The Direct Aid Program. The Direct Aid Program (DAP) is a small grants program funded by the Australian Government and managed by the Australian High Commission in Port Moresby. DAP aims to support small-scale projects with a strong development focus that complement Australia’s broader aid program. Australia's overseas aid is an investment in a better future for our neighbours. To another government (bilateral aid) to deliver a programme that reflects both the.
Two months ago, the Australian minister for international development and the Pacific, Concetta Fierravanti-Wells, argued that “80% of Australians do not support any further spending on foreign aid”.
This was reflected in the 2017 Lowy Institute Poll where, when the Australian respondents were told exactly how much Australia invested in aid, $3.8 billion, only 22% supported an increase.
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But dollar amounts can be misleading, so the 2018 Lowy Institute Poll took a different approach to the question of public support for Australian aid. Instead of asking Australians whether our current aid investment was right, we asked how much they thought we invested. The results, which back up other research into public opinions on foreign aid, are in striking contrast to reality, revealing how fraught polling of public perceptions on foreign aid can be.
Our 2018 results show that Australians have a highly inflated perception of the size of our aid program. The average Australian believes we invest about 14% of the federal budget on foreign aid and that we should actually invest about 10%. In reality, we invest 0.8%.
On average, Australians think we invest 17.5 times more than we actually do, and would like us to be 12.5 times more generous than we are. Only 6% of respondents guessed anywhere close to the actual number. If that’s how much they think we invest, it’s no wonder there is little support to increase it.
When told how much we actually invest, be it $5 billion (1.2% of federal expenditure) in 2015 or, after significant cuts, $3.8 billion (0.8% of federal expenditure) in 2017, the results are remarkably sticky. The majority thought it sounded reasonable, and only 21% in 2015 and 22% in 2017 supported an increase. When given no baseline, they think we invest more than we do, and think it should be less.
How do we reconcile these results, which appear completely at odds with one another?
To me, this shows how little Australians think about foreign aid. We think of ourselves as a generous nation and expect that to be reflected in our aid program. We don’t give any real thought to it, and in the end trust the government to do what’s right.
Read more: FactCheck: What are the facts on Australia's foreign aid spending?
But the government is not doing what is right. Since the Coalition government came to power in 2013, Australian aid has been cut by close to 25% when adjusting for inflation.
Australian aid is now at its lowest point in our history, when measured as a proportion of national income. As peers like the United Kingdom and New Zealand are rapidly stepping up, we are slipping into the bottom third of rich country donors.
We are the fifth-most-prosperous country in the OECD but rank 21st in generosity. By 2021, our donor peers down the bottom will be Spain, the United States, Portugal, Slovenia, Greece, Korea, Czech Republic, Poland, Slovak Republic and Hungary.
Why is this the case?
For me, the answer is that the Abbott and Turnbull Coalition governments do not see the efficacy and importance of aid. They don’t see the critical national interest of our aid program in building goodwill and strong institutional linkages with our immediate neighbours, or the impact it has on improving people’s lives.
They know it will only ever be a marginal election issue, and what few votes there are for it tend to sit on the other side of the aisle. If MPs don’t believe in its importance and don’t see any election implications or widespread public outcry at the cuts, it starts to make sense why the aid program has been such an easy target for this government.
Fierravanti-Wells instead argues forcefully that it is impossible to increase the aid budget when the public does not support it.
Academic literature points to this being a critical flaw of foreign aid. Normal feedback mechanisms of domestic government expenditure that promote effectiveness and support do not apply to foreign aid. Taxpayer money is collected in one country and spent in another, with taxpayers having little knowledge of, or interest in, how it is being spent.
Beneficiaries of aid, on the other hand, have a strong interest in aid, but no direct political influence or voice to advocate for it. These flaws result in a marginal constituency for foreign aid, reflecting its marginal place in government expenditure.
What’s surprising about foreign aid is the public scrutiny it receives from our political class over other investments in Australia’s national interest. Our diplomatic, defence and intelligence expenditure receive less public scrutiny despite far larger (and growing) sums.
The development community has in part allowed this to happen by failing to build and maintain a bipartisan political constituency for Australian aid by selling the importance of foreign aid as a critical investment in Australia’s national interest. It is an important complement to our investments in diplomacy and defence, particularly because we are surrounded by developing nations that have significant financing challenges.
Read more: Savage budget cuts pull Australia down in foreign aid rankings
Having just a few political champions can do more than any campaign to deepen public support for Australian aid. Our politicians have the loudest megaphone to support the aid program, but at the moment are choosing not to use it.
There are ways out of this. Aid advocacy efforts could be professionalised and targeted at members of parliament. There should be more study tours for politicians, like those run by Save the Children with the support of the Gates Foundation, to see Australian aid in action in supporting the unprecedented humanitarian and development needs in our region. More effort should be made to highlight the foreign policy and strategic imperative for Australian aid, particularly in response to the growing competition from China, which has finally captured the attention of Australian media in the Pacific.
The Australian aid program is at a disappointing low point, and our poll shows that there is expectation for us to be doing more. It’s time for some political leadership to turn things around.
Related documents:
How we are helping
2014/15 Bilateral Outcome
$551.9 million
$551.9 million
2015/16 Bilateral Budget Estimate
$323.0 million
$323.0 million
2015/16 Total Australian ODA Estimate
$375.7 million
$375.7 million
The Australian Government will provide an estimated $375.7 million in total ODA to Indonesia in 2015-16, including an estimated $323 million in bilateral funding managed by DFAT.
