COVID-19 and Aid: New Global challenges

Tremendous progress has been made in recent decades as the world increased its focus on the problems of global poverty.

Since 1990, extreme poverty has been slashed by almost three quarters; child mortality by almost two thirds; and the world has been stepping up to liberate people trapped in slavery.

But, devastatingly, COVID-19 has threatened to undo years of progress on global poverty.

  • The COVID-19 pandemic is estimated to push an additional 88 million to 115 million people into extreme poverty this year, with the total rising to as many as 150 million by 2021.
  • Global human development could decline this year for the first time since the concept was introduced in 1990.
  • The World Food Programme has warned that the number of people requiring lifesaving food assistance could double to 265 million people worldwide.

How much does Australia give to aid? 

In the 2020 Federal Budget, it was revealed Australia’s on Aid as a proportion of our Gross National Income would remain the same as in FY 2019-20 at 0.21% of GNI.

The newly announced COVID-19 Recovery Fund, worth $304.7m for the Pacific and Timor-Leste over two years, was not counted as ODA by the Australian Government.

For a thorough break down of what else was in the Federal Budget on Aid watch here:

 

 

Our History on Aid

From 2000 until 2013, Australia’s aid program reflected the global trend, and was on a steady upward trajectory – both in real dollar terms and as a percentage of GNI.

Between 2007 and 2013, the rate of increase reached 7% per year, rising from $3 billion to $5.6 billion. Australia’s generosity in aid rose to 0.33% GNI, and the aid program enjoyed bipartisan support for an aid target of 0.5% GNI.

However, from 2014-2019, Australia’s aid program experienced unprecedented and consistent cuts. The largest single year cut occurred in December 2014, with a massive funding slash of $1 billion, equivalent to 20% of the entire aid program.

Generosity graph

Australia now ranks 19th among rich country aid donors. And Australian aid generosity languishes at a historic low of 0.22% GNI, and is budgeted to continue falling.

The 2019/2020 budget revealed that total aid expenditure will fall by $117 million, with the aid budget dropping from $4.16 billion this financial year to $4.04 billion in 2019/20. 

This is because, as announced last year, aid has been frozen and will not growing in line with inflation, until indexation is resumed in 2022-2023. 

This means Australia’s aid budget has fallen from $5.05 billion in 2013/14 to $4 billion in 2019/20. And with this latest announcement, Australian aid will remain at its least generous level ever.

Australia will now give just 0.21% of our Gross National income to combating poverty worldwide.

That’s just 21 cents in every $100 we make as a nation. This will drop to 19 cents in 2021-22, before indexation kicks in 2022-2023. 

To put this in perspective, Australian Aid was at its most generous level ever in the 1960s. And that was under a Liberal Party Government who gave 0.48% of GNI to Australian Aid.

The Australian Government justifies these cuts pointing to a tight fiscal position and rising Government debt. However, Australia is one of the least indebted countries amongst all official aid givers (with net government debt set to peak this year at just 19.1%). The only countries with comparative debt levels that give less aid than Australia are the Slovak Republic and Korea.

These countries have significantly lower incomes (33% and 55% respectively, when measured by GDP per capita) and they are both former aid recipients that have only recently graduated to become aid donors. Australians are the wealthiest people on the planet, when measured by median wealth; the Australian budget is set to return to surplus in this coming financial year; the nation has had the longest run of uninterrupted economic growth in the developed world and Australia, has relatively low Government debt.

Foreign aid as GNI graph

Micah believes that compassionate generosity reflects the values that Australians hold dear.

Compassionate generosity is also consistent with the kind of nation Australia aspires to be. As one of the most prosperous and least indebted developed nations in the world, Australia is well placed to be a world leader in terms of generosity towards its global neighbours.

The International Aid Target

Since 1970 there has been a broad consensus amongst the international community that rich nations (of which Australia is one) should aim to give 0.7% of their gross national income (GNI) in aid. This target has been reaffirmed many times since, including at the discussion surrounding the MDGs in 2002 for the Monterrey Consensus, and then again in the lead up to the SDGs in 2015 at the Addis Ababa Action Agenda on Financing for Development.

Since 2000, the world’s rich nations – in response to these global development challenges– have been collectively stepping up their aid giving. Aid in recent years has been at a record high, reaching 146.6 billion USD in 2017 – more than double the aid given at the start of the MDG period in 2000. Six official aid giving nations have achieved the target set in committing to both the MDGs and SDGs, and contribute 0.7% of their GNI to aid. These include the United Kingdom, Sweden, Norway, Luxembourg and Germany.

Even amidst tight austerity measures, in 2013 the UK’s conservative Government reached the 0.7% target. In 2015, the UK enshrined this international aid target of 0.7% in legislation.

In the face of those calling on him to slash the aid budget, the then Prime Minister, David Cameron, famously said, ‘We will not balance our budget on the backs of the world’s poor’.

What Should Australia be Giving?

Australia can and should do more. As one of the richest and least indebted aid giving nations in the world Australia, should be a leader in aid generosity. It’s time to begin moving in this direction.

To achieve this ask, Australia would need to scale up its aid program to approximately 0.295% GNI by 2021-22.

Italy currently ranks 14th amongst the 29 members of the Organisation of Economic Cooperation and Development Assistance Committee, with an official aid to GNI ratio of 0.2946%.

This ask is consistent with the Australian Council for International Development’s call to rebuild the aid program to 0.33% of GNI in the next 6 years, starting with a minimum increase to the aid program of 10% per year.

Australia should return to the top half of rich country aid donors by the end of the next parliamentary term.

Australia should commit to achieving the internationally agreed aid target of 0.7% by 2030.

What can I do? 

Tell you local MP that you care about the world's poor and Australian Aid!

There are a few ways to do this, but the most effective way is to organise a face-to-face meeting with them.

We have guides to help you do this.

Please contact info@micahaustralia.org

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