Australia downplays COVID-19 relief in ODA budget for unclear reasons

By Will Dickson

On May 11th, 2021, the Morrison Government announced an AU$4 billion Official Development Assistance (ODA) budget for 2021-22. An additional AU$335 million will be allocated to address the regional effects of the COVID-19 pandemic but these funds are presented purely as temporary grants and supplements entirely separate from Australia’s ODA although such grants would normally be included as part of an ODA budget.

This same accounting practice was used for a similar COVID-19 relief package in 2020-21 and thus described in the Australian parliament’s budget review last year:

“These [COVID-19 response] measures effectively increase Australia’s total aid expenditure to $4.2 billion in 2020-21, but for reasons not entirely clear they will not be counted as ODA. Long-time aid observer, Australian National University academic Stephen Howes, has suggested that the Government is ‘trying to keep the increase in aid hidden… to continue to be seen to be tough on aid’, or that it ‘does not want to be seen to be providing a permanent boost to aid.”

Aid spending by Australia has declined by 28% since the center-right Liberal-National Coalition, led by current Prime Minister Scott Morrison, came to power in 2013.

The majority of Australia’s AU$4 billion ODA will be spent in its own neighborhood in order to secure a resilient Indo-Pacific region. AU$1.44 billion will go to support Pacific nations, and AU$1.01 for countries in East and Southeast Asia. While the amount of Australia’s ODA has essentially remained the same since 2019, most countries in the Pacific will see an increase in funding this year in order to fund “the delivery of critical health and education services, budget support and job creation.”

However, in alignment with the freeze on spending, increased aid to these nations means dramatic cuts to others. In South and West Asia, funding for Afghanistan, Bangladesh, and Pakistan has been the hardest hit. In fact, Australia ceased all bilateral aid to Pakistan last year although AU$11 million will still be spent on regional and humanitarian programs in the country. In sub-Saharan Africa, after a significant 48% drop in aid commitments last year, the projections for assistance in 2021-22 will decrease by a further AU$2 million to AU$59.3 million. The Middle East and North Africa have faced similar cutbacks when, in 2020, a massive 61% cut for the region plunged aid from AU$ 80.9 million to AU$31.6 million. The projections for 2021-22 stand at around AU$31.4 million. It is generally believed that the increase in spending in the Indo-Pacific region at the expense of countries elsewhere is in response to China’s growing influence in Australia’s own neighborhood

The AU$335 in temporary grants for COVID-19 recovery includes AU$162.6 to provide vaccines to nations in the Pacific and Southeast Asia, AU$100 earmarked for general COVID-19 relief in the Pacific and Timor-Leste, AU$56 million specifically for economic recovery in Southeast Asia and AU$16.7 million to provide emergency relief to India in the form of essential medical equipment such as ventilators.

In an interview on May 13, 2021, Australia’s Minister for International Development and the Pacific, Zed Seselja, spoke with journalist Kieran Gilbert about the AU$335 million in temporary relief, the country’s ODA, and Australia’s role as a donor nation. The two could not reach an agreement as to whether Australia’s foreign aid spending for the year is increasing or not, or even if the figure given of Australia’s ODA having fallen to 0.19% of GNI was accurate. Minister Seselja, speaking about the AU$335 million and the projections that aid will decline in the coming years, said:

“The money’s needed now. We’re delivering it as quickly as we can, and the bulk of that money will be spent and then it will tail off. That additional assistance, yes, will tail off. But we always said that that was temporary and targeted.”

Regardless of the exact figure, Australia’s spending on foreign aid has been on the decline for years. Ten years ago, Australia’s ODA was 0.36% of GNI and Australia ranked as the 13th most generous nation among OECD’s Development Assistance Committee (DAC) members. According to the most recent data, Australia’s ODA has fallen to 0.19% of GNI, and its ranking has dropped to 21st among DAC members despite having the 10th largest economy.