Ben’s Blog

Peter Martin links to what you might hope was an obvious point. Will someone in both Government and Opposition please take the time to understand (and to take the lead in talking honestly with Australians) – You can be serious about tackling climate change or you can be “serious” about reducing petrol prices. You can’t do both.

Up #1

The biggest unambiguous positive in the aid budget for mine was the $300 million over 3 years announced for additional investment in water and sanitation programs. Policy-wise it’s a vital area of development concern that has been largely neglected, and which offers enormous human and economic benefits.

Unsafe drinking water and inadequate sanitation and hygiene causes around 90% of the 1.8 million deaths from diarrhoeal disease that occur in developing countries each year. Missing out on these basic rights causes illness, increases the labour burden for women (who spend much of their time collecting water and caring for sick children), and degrades human dignity for the more than 1.1 billion people who don’t have safe drinking water, and more than 2.5 billion who don’t have even basic sanitation.

Achieving the MDG targets to halve the proportion of people without access to safe drinking water and basic sanitation (MDG 7) would not only save lives and improve public health, but would increase female participation in education (girls are more likely to attend schools where there are adequate and private toilets), and enhance economic productivity. In fact, the World Health Organisation estimates that every $1 invested in the provision of water and sanitation leads to $8 in costs averted and productivity gained.

All the citizen lobbyists who were at Micah Challenge’s Voices for Justice lobbying event in Canberra last year made this a key policy ask, so I’m particularly glad to see the Government acting on this commitment early.

Up #2

The Government announced $200 million over 4 years for “UN partnerships for the Millennium Development Goals”. This amounts to an increase in the core funding provided to 6 UN agencies with key responsibilities for coordinating efforts on gender equality, sustainable human development, HIV/AIDS and other health challenges, and humanitarian emergencies. I’m sure the additional funds will be very welcome ($50 million a year on average, shared between 6 agencies) and it will lift our core funding for some of these agencies from very, very low levels.

Up #3

Pacific partnerships will get some significant new money soon ($268 million over 4 years for land related programs, infrastructure development and public sector administration improvement) though only $18 million is spent in 2008/09.

Down #1

Half of the increase from last year’s budget is accounted for by the third and final tranche of Iraqi debt cancellation. I have no argument with cancelling debt in order to promote development and/or humanitarian reconstruction. In fact, I think we should do more. But this cancellation for the third year makes up close to the bulk of the aid increase, overshadowing development of new programs or greater investment in current programs.

Down #2

The budget announced “increased attention to the global challenge of climate change” which sounds great – though the attention deficit left in this area by the previous Government made that a pretty easy call you would think. However, the $150 million over 3 years for research into vulnerabilities and impacts and implementation of high priority adaptation needs translates into $35 million this year. That’s just a shade above last budget’s $32.5 million for climate partnerships which, at the time, I described as derisory.

I haven’t changed my mind on that with a change of government. I acknowledge that there are not yet clear mechanisms for delivering massively scaled-up adaptation funding. But climate change is already affecting the poorest communities in our region. Subsistence farmers are struggling to cope with changing rainfall patterns, small-island and coastal populations are being displaced, or facing heightened risk of displacement because of rising sea levels, and climate-related disasters have increased in frequency and intensity.

Australia could easily increase this spending by an order of magnitude, and if specific proposals are needed, how about making contributions to the disgracefully underfunded adaptation funds that already exist? Or working with the Least Developed Countries in our region to fund and support the development of their National Adaptation Plans of Action (NAPAs) and the implementation of the highest-priority adaptation responses identified in those plans?

Neither-up-nor-down #1

Overall, the budget didn’t really add any new resources or strong new focus in the fight against global poverty. The sectoral spending increases are fairly minor. Here’s the sectoral breakdown:

When inflation is factored in, this is a slight real decline in education spending (-0.5%), and a very modest real increase in health spending (0.9%) which should surely be two priority areas to accelerate progress on the MDGs.

Here’s a little graph showing the trend for Australia’s aid budget as a proportion of our Gross National Income (Australia, along with all other developed country donors, has repeatedly committed to increasing its aid budget to 0.7% of GNI)

• The solid blue line shows the actual budgeted amounts during the last term of the Keating Government, the Howard years, and now the first aid budget for the Rudd Labor Government.
• The dotted blue line shows the expenditure the Government projects over the next three budgets (bringing aid to 0.38% GNI in the 2010/11 budget)
• The dotted red line shows the trajectory that would have to be followed by whoever is elected in 2010 or 2011 in order to meet Rudd’s commitment to reach 0.5% GNI by 2015
• The dotted green line shows a straight line trajectory to reach 0.7% GNI by 2015, with increases kicking in next budget

A few things I notice:

Backloading

The forward estimates to 2010 propose a tailing off in the rate of increase for the aid budget. This is simply because the new Government decided to make no new aid commitments in the life of this Parliament and simply match Howard’s plan to get to roughly $4.3 billion by 2010. They may do a bit better than this, but they are clearly not pushing the envelope.

This has consequences for whoever is elected after 2010, and consequences for our development partners and the poor in our region. By “backloading” most of the aid increase for the period 2010–2015, this Government is leaving most of the heavy lifting for a new Goverment – whether a returned Labor Government, or a newly elected Coalition one. The trend they are establishing will not reach 0.5% GNI by 2015 if it is continued, so a more rapid scale-up will be required after 2010. But the later these new investments are left the more room there is for the Government to find them politically or financially too difficult.

Backloading also reduces the contribution these planned increases can make to Millennium Development Goal progress by 2015. Money invested in 2011, 2012 and beyond will still have a positive development outcome if it is used well, but it will have little influence on progress against the 2015 MDG timeline. Although the Rudd Government has promised major new focus on the MDGs, and 2008 has been nominated as the critical year for action to accelerate progress, there is no new investment beyond that planned by the previous Government until after 2010.

