Australian Government, 2012‑13 Budget
Budget

Foreword

The fundamental purpose of our aid is to help people overcome poverty.

Around the world, there are 1.3 billion people living in extreme poverty. Two thirds of these people are living in Asia and the Pacific. There are also 7.6 million children who die each year before reaching the age of five, from causes that have been largely overcome in Australia.

This is not acceptable to Australians.

Australians are generous and caring people. Australian families give personal donations to overseas aid efforts that total almost $1 billion every year.

Australians give aid because it works. Over the last four years, we have helped more than 2.2 million boys and girls enrol in school. Since 2007‑08, we have provided 2.2 million people with access to safe drinking water and two million with better sanitation services in countries across Asia, Africa and the Pacific.

I witnessed the results of our aid first hand during my recent trip to Cambodia. At an eye hospital in Siem Reap, I saw the poorest of people with their sight restored for the first time in years or decades by local personnel trained by Australians with equipment from Australia.

And then in Phnom Penh, I saw local women being trained to be midwives.  Consider this statistic — in Cambodia 500 women used to die for every 100,000 births.  This is an appalling figure.  It has been brought down to around 200 per 100,000 births as a result of the training of midwives. 

This is a result made possible with Australian aid. 

Reducing poverty and promoting development is also good for Australia. It contributes to peace and stability and generates demand for Australian exports. Developing countries imported $110 billion of Australian goods and services last year alone. This creates jobs in Australia.

For these reasons, the Government has increased the aid program by over 50 per cent since it took office in 2007. To return the federal budget to surplus, the Government has made the difficult, though fiscally responsible decision to defer the full achievement of the 0.5 per cent target by one year to 2016-17. This in no way diminishes our commitment to helping the world's poor or to achieving the Millennium Development Goals.

Despite challenging budgetary circumstances, we have decided to again increase the aid budget in 2012‑13, to $5.2 billion up from $4.8 billion in 2011‑12. This increase of 6 per cent in aid represents 0.35 per cent of our Gross National Income (GNI). We remain committed to increasing our aid effort to 0.5 per cent of GNI.

The 2012‑13 Aid Budget implements the Government's aid policy - An Effective Aid Program for Australia: Making a real difference — Delivering real results - released in July last year. It provides funding over four years for immunisation, education and law and justice programs in the Pacific, for the poorest countries in East Asia including Burma, and for an expanded capacity to respond to humanitarian crises and disaster preparedness around the world. New funding will also target major multilateral organisations that we have assessed as effective and able to contribute to Australian aid objectives, including the Asian Development Bank, the World Food Programme and UN Women.

As Minister for Foreign Affairs, I am committed to increasing the size of our aid effort and committed to improving its effectiveness. Australia already has a good aid program, underscored by the findings of last year's Independent Review of Aid Effectiveness. I am determined to make it even better.

As a key component of this shift, I am pleased to announce the establishment of the Independent Evaluation Committee to be chaired by Jim Adams, a former Vice President of the World Bank. The Committee will help evaluate our aid efforts and improve them.

I am also releasing a new four-year strategy for the aid program. This strategy — Helping the World's Poor through Effective Aid: Australia's Comprehensive Aid Policy Framework to 2015-16 — is a roadmap for the aid program to 2015-16. It contains a rolling four-year budget strategy, with forecasts of where Australian aid will be delivered and the results we expect to achieve by 2015-16. By providing policy and funding clarity, we will be able to plan, design and deliver aid programs with greater certainty. This will deliver better results — more lives saved, more poor children provided with an education and better responses to disasters and humanitarian emergencies. For example, we aim to help vaccinate more than 10 million children in developing countries against disease, and provide more than 8.5 million people with access to safe drinking water by 2015-16.

I will report to Cabinet and to the public annually on progress against this strategy.

These reforms continue efforts already in progress to make Australia's aid more focused on achieving results for poor people and on delivering value for money for Australian tax payers.

Signature of Bob Car, Minister for Foreign Affairs

Bob Carr, Minister for Foreign Affairs

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