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Aid cuts: how do they affect us?

By Revd Dr Bob Mitchell, CEO, Anglican Overseas Aid

In his recent Federal Budget speech, the Australian Treasurer, Joe Hockey, confirmed that the aid budget for the coming year is being cut by $1 billion.

This is part of a broader program of cuts, some of which have already been made and some that will be implemented over the coming years. In total, since coming to office in September 2013, the Government has announced overall cuts to the aid budget of a staggering $11 billion. These cuts reduce Australian aid to its lowest recorded levels.

To put this into perspective, Australian aid makes up just over 1 per cent of the Federal Government’s budget; but cuts to aid represent more than a quarter of all the budget cuts this Government has made since coming to office. These actions take the shine off international perceptions of Australia as a generous nation.

The reaction of donors and supporters has been strong. One donor, an ex-serviceman, rang me late last year to express his deep concern and disgust at the announced cuts. He advised me that he was going to write to the Federal Government to return his war service medals.

His view was that cuts of this scale and severity go against the values of the Australian people and that a symbolic protest was called for.

The impact on our work

While the $1 billion cut to Australia’s aid budget for the coming year is deeply disappointing, we are grateful that the main Government funding mechanism for Australian aid organisations, called the Australia NGO Co-operation Program (ANCP), will only receive a 5 per cent cut. With the number of agencies eligible for this funding increasing this year, the amount we receive will be reduced by just under 8 per cent. (For more information about how the ANCP scheme works, see the item below).

We are extremely grateful to the Government for recognising the high-quality and crucial work done by

Australian NGOs such as Anglican Overseas Aid and for minimising the impact of the budget cuts on existing projects that we run, particularly projects that are part-way through and need time to become sustainable.

Overall, this is much better than we had feared, and the good news is that thanks to careful forward planning, we have been able to absorb these cuts and ensure minimal impact on our partners and their work in the coming financial year.

We are also delighted that our vitally important maternal and child health work in Kenya and Ethiopia – which is funded separately from the ANCP scheme – has been fully funded for the coming year, the final year of committed Government funding. Beyond this, however, the program is in grave doubt without finding a new funding source.

My concern is that foreign aid is regularly raided, by both sides of politics, because it is politically expedient. Cutting or redirecting foreign aid doesn’t require legislative support in the Senate and the consequences are felt far from home.

Development spending should not be seen as a piggybank to be raided. It should be seen as a fundamental moral commitment that is part of being a globally responsible, wealthy nation. From a Christian perspective, Jesus calls us to love our neighbour, and in a globalised world, this means both at home and overseas.

So while we express our gratitude to the Government for minimising the impact of the cuts on our work in the coming year, we also need to keep our eyes on the bigger picture. A $1 billion cut is not small, and it will have an ongoing impact on the lives of the poorest people around the world.

To respond, you could do the following:

  • Join the Campaign for Australian Aid (more information below).
  • Visit your MP or Senator, or write to them, to express your support for the good work that the aid budget funds around the world.
  • Donate to our Helping in Hard Places Appeal to help us maintain and expand our life-changing work.

The Campaign for Australian Aid

The Campaign for Australian Aid is a joint initiative of the Micah Challenge and Make Poverty History coalitions for all Australians who believe we can and should do more as a nation to end extreme poverty around the world.

Find out more and join the campaign.

You can also follow along on Facebook and Twitter.

Anglican Overseas Aid is a member of the Micah Challenge coalition.

 

How much aid money do we get, and why?

The primary way that the Australian Government directs aid budget funds to the work of NGOs such as Anglican Overseas Aid is through the Australia NGO Co-operation Program (ANCP). Each year, the Government allocates a certain amount of the aid budget to the ANCP scheme. This money is then divided amongst the eligible NGOs using a predetermined formula. Whilst this involves some complicated accounting, the most important factor is that the amount of ANCP funding we receive is largely based on how much our donors are giving to us for our work overseas. Within ANCP, every dollar from the Australian public for our overseas programs is matched by $5 from the Government. In short, the more that you donate, the greater percentage of Federal Government funding we will be able to access through the ANCP scheme. In a climate of reducing aid budgets, if donations from the public fall, our funding from the Government falls even further.

 

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