Budget 2007-2008

Performance Incentives

To encourage faster and more sustainable economic and governance reforms, the Government has budgeted $115.6 million over two years to provide performance incentives to selected partner governments when they achieve reform milestones.

Following successful trials in Papua New Guinea and Vietnam, performance agreements are expected to be developed with the Philippines, Indonesia and Vanuatu. Existing arrangements with PNG and Vietnam are expected to expand under this initiative.

Milestones will be agreed for priority reforms in areas such as basic education, improved budget management, utility regulation, private sector development and sub-national government administration.

Additional Australian support that partner countries receive by meeting agreed milestones will be directed toward priority sectors such as roads, health and education.

The growth prospects of many of Australia’s development partners depend on them improving institutional performance and implementing better policies. Slow or stalled reform of institutions or lack of policy improvement constrain development and the effectiveness of Australian assistance.

Media Inquiries: Mr Downer's office 02 6277 7500 - AusAID (Public Affairs) 0417 680 590