Australia and Indonesia’s broad partnership encompasses political, security, trade, economic and development cooperation. It is underpinned by substantial people-to-people and institutional links. Around 13,700 Indonesian students were enrolled in Australian educational institutions in 2014, the eighth-largest international student group. Indonesia is currently our 12th-largest trading partner. Its location, geography and demography give Indonesia an important geopolitical and strategic role in the region. Sustainable and inclusive economic growth in Indonesia benefits Australia and contributes to regional growth and stability.
Despite progress over the past decade, economic growth in Indonesia is slowing and inequality is rising. While it is a middle-income economy, structural bottlenecks to growth and social inclusion remain. Slowing growth will make it challenging for Indonesia to graduate from middle income status by 2025 and to tackle poverty and increasing inequality. Productivity has lagged behind other economies because of the infrastructure deficit, skills deficits, corruption and the exclusion of women from economic participation. Improving the efficiency and competitiveness of Indonesia’s labour and product markets and improving the investment environment more broadly are also critical priorities for a more resilient economy.
Indonesia’s National Medium-Term Development Plan 2015-19 (RPJMN) is part of the country’s National Long-Term Plan 2005-2025 and sets out the Government’s vision and priorities for the country. The nine priority areas include good governance, improved productivity and competitiveness, human resource quality and self-sufficiency. It has a focus on Eastern Indonesia to help address regional disparities in development, whilst maintaining growth momentum in other parts of the country. Australia’s Aid Investment Plan 2015/16-2018/19 will align to the greatest extent possible with RPJMN priorities.
Australia is committed to supporting Indonesia’s development. Reflecting our transition from a donor-recipient model to an economic partnership of equals, we will support Indonesia’s efforts to distribute the benefits of growth to a larger number of its people. We will work together with Indonesia to provide the foundation for higher economic growth, private sector investment and increased levels of trade. Assistance will focus on areas such as financial sector supervision, budgeting, and macroeconomic management. In human development, our programs will catalyse change and build capacity to provide better quality health and education outcomes at the community level, including in the poorer Eastern regions. We will promote an inclusive society through better service provision, social assistance, poverty reduction policy advice and support for the rule of law. Gender equality will be a priority concern for the program, with an emphasis on women’s economic empowerment and a gender focus across investments.
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Our development cooperation program in Indonesia is structured around the following three objectives, as outlined in the Aid Investment Plan
Objective 1: Effective economic institutions and infrastructure
Improving economic institutions and infrastructure is essential to Indonesia’s ongoing development. Australia is supporting Indonesia to boost inclusive growth and productive jobs through its public policy and regulatory settings. By supporting areas such as financial sector stability, revenue mobilization, improved government spending and tax collection we will contribute to better economic productivity.
Bottlenecks in infrastructure constrain growth. Our support will help address disincentives to infrastructure investment, including through technical assistance and policy advice on regulatory provisions, planning and evaluation. Better infrastructure will require a multifaceted approach including more efficient and timely use of government resources, better project selection and preparation, and productive partnerships between the public and private sector.
Objective 2: Human development for a productive and healthy society
Indonesia needs to drive the development of human capital to create the conditions for higher growth. We will support Indonesia’s efforts to address the acute problems - such as maternal mortality, child stunting, and poor literacy and numeracy - that limit the productivity of its workforce.
Our Australia Awards Scholarships deliver considerable educational dividends for Indonesia’s future leaders as well as valuable people-to-people linkages. Areas of study will continue to focus on a broad range of fields relevant to economic, strategic and development outcomes. We will promote participation from Eastern Indonesia including East Nusa Tenggara, West Nusa Tenggara, Papua and West Papua.
Objective 3: An inclusive society through effective governance
We will work with Indonesia to ensure that the poor and marginalized in society benefit from economic growth. We will help develop better quality economic and social protection policies based on research and analysis. We will continue to pursue programs for women’s economic and political empowerment, which help women gain jobs and other sources of financial security. Marginalised groups will benefit from improved disability access and support; new assistance for strengthening the rule of law; and support for better local service provision.
Our results
- In 2015, 866 Australia Awards scholarships were provided to Indonesian citizens.
- In 2014-15, 25,078 additional births in Eastern Indonesia were attended by a skilled birth attendant. There has been a 31 per cent increase in the number of births delivered in a facility from 2009 to 2014, and over the same period the number of maternal deaths decreased by 40 per cent.
- 21,943 poor women and men accessed new agricultural technologies and resources in 2014.
- In 2014, 464,034 people had improved access to clean water or sanitation.
- Our women’s empowerment program supported the development of 950 local women’s groups across Indonesia, which will help their 17,409 female members to participate in policy-influencing activities in areas such as increasing women’s access to jobs and strengthening women’s leadership to reduce violence against women.
Our changing program
Our aid program in Indonesia reflects the priorities of the Indonesian and Australian governments. Following the release of the 2015-16 aid budget we have consolidated our activities to focus on three main areas – economic growth, human development, and stability and inclusion. This rebalancing reflects the successful development trajectory of Indonesia and the progression from a traditional aid donor-recipient relationship to a broader economic partnership.
Reorienting our program to Indonesia’s priorities will extend its reach and effectiveness, and will result in substantial changes in some sectors. We will stop building infrastructure using grant funding and will instead focus on working with Indonesia to get better results from its own substantial infrastructure spending. We will increase the quality and implementation of economic policy by tightening our economic governance programs. Our rural enterprise work will focus more closely on private sector development, including through partnerships with Indonesian banks and Australian companies.
We will also reframe our support for education and health, reduce stand-alone sector programs and focus more on common challenges to improving health and education systems. We will, however, continue to target maternal and child health, stunting, and children’s literacy and numeracy, along with emerging infectious diseases.
We will continue our successful work on women’s political and economic empowerment and social protection, with a shift towards labour migration and mobility. We will design a new program to support the rule of law and counter violent extremism. We will close our disaster preparedness and management program, but retain scientific research and response cooperation in this area.