Australian Government, 2008‑09 Budget

Foreign Affairs and Trade

Overseas development assistance

The Government is increasing the level of Australia's overseas development assistance to around $3.7 billion in 2008‑09. This represents an increase of $500 million from 2007‑08, and is a significant step towards achieving the Government's commitment to a ratio of Official Development Assistance (ODA) to Gross National Income (GNI) of 0.5 per cent by 2015‑16. ODA is expected to rise from 0.30 per cent to 0.32 per cent of GNI in 2008‑09.

The expenditure will focus on assisting developing countries, particularly those in the Pacific, to achieve sustainable economic growth in the long term. Economic growth is fundamental to reducing poverty and achieving the Millennium Development Goals, which include halving extreme poverty, halting the spread of HIV/AIDS and providing universal primary education by 2015. Australia's development assistance will also utilise strengthened partnerships with international multilateral organisations, including the United Nations.

Australia's development assistance contributions to the Pacific will be guided by the Port Moresby Declaration, signed by the Prime Minister on 6 March 2008 during his visit to Papua New Guinea. Signalling a new approach by the Government to its bilateral development assistance relationships in the Pacific, the Port Moresby Declaration proposed that Australia negotiate Pacific Partnerships for Development with its Pacific neighbours. These partnerships would embrace a spirit of mutual responsibility between donor and recipient of development assistance in order to improve governance, increase investment in economic infrastructure and achieve better outcomes in health and education.

The expenditure will help the Government to meet its election commitments of: assisting neighbouring states to adapt and respond to the impact of climate change; fighting avoidable blindness; and improving access to clean water and effective sanitation. Australia will also fund a targeted humanitarian and reconstruction support package in Iraq.

The 2008‑09 Budget provides $1.3 billion of new initiatives over four years. It is expected that the ratios of Australia's ODA to GNI will be 0.35 per cent in 2009‑10 (a year earlier than originally targeted), 0.37 per cent in 2010‑11, and 0.38 per cent in 2011‑12. These ratios correspond to amounts of $4.2 billion, $4.6 billion and $5.0 billion in 2009‑10, 2010‑11 and 2011‑12 respectively.

Additional funding for these measures will be assigned from the unallocated provision for expanded development assistance funding held in the Contingency Reserve.

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