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The aid program advances Australia's national interest by assisting developing countries to reduce poverty and achieve sustainable development.
With its focus on the countries of the Asia-Pacific region, the aid program is an integral part of Australia's engagement in the region and a practical demonstration of our commitment to helping build regional stability and prosperity.
The aid program is also an expression of the conviction of the Australian people that it is right for Australia to help the millions of people, especially among our neighbours, whose lives are afflicted by extreme poverty.
The Australian Government will provide $1.725 billion in Official Development Assistance (ODA) in 2001-02. This represents an increase of $125 million over the 2000-01 budget figure, and an increase of more than 6 per cent in real terms. Australia's ODA/GNP ratio for 2001-02 is estimated to be 0.25 per cent, well above the latest (2000) donor average of 0.22 per cent.
ODA represents only one part of the Australian Government's overall assistance to developing countries. The total effort is better reflected by ODA plus other official flows to developing countries which are reported by Australia to the Development Assistance Committee of the OECD, but which do not meet the narrow ODA criteria. The Government also provides generous tax deductions for contributions from the Australian people to non-government organisations providing overseas aid. When these other official flows and deductions are taken into account, Australia's total Government assistance to developing countries stands at around $2.75 billion, or 0.40 per cent of GNP.
Four years on from the initial shock of the East Asian financial crisis, its reverberations are still being felt throughout the region. While there has been a return to economic growth across the Asian countries, the recovery is fragile and uneven. Major political and social changes present opportunities, including for more open, democratic and accountable government, but also pose risks to stability as countries grapple with rapid change. National and regional security are increasingly challenged by non-military threats, such as transboundary criminal activities, communicable diseases and adverse environmental impacts. And as we have seen again in recent years-in East Timor, Solomon Islands, Fiji, parts of Indonesia and elsewhere-conflict devastates people's lives, undermines development gains, and has long-term effects on economic growth prospects.
As a strong and stable member of the region, Australia is committed to working with our partners in Asia and the South Pacific to achieve a secure and prosperous future for us all. The aid program will continue to have a vital role in taking forward the Government's overall approach in the region.
The program will continue to help partner countries implement the range of reforms necessary for sustainable economic growth, including trade related assistance to enhance their capacity to participate effectively in the global and regional economies. The strong and increasing emphasis on good governance will help develop the political, economic and social conditions essential for sustainable development and enhanced stability. The aid program will continue to work with regional countries to find regional solutions to transboundary problems. The aid program will also continue to be an indispensable tool for Australia to help address both the underlying causes and the consequences of conflict in the region.
In 2001-02, the major features of the aid budget aimed at promoting regional peace, stability and economic development include:
Globalisation will continue to provide opportunities for those developing countries that have an open approach to development, effective governance and efficient markets. With the right policy and regulatory environment, the revolution in information and communication technologies holds enormous potential to offer significant development gains. Australia will continue to work with developing countries, including through the aid program, to meet these globalisation challenges.
HIV/AIDS is one of the greatest tragedies and challenges facing developing nations today, and increasingly so in the Asia-Pacific region. The spread of the disease can devastate a nation's productive resources, cut a swathe through whole generations, and dramatically reduce economic and social development. It will continue to demand a concerted and sustained response from the international community.
Natural disasters and conflicts will continue to cause immense human suffering across the globe. As we have demonstrated over the last year in response to the earthquake in India, floods in the Mekong region, drought in the Horn of Africa, and violence in the Middle East, Australia will continue to provide flexible and responsive emergency and humanitarian assistance to ease the suffering caused by these crises.
Some of the features for the 2001-02 budget are:
Volunteers come from all walks of life, but share one thing in common - a desire to improve the world we live in.
The Australian Government recognises the valuable contribution that thousands of volunteers make, and aims to facilitate and promote the work of volunteers at home and abroad.
Volunteers build strong links with local communities and are an excellent vehicle for promoting development. By sharing their skills and building partnerships with local communities, Australian volunteers help to strengthen our ties with developing countries in the Asia-Pacific region.
To celebrate and recognise the outstanding contributions of Australian volunteers in 2001, the International Year of Volunteers, the Government is pledging $60 million for volunteer activities over the next three years.
This pledge will build on our commitment to the Australian Youth Ambassadors for Development Program, and other volunteer organisations, including Australian Volunteers International (AVI) and AESOP Business Volunteers.
The 2001-02 aid budget continues this Government's commitment to working with our developing country partners and other members of the international donor community to help reduce poverty and achieve sustainable development.
The aid program will remain a strong feature of Australia's active and constructive engagement particularly in the Asia-Pacific region, drawing on the strength of our economy and the depth of relevant expertise in the Australian public and private sectors, and the broader Australian community.
By investing in development, we are investing in our own future.
Alexander Downer
Table 1: Total flows to partner countries ($m)
1 Shows expenses plus cash from capital injections and special appropriations, minus new commitments to multiyear liabilities such as the World Bank. Expenses are not strictly comparable to cash figures, but the difference is only around 1 per cent.
2 Total aid flow estimates for 1999-2000 onwards are not strictly comparable to historical expenditure figures (which are based on figures published in the Statistical Summary 1998-99: Australia's Overseas Aid Program). Historical figures do not apportion regional program expenditure by country. Refer to Table 4 for a direct comparison between historical and estimated country program allocations.
3 Shows total aid flows for the estimated Budget Figure as at May 2000 of $1,599.3 million and estimated Expected Outcome as at May 2001 of $1,705.2 million. The estimated Expected Outcome for total aid flows has increased largely due to Australia's generous whole-of-government response in East Timor and improved reporting of aid flows by other Government Departments.
4 PNG increase due to expenditure by other Government Departments on Bougainville peacekeeping efforts.
5 Fiji allocation and total flows to be determined within the overall Pacific allocation.
6 Solomon Islands allocations and total flows to be determined within the overall Pacific allocation.
7 The Pacific Policy and Management Reform program is included in the total aid flows to individual Pacific island countries.
8 Increase due to underestimate of accrual adjustments at Budget time 2000-01 and an administered operating loss of $6.636 million due to rationalisation of payments to multilateral organisations (this change in accounting treatment required a one-off increase in expenses in 2000-01 with no corresponding cash requirement).
9 Real per cent change over 1999-2000 Budget Figure of $1,502.0 million.
10 Real per cent change over 2000-01 Budget Figure of $1,599.3 million.
11 This compares ODA to GNI, not GNP, but the two measures are very similar. In late 1998, the Australian Bureau of Statistics changed its method of calculating GNI resulting in all historical measures of GNI, GNP and GDP being revised upwards and, consequently, ODA/GNP ratios revised downward.
12 Other Australian Flows includes: Other Official Flows (OOF) to developing countries that are reported by Australia to the Development Assistance Committee of the OECD, but which do not meet the narrow ODA criteria; and tax deductions for contributions from the Australian people to non-government organisations providing overseas aid.
13 Total Australian Assistance provides an indication of the Australian Government's estimated total effort in developing countries, including Official Development Assistance, Other Australian Flows and tax deductibility (see note 12).