review. We will be able to see that analysis and those results in due course.
MOTTRAM: Minister, thanks for your time.
SMITH: Thank you.
END
Media inquiries
- Minister's Office: (02) 6277 7500
- Departmental Media Liaison: (02) 6261 1555