2009-10 International Development Assistance Budget
The 2009-10 Budget underlines the Government's ongoing commitment to increase Australia's Official Development Assistance (ODA) to 0.5 per cent of Gross National Income (GNI) by 2015-16.
Australia's ODA/GNI ratio is forecast to increase to 0.34 per cent in 2009-10, up from 0.33 per cent in 2008-09. It is expected to reach 0.40 per cent in 2012-13.
New Budget measures are directed towards responding to the needs of developing countries and communities adversely affected by the global recession and continuing food insecurity. New initiatives will also support longer-term development and capacity building efforts.
These measures reflect the Government's view that it is in Australia's interests to help support economic growth and stability, particularly in our nearest neighbours. This is particularly the case amid a global recession that brings its own economic and security risks.
Food security through rural development
The Government will invest $464.3 million over four years, with $38.7 million in 2009‑10, to support increases in food production globally and strengthen the ability of countries in the Asia-Pacific region and Africa to address food insecurity.
Australia was quick to respond to the global food crisis last year, making major contributions to targeted World Food Programme and World Bank trust funds. While this assistance helped deal with the immediate effects of rising food prices, addressing food insecurity is a long-term challenge requiring major investment.
The Food Security through Rural Development measure will help lift agricultural productivity in developing countries by working with other donors and research institutions using environmentally sustainable approaches. It will also improve rural livelihoods by improving the functioning of markets in ways that increase job opportunities and incomes for the rural poor.
The measure will also support social protection mechanisms to enable vulnerable people to better deal with natural and economic shocks.
Poor infrastructure is a major constraint on economic development. The global recession has already seen infrastructure projects in the Asia-Pacific region put on hold due to lack of finance.
Of the 3.8 billion people in the Asia-Pacific region, over half do not have access to sanitation and an estimated one billion people still lack electricity.
The Government will invest $454.2 million over four years, with $11.9 million in 2009‑10, to fund high priority infrastructure needs in developing countries. This will help economic growth and lay the foundation for more rapid recovery from the current global financial and economic crisis.
Making faster development progress in the Pacific
Following the Prime Minister's 2008 Port Moresby Declaration, Australia is establishing Partnerships for Development to achieve better development outcomes in the Pacific, including more rapid progress towards the Millennium Development Goals.
Through the Pacific Partnerships for Development, Australia will provide increased development assistance in response to commitments by Pacific nations to improve economic and financial management, to better manage essential infrastructure and achieve better outcomes in basic health and education.
The Government will increase Australia's aid to the Pacific and Papua New Guinea in 2009-10 to $1,091.9 million. Two important components of this increased assistance will be new budget measures on performance-linked aid and accountability and responsiveness of government. These measures build on other support for improved management of infrastructure, land and public sector resources introduced in the 2008-09 Budget.
Under Pacific Partnerships for Development, the performance-linked aid measure will support progress towards partner government reform priorities though additional assistance which recognises partner countries' improvements in areas such as the quality of public expenditure, the proportion of budget addressing development priorities, the integrity of public accountability systems or the effectiveness of revenue collection.
Enhancing Australia's engagement in other regions
The 2009-10 Budget will enhance Australia's international engagement and support a more active role in responding to international challenges by boosting development cooperation in regions beyond the Asia/Pacific.
Australian ODA to Africa will increase to an estimated $165.2 million in 2009-10. This funding will help make progress towards the Millennium Development Goals in African countries, with a particular emphasis on the high priority areas of maternal and child health, food security and water and sanitation. It will also support an increased number of scholarships.
The Government is also committed to helping rebuild a democratic Zimbabwe.
Australian ODA to South Asia will also increase to around $150.1 million in 2009-10, with a particular emphasis on improved health and education.
Australia will also increase its non-military development efforts in Afghanistan and Pakistan, providing over $650 million over four years in non-military ODA. Improving development and stability in these two countries is critical to Australia's national security interests.
Increased development and humanitarian funding in Afghanistan will build upon the reconstruction program carried out by the Australian Defence Force in the Oruzgan Province. Australian assistance will also support the World Bank's Afghanistan Reconstruction Trust Fund, which focuses on supporting rural development, local governance, education and access to microfinance.
Increased development funding in Pakistan will be extended to the border regions with Afghanistan to bolster counter-radicalisation efforts and provide increased funding for improved food security, rural development and national and provincial governance
The Government will also fulfil its election commitment for a debt to health swap with Indonesia through this Budget. Australia will cancel debt owed by Indonesia in parallel with Government of Indonesia investment in programs combating tuberculosis.
Multilateral efforts to stimulate economic growth in response to the global recession
With weakened global financial markets, major development banks like the World Bank and the Asian Development Bank (ADB) must step in to help developing countries minimize the adverse impacts of the global recession and reduce poverty.
Along with other international shareholders, Australia will contribute to a general capital increase for the ADB. These contributions will replenish the ADB's Ordinary Capital Resources, enabling a significant expansion in lending to developing member countries.
Australia's contribution to the capital increase will involve a paid-in component of around $US197.6 million over 10 years. Australia will also take up an uncalled capital subscription of $US5.6 billion which would only be drawn down in the unlikely event that the ADB is unable to meet its financial obligations. Founded in 1966, the ADB has never drawn on its callable capital.
This concessional finance will help governments in developing country fund priority national development projects essential to restoring economic growth.
Courtney Hoogen (Mr Smith's Office) 0488 244 901
Sabina Curatolo (Mr McMullan's Office) 0400 318 205
'Alopi Latukefu (Mr Kerr's Office) 0411 622 531
AusAID Public Affairs 0417 680 590