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13 February 2019

With Jonathan Pearlman

Why foreign aid?

Earlier this week, a grazier affected by the recent floods in Queensland pleaded for support, asserting that the government should assist Australians rather than spend money on foreign aid. This is a familiar refrain, and it was soon echoed in national headlines. But it perpetuates a series of common misperceptions about aid: that it is wasteful, that it produces no return, that Australia is a generous donor, and that it should be the first item in the federal budget to be cut. 

Unfortunately, such sentiments are regularly reiterated in Canberra. Finance minister Mathias Cormann, for instance, recently boasted of an $80 billion long-term cut to foreign aid – a “saving” which has already left Australia with its lowest ever level of aid spending as a proportion of the budget.

On the day the grazier made her appeal, the Australian Financial Review revealed that Australia was paying $20.8 million a month to a little-known firm, the Paladin Group, to provide security for 422 refugees on Manus Island. “On a daily basis it now costs the Australian government over $1600 to house each refugee on Manus, not including food and welfare services, more than double the price of a suite at the Shangri-La Hotel in Sydney,” the newspaper reported. Clearly, if Cormann wants to rearrange Australia’s spending priorities to find new funds for Queensland farmers or for a return to surplus, there are other sources of savings than cuts to the aid budget. 

Foreign aid, despite its show of goodwill, is not a one-way handout. It delivers Australia some very direct benefits, including avoiding the risk of failed states and enabling increased trade. According to a 2017 study by Australian National University researchers Sabit Amum Otor and Matthew Dornan, every dollar that Australia spends on aid in Asia leads to a long-term increase of $7.10 in exports to the recipient country. Australian aid is also crucial to shoring up its reputation and influence abroad. This was on stark display last year when Canberra began to boost funding for small Pacific nations, despite freezing the overall aid budget. The sudden show of apparent altruism – Pacific aid then went from $1.1 to $1.3 billion this year – was in response to concerns about China’s growing interest in the region. 

There is also the most immediate and important role of Australian aid: alleviating suffering and poverty. Earlier this month, I travelled to refugee camps in Jordan and Lebanon, where Australian aid is keeping eleven-year-old Syrian refugees from having to work in factories, and is helping to ensure that families who fled to Lebanon receive their monthly food stipend of US$27 per person. (I was on a trip organised by Save the Children and funded by the Bill & Melinda Gates Foundation) Supporting the estimated 5.6 million refugees from the Syrian war – ensuring that they can live, go to school and envisage a future beyond a UNHCR-issue tent – is a global humanitarian imperative. Australia has a role to play in these efforts, not least because, measured by wealth per person, it is the world’s second-richest country after Switzerland. 

For those who need a more hard-headed rationale, it is worth noting that Australia has an interest in ensuring that this volatile region remains as stable as possible. Australia is not immune from the effects of migration crises and outbreaks of extremism that have originated in the Middle East. 

Finally, there is the assumption that Australia’s aid program is large. A Lowy Institute poll last year found that Australians on average think 14 per cent of the budget is spent on aid, but that the government should instead spend 10 per cent. Actually, the aid program accounts for 0.9 per cent of budget spending. 

As Cormann proclaimed, Australia’s aid spending has declined since 2013 and will fall further over the next three years, leaving it at a new low of about 0.19 per cent of gross national income (the average among developed countries is 0.31 per cent, though some such as Britain give 0.7 per cent or more).

When disasters strike Australia, Canberra ought to support those in need. But this should not be at the expense of the nation’s international and moral priorities. The federal government spends far less on aid than most people think – and a brief flip through the budget papers, or the latest national audit office reports, will quickly reveal that there are much more efficient ways to find savings.


Is Australia wise to pick sides in US–China trade war?

“Why is Australia’s ambassador to the US, Joe Hockey, seemingly urging Trump to go harder? . . . Is it prudent for Australia to be advocating that an unpredictable leader such as Trump, without a consistent view as to what he is seeking to achieve and what is achievable, should go harder in the US trade war with China?” Mike Callaghan, The Interpreter (Lowy institute)

How a princess entered, shook and left Thai politics in one day

“Ubolratana’s candidacy, everybody assumed, was going to be a home run, especially given how difficult it was going to be for anyone to campaign against a candidate who cannot be legally criticised . . . What is definitely clear is that five years of military rule has not achieved any of its declared objectives – to resolve political tensions and pacify the country.” Claudio Sopranzetti, Al jazeera

Brexit and EU sanctions threaten to push Cambodia into economic crisis

“Hun Sen’s fallout with the West comes as Phnom Penh is strengthening diplomatic ties with Beijing, which has resulted in huge grants and military aid packages.” George Wright, Nikkei asian review


Until Jacinda Ardern visits China, questions about the relationship will only deepen

“There is no doubt that the relationship is in a difficult state, and many in media and foreign affairs circles are on the lookout for any sign that China is punishing New Zealand.” Hamish Rutherford,

“We seized our island back from the navy”

“The villagers, who are Tamil, say they were forcibly settled on the mainland in Iranamata Nagar, between the cities of Jaffna and Mannar. They say they have not been allowed to return to the island since. The navy denies this.” Ayeshea Perera, BBC News

Free from Australian Foreign Affairs

What does China want? Xi Jinping and the path to greatness

“The communist leaders of the PRC have an overriding existential desire: to stay in power. Some would say that this is true of politicians the world over, regardless of the political system. In some regards it is, but in the PRC there is no mechanism such as an election to cast aside one party, nor is there an alternative political party to turn to if the current one is deemed incompetent or unwanted.” Linda Jakobson, HERE



The systematic assimilation policy of Chinese authorities towards Uighur Turks is a great embarrassment for humanity.

Hami aksoy, foreign ministry (turkey)

A country that oppresses its own people rarely stops there.

mike pence, vice president (United States)

Let people of all ethnic groups feel the Party’s care and the warmth of the motherland.

xi jinping, president (china)

Sources: SBS News, Hudson Institute, Xinhuanet

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