Global leadership?

With European donor commitments to lift their aid budgets to 0.51% GNI by 2010 and 0.7% by 2015, the Government’s own timetable will still leave Australia 15th of 22 OECD donors, measuring aid as a proportion of GNI. Even the planned increase leaves us in the bottom third of donors. The 0.7% trajectory I’ve mapped is ambitious, but can be achieved and the money used effectively if we have more substantial engagement within our region and beyond (particularly increasing our commitment to Mekong and South Asian countries) and with multilateral bodies such as UNAIDS, the Global Fund to Fight AIDS, TB and Malaria and the Education For All Fast Track Initiative, for example.

The budget has been handed down – an expression, incidentally, that I love. It’s a bit Charlton Heston as Moses in The Ten Commandments really. Well, if Moses had begun each commandment with “Mister Speaker, in order to support working families…”

I’ll leave it for others to opine on how Swan and/or the Rudd Government have passed their “first big test” with the budget overall. I don’t do tax cuts or infrastructure funds or baby bonuses, just the aid budget… In a nutshell:

• Aid increases to $3.66 billion in 2008/09 – up $505 million from the 2007/08 budget (an increase of 9% in real terms)
• $238 million of this increase is accounted for by the Government cancelling the final tranche of debt owed to us by Iraq
• So, not counting Iraq debt, the real increase is 4.9% on last year’s budget
• Aid will reach 0.32% of Gross National Income (a level it was last at in 1995/96) – up from 0.3% GNI last year, but still less than half the internationally-agreed aid target of 0.7% GNI Australia has committed to
• The budget begins to deliver on the Government’s pre-election commitments to increase funding to water and sanitation ($300 million over 3 years), eliminating avoidable blindness in the region ($45 million over 2 years), and establishing Pacific partnerships for development ($127 million over 4 years for a regional infrastructure facility and $54 million over 4 years for a Pacific Land Program to address land reform challenges)
• There are some further, modest increases in funding for UN agencies and other multilateral bodies

My first response is that this is quite underwhelming. Is the aid program getting bigger? Yes, but sloooowly. Is it getting better? Yes, but sloooowly. And any of the fresh thinking or new leadership focused on the urgent task of accelerating progress towards the MDGs will have to wait.

I recognise that the Government must have faced serious challenges developing the budget while still to a large extent developing the policy and planning the programs it wants to invest in. But anyone who heard the Prime Minister say:

Today I announced that Australia would be signing on to Prime Minister Brown’s Millennium Development Goals (MDG) Call to Action.
We support its aim of working for accelerated progress towards the MDGs.

could justifiably be disappointed.

More shortly.

So tonight is the Australian economy’s night of nights, the budget! I’m in Canberra ready and waiting for the AusAID budget lockup. Phones are confiscated, wireless-enabled laptops disallowed, so that AusAID officials can brief us on the wonders of the aid budget with no chance of leaks before Wayne Swan has delivered the full budget speech.

Of course, it’s always difficult to actually find reporting on the aid program in any budget coverage, but I’m sure there’s a good reason for all the secrecy.

Expectations are low for this budget, because although the new Government seems to have a stronger commitment to the Millennium Development Goals, and has committed to increase the aid program to 0.5% of Gross National Income by 2015 (should we elect them again, and then once more), they made no additional aid commitments for this budget year. And in the context of a “responsible budget that looks after working families” there’s not likely to be much beyond maintaining the increase trajectory set by the previous Government, and possibly beginning the process of reallocating funds to their new priority programs of water and sanitation and basic education.

Of course, an additional increase should be considered for this and future budgets to lift our aid spending to the internationally-agreed aid target of 0.7% GNI by 2015. Our aid spending has languished for so long, our partners and multilateral bodies have the capacity to manage the increase, and its the level we need to reach if Australia is to contribute its fair share to achieving the Millennium Development Goals.

And the nice thing is that additional spending through the aid program is – as well as the right thing to do! – both an investment in the human and economic development of our neighbours and non-inflationary to boot!

So, I say:

This time the tunes that got me down the mighty Hume and the Federal Highway were: Arvo Pärt’s Fratres for piano and cello as well as his Lamentate. The piano and percussion in this piece, coupled with the strings, range from delicate and haunting to very forceful, stirring and almost strident. It’s great driving music actually.

I also played not one, but two, Eels albums: Beautiful Freak and Daisies of the Galaxy. I really like the Eels’ quirky sensibility, the offbeat narratives of loss and exclusion that sit back to back with upbeat celebrations of the rich weirdness of life. E’s voice, too, just works brilliantly well with the music he sings – a combination of gruff ordinariness and fragility.

John Howard spoke at a Liberal Party fundraiser last night.

Rage against opposition. Work as hard as you can to get out of opposition as soon as you can.

“Opposition is a dismal position in politics. I had my share of opposition, I had 13 years of it, and I hated every year of it, I hated every week of it.

He also opined sagely that a Federal Coalition Government would “come again”, which sounds almost Messianic, but is really just a trite observation about Australian political reality. How long it will take might be an interesting question, but that it will happen sometime is unarguable.

Even within the confines of a short – and selectively-quoting – news story, though, this strikes me as appalling. How about, “Opposition is a hard, bitter, but absolutely critical role in a functioning democracy? What we are after is not the power of Government for its own sake, but the best policy outcomes, and the best provision of Government services, for the Australian community. I may not have enjoyed Opposition, but I relished every opportunity to hold the Government accountable for its actions. The Australian people expected no less, and they will expect no less of us now.”

Which may be what he meant. But certainly doesn’t appear to be what he said. It’s not about the policy. It’s not about accountability. It’s all about the power.