Australia’s Foreign Aid Budget Has Never Been Lower And Most Aussies Don’t Know It

Here's why it's a whole thing.

Australia’s foreign aid budget currently sits at 0.23 per cent of our Gross National Income (GNI). That is, embarrassingly enough, the lowest it’s ever been in Australia’s history.

However, most Australians don’t realise just how small our contribution is, with 44 per cent of people thinking our aid budget is larger than it actually is and 43 per cent not knowing the figure at all.

Our small aid contribution is often justified by representing aid as something that is not an essential expense. Rather, it is seen as something we should contribute to only when we are in a good position to do so.

But actually, aid plays a fundamental role in helping economies grow and develop.

Foreign aid is different to charity. Rather than simply being a generous donation, foreign aid is about investing in an economy with a hope of some kind of return.

Australia’s foreign aid doesn’t simply aim to provide food and medical assistance to those who need it (although that is super important). Rather, it aims to fund development projects that are vital to economic growth.

For example, a key objective of our aid program in Indonesia is building infrastructure to facilitate trade. As Indonesia is currently our 12th largest trade partner, such infrastructure benefits Australian trade almost as much as it benefits Indonesian economic growth.

Another fundamental component of our foreign aid program is giving Indonesian students the opportunity to study in Australia via scholarships. International students contribute $15 billion to Australia’s economy, making this our fourth largest export. Their economic contribution far exceeds the cost of their tuition fees, so we’re essentially just helping ourselves.

Yet, in the last two budgets, our foreign aid contribution has been successively slashed, leaving "no poor country or region… unscathed”, according to Oxfam Australia’s chief executive Helen Szoke.

In the past, our foreign aid budget has also been diverted to fund our refugee policy, making Australia the third largest recipient of its own foreign aid.

Despite this, a discussion of Australia’s foreign aid contribution is not on the national agenda this election. So why is it that Australian voters are not especially concerned about our investments overseas?

According to the Lowy Institute and the EMC, those who do not know how much we give in aid are more likely to think we should make cuts to the foreign aid budget. This explains why there is very little anger when the government announces cuts to an already miniscule contribution.

So, when we’re told that we’re spending more money than we have and that we need to cut back, 79 per cent of voters point to foreign aid.

Most aid advocacy groups argue against this from a moral point of view. They talk about how the UN requires developed countries (like Australia) to commit at least 0.7per cent of GNI to foreign aid. And they talk about how these cuts are inconsistent with the narrative of mateship and comradery that defines Australian culture (just look at any bad Australian film, and that theme will be there).

But investing in the economic wellbeing of our neighbours not only helps Australia build relationships with vital growing economies, it also ensures that, in the long-term, Australia is in a more prosperous position.

Cutting foreign aid doesn’t just have a devastating impact on the world’s poor; it can also severely impact Australia’s growth.

Reversing these cuts would not only allow Australia to meet its moral responsibility, it would also be a much-needed display of economic foresight that would benefit us in the near future.

Susan Alfayadh is one of Student Edge’s student contributors. Learn more about the contributors program.

Photo: iStock.