Australian Government, 2012‑13 Budget

1. Australia's International Development Assistance Program

1.1. Introduction

This statement provides detail on the 2012‑13 Aid Budget.

The statement is in six sections:

  • Section 1 summarises the Government's new Comprehensive Aid Policy Framework and the 2012‑13 Aid Budget;
  • Section 2 details 2012‑13 country and regional program allocations and provides indicative budget allocations for 2015-16, based on the Comprehensive Aid Policy Framework;
  • Section 3 details 2012‑13 global program allocations, including support for multilateral and non‑government organisations;
  • Section 4 outlines progress and results achieved against the five strategic goals of the aid program, and major programs to be funded in 2012‑13;
  • Section 5 covers the Official Development Assistance (ODA) eligible activities of Australian government departments other than AusAID; and
  • Section 6 outlines measures that are enhancing the performance of the aid program.

1.2. An Effective Aid Program for Australia

In 2011, the Government released a new aid policy, An Effective Aid Program for Australia: Making a real difference — Delivering real results. As the policy states, the fundamental purpose of Australian aid is to help people overcome poverty. This serves Australia's national interests by promoting stability and prosperity both in our region and beyond.

We also provide aid because Australians find it unacceptable that people across the globe still live without sufficient income to lead a decent life, or to buy basic medicines or send their children to school.

More than 10 years have passed since world leaders established the Millennium Development Goals (MDGs). These are a set of eight interrelated global development goals agreed by almost 200 United Nations member countries, including Australia, in 2000. The MDGs include targets for the eradication of poverty, hunger, disease and gender inequality, and the achievement of universal education, health and environmental sustainability by 2015.

There has been remarkable progress towards the achievement of these targets. For example, the World Bank estimates that the MDG target of halving the proportion of people living in extreme poverty between 1990 and 2015 has already been met.

Yet serious challenges remain. There are still 1.3 billion people living in extreme poverty in our region and around the world. And a further 1.1 billion, many of whom are in Asia, live just above the extreme poverty line existing on no more than US$2 a day.

Many of those who continue to live in extreme poverty are in conflict-affected or fragile states, or remote regions, making it increasingly difficult to make further inroads into poverty reduction. And many of those lifted out of poverty in recent years are vulnerable to slipping back into poverty.

At a global level, Australia's aid program aims to ensure that the MDGs are achieved. Australia does not act alone in pursuing these goals: they are shared by donors and developing nations alike. And measuring collective progress against the MDGs is important. However, to meaningfully assess the effectiveness of Australia's work, we must also measure how Australia's individual efforts are contributing to the MDGs.

Australia's aid program is guided by five strategic goals which are outlined in Diagram 1 — Saving Lives, Promoting Opportunities for All, Sustainable Economic Development, Effective Governance, and Humanitarian and Disaster Response. These strategic goals operationalise Australia's contribution to the MDGs.

Under the strategic goal of saving lives, the Government has committed to save the lives of poor women and children through greater access to quality maternal and child health services (MDGs 4 and 5) and support for large scale disease prevention, vaccination and treatment (MDG 6). Our strategic goals recognise that performance in other sectors, particularly good governance through better public financial management and the maintenance of law and justice, makes a vital contribution to the achievement of the MDGs. Finally, progress in any of these areas can be undermined by inadequate preparation for humanitarian and natural disasters.

Diagram 1: Framework for the Australian aid program

Diagram outlining the purpose and strategic goal of the Australian aid programe. The fundamental purpose of Australian aid is to help people overcome poverty. The strategic goals are: saving lives; promoting opportunities for all; sustainable economic develoment; effective governance; and humanitarian and disaster response.

1.3. The Comprehensive Aid Policy Framework

In the new aid policy, An Effective Aid Program for Australia: Making a real difference — Delivering real results, the Government undertook to develop a Comprehensive Aid Policy Framework (CAPF). The CAPF provides a roadmap for where and how Australian aid will be spent over the next four years.

