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Questions Without Notice: Aid and the budget

I move:

That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Rhiannon today relating to overseas development aid.

The response from Senator Cormann representing the Treasurer was deeply disturbing. He failed to address the question which adds to the concern that has grown since we heard the comments yesterday from the Treasurer, Mr Hockey, when he was appearing on Sky News. He said:

… the most significant individual item in the Budget is a savings measure, it's a reduction in foreign aid.

We have seen the aid budget hit—it was hit under Labor. It has been hit and reduced substantially under the coalition, but this takes it to a whole new level of being very deceptive with the public. As we could see from the minister's response, he is avoiding saying it is a cut, not surprisingly—and they can probably get away with that, because they will drive down spending and then the money saved can go back into consolidated revenue.

We need to see this in context: the foreign aid budget makes up less than 1.5 per cent of the overall budget but it accounted for 20 per cent of the savings announced as part of May's federal budget. The aid budget has become like an ATM: the place where the government dips in when they are looking for some savings.

It was disappointing that the former foreign minister, Mr Carr, did this from time to time, and the new government has taken it up with gusto. This comes at a time when poverty and alleviation should remain a top priority with this government.

It is also very worrying that, when you look at how this is playing out, we have a reduced aid budget and then we need to consider what that money is spent on. More and more, it is being spent on programs that are primarily about benefiting Australia. What this government has pushed to the top of the agenda in terms of how the aid programs are determined is that it has to be in the national interest. This has been a problem that has been identified over many years. It was previously called tied aid. In the 1990s, it became highly discredited to the point that the OECD redefined what the definition was for overseas development aid.

Again, as we see so often, governments find a way to get around things. The primary focus of Australia's aid programs has been to support the national interest. While it may not always be locked in that it has to be Australian companies, public-private partnerships are talked about, programs need to be about economic growth and corporations need to be involved. So many of these low-income countries will not be able to tender for the projects. They do not have big companies that can tender for the infrastructure projects that the government is looking to be a major part of the Australian aid budget. So, more and more, we will see the tendering decisions going to Australian companies.

We have also seen in recent times some worrying trends in the aid program with an emphasis on helping the corporate sector expand in low-income countries, all on the basis that we will have economic benefits flow through to the poor people. That whole trickle-down argument was widely discredited 10 or 20 years ago, but that is where the government has well and truly gone back to the past.

Some of the programs that have got caught up in this way of conducting aid are very damaging to local communities. Some examples of that are the land reform programs in Papua New Guinea and parts of the Pacific; and the Mining for Development Initiative, which is about opening up low-income countries to the operations of mining companies.

Just to take that first one: in parts of Papua New Guinea and the Pacific land is being registered in the name of individual owners, which breaks down the very different way that these communities work where there is collective ownership of land. Land in many ways is likened to a superannuation policy: it is always there to give support to communities. (Time expired)

Question agreed to.

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