The main features of the CAPF are:

  • an overview of why we provide aid and what we will focus our aid on;
  • an outline of where we will provide aid by 2015-16 and why, including indicative budget allocations for all regions;
  • results we will achieve through our aid investment by 2015-16; and
  • how we will efficiently and effectively deliver our aid.

The CAPF encompasses the aid spending of all federal agencies, not only the Australian Agency for International Development (AusAID).

More predictable, multi-year funding is a key element of effective aid. The CAPF will enable the Australian Government and Australian aid recipients to plan and implement aid investments more effectively. The CAPF also provides the Australian people with clarity on what the aid program is trying to achieve.

The forecasts of budget allocations for all regions contained in the CAPF is shown in Diagram 2. These are based on a comparative analysis of poverty, national interest, our capacity to make a difference, and the scale and effectiveness of our existing aid programs. These forecasts have informed the 2012‑13 Aid Budget allocations and will inform future aid allocations.

Further detail on the CAPF, including the methodology and results we will achieve by 2015-16 can be found in the Government's separate publication Helping the World's Poor through Effective Aid: Australia's Comprehensive Aid Policy Framework to 2015-16, available from 8 May 2012 on the AusAID website (

Diagram 2: Indicative geographic distribution of the aid program by 2015-16

Diagram 2:  Indicative geographic distribution of the aid program by 2015-16: Total Global Program - $2.35bn; Africa and the Middle East - $625m; South and West Asia - $725m; Pacific - $1.6b of which Papua New Guinea - $650; Latin America and the Caribbean - $50m

1.4. The International Development Assistance Budget

The Government will provide an estimated $5,153 million in total official development assistance (ODA) in 2012‑13, of which $4,752 million will be managed by AusAID and $506 million will be administered by other Australian government departments. It is estimated that total ODA will be equal to around 0.35 per cent of gross national income (GNI) in 2012‑13. The Government has committed to increase Australia's ODA/GNI ratio to 0.5 per cent by 2016-17. To reach this target, the Government expects to increase Australian aid to around 0.37 per cent of GNI in 2013‑14, 0.41 per cent in 2014‑15 and 0.45 per cent in 2015-16.

Table 1: Composition of Australian ODA

Table1: Composition of Australian ODA

Notes: see page 141.

In 2012‑13, Australia will provide bilateral aid to around 35 countries around the world. We will also help some 80 other countries through regional and global programs.

Table 2 shows total Australian ODA from all agencies and programs attributable to partner countries and regions. This includes: (i) country program allocations; and (ii) global and Other Government Department (OGD) expenditure that can be attributed to countries and regions.

Table 2: Total Australian ODA by partner country and region

Table 2: Total Australian ODA by partner country and region

Notes: see page 141.

Our top five expected bilateral aid recipients in 2012‑13 are all from Asia and the Pacific — Indonesia, Papua New Guinea, Solomon Islands, Afghanistan and Vietnam. Further details are provided in Section 2.

On current projections, in 2012‑13, spending on:

  • Saving lives through health and water and sanitation, will account for over 18 per cent of total ODA;
  • Promoting opportunities for all, including education, gender and disability, will account for 21 per cent of total ODA;
  • Sustainable economic development, including food security, economic development, climate change and the environment, will account for 27 per cent of total ODA;
  • Effective governance will account for 18 per cent of total ODA; and
  • Humanitarian and disaster response will account for 10 per cent of total ODA.

See Diagram 3 below. Further details are also outlined in Section 4.

Diagram 3: Estimated ODA by strategic goal in 2012‑13

Diagram 3: Estimated ODA by strategic goal in 201213: saving lives 18%; Sustainable economic development 27%; cross cutting 6%; effective governance 18%; humanitarian and disaster response 10%; promoting opportunities for all 21%

Most (92 per cent) of Australia's ODA is provided through AusAID. This is made up of: (i) administered funding for country and global programs; and (ii) departmental funding for AusAID's operating costs in managing the aid program. Of ODA expenditure by other government departments, almost one quarter relates to overseas policing activities conducted by the Australian Federal Police.

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