An Effective Aid Program for Australia: Making a real difference - delivering real results

Launch of the Independent Review of Aid Effectiveness and the Government's response

Parliament House, Canberra

Speech. Check against delivery, E&OE

6 July 2011

Australia's global and regional engagement is broad.

We are alert to challenges to our security — state based, or in other forms such as terrorism.

We are alert to the challenges to our economy — through the instability of the global financial system, the increasing interconnectedness of global trade and investment.

We are deeply engaged in responding to threats to our national environment — for example through climate change.

We are charged with a responsibility to look after the wellbeing of more than one million Australians who travel abroad each year.

This is the range of what we must deal with in an increasingly globalised world where everything affects everything else.

There is, therefore, no single dimension to our engagement with the world.

It is increasingly, almost experientially, multidimensional.

And one of those important dimensions is the future of Australia's international aid program — a program that impacts on so many of our values and interests.

What we do on the aid program matters.

Not just for the individual countries that benefit, but across the full canvas of our country's global engagements.

This is why it is my great pleasure to have you here for the release of the Independent Review of Aid Effectiveness and the Government's response.

I asked for the Review last year because I felt after 15 years we were due for another look at how we effectively deliver aid, especially as we intend on expanding the aid program.

It is right that we do more to reduce poverty because Australians believe in a fair go for all.

But Australians also believe in value for money with every tax payer dollar that is spent.

That is what the release of our aid strategy today is all about — what we call An Effective Aid Program for Australia: Making a real difference — Delivering real results.

Back before the 2007 election, Bob McMullan and I had many long conversations about what sort of aid program we would like to have in the future.

We wanted one that was aligned to the Millennium Development Goals — aimed at reducing global poverty.

We wanted one that helped to stop children dying from diseases that we can easily prevent.

We wanted one that would give every child an education.

We wanted one that gave women a better deal.

We wanted one that put people first, including people with disabilities.

We wanted an aid program that was effective — one that delivered results.

And we wanted a program of which all Australians could justifiably be proud.

We wanted an aid program that involved Australians more and made a difference to people in poor countries.

And since 2007, we have been working diligently in this direction.

Just in the past couple of months Australia has been recognised internationally for our work on HIV prevention, on immunising children and on promoting the rights of people with disabilities — and I am glad to see we have members of the Disability Reference Group here with us today.

We have been recognised for helping to halve malaria infection rates in the Solomon Islands.

We already have a good program and I am pleased that the Review rates us as an effective performer by global donor standards.

But I believe Australia can and should do better to make sure we build the best aid program in the world.

That is why we intend to implement the recommendations of the aid effectiveness Review.

We adopted the Review's recommendation on the mission statement for Australian aid.

It is:

"The fundamental purpose of Australian aid is to help people overcome poverty. This also serves Australia's national interests by promoting stability and prosperity both in our region and beyond. We focus our effort in areas where Australia can make a difference and where our resources can most effectively and efficiently be deployed."

This is an important statement.

It goes to three core principles:

  1. That poverty eradication is our core objective.
  2. That as well as being the right thing to do, it is in our national security interests.
  3. We focus on those areas where we can make a real difference.

In doing so, we align ourselves with the Millennium Development Goals.

1.4 billion members of the human family (one fifth of our number) today suffer the degradation of poverty.

And two thirds of these are within our region.

We believe it is right to do what we can to help our fellow human beings out of poverty — because as Australians it is not in our nature to be indifferent to the sufferings of others.

Our belief in a fair go does not stop at the Australian continental shelf.

Our aid program is therefore a product of our values.

But we are also hard-nosed enough to do so in a manner which supports our nation's interests.

We want to build stability in our region because that enhances the security of us all.

For the same reasons we want to enhance regional prosperity because prosperous regions make for stable neighbours and they also, in time, make good economic partners.

Also, both as an expression of our values and our interests we also believe in good international citizenship.

We want to sustain and enhance an international system that deals with global changes in an orderly manner.

Through global agencies that deal with economic development. That deal with natural disasters. That deal with humanitarian conflict.

Using agencies such as the ICRC, the UNHCR, the WFP, UNICEF, the WHO, the UNDP, the World Bank, the Asian and African Development Banks.

The alternative would be absolute chaos.

Every person, and every country, simply fending for themselves through a beggar thy neighbour approach.

The massive, destabilising dispersals of peoples from one point of the world to another, of the type we have seen throughout much of world history, would continue on grander scale than ever before.

And with potentially disastrous consequences for us all.

We therefore have a deep national interest and values at stake in building a global rules-based order that deals with poverty; that deals with humanitarian representatives that deals with human rights.

Because the alternative is anarchy.

The critical theme of both the Aid Effectiveness Review and of the Government's response to it is how to enhance the effectiveness of the overall program.

We have already made a good start on this by reducing the number of technical advisers by 25 per cent over the next two years and further reducing unreasonable remuneration levels for ongoing advisers so we get maximum return on our aid dollars.

We must also maintain what the aid effectiveness review describes as the "serious and systematic approach within AusAID to fraud management".

AusAID maintains zero tolerance towards any fraud in the aid program.

In the 2010-11 financial year, the estimated potential loss due to fraud was 0.021 per cent of AusAID's appropriated funds.

In other words that is 21 cents for every thousand dollars spent.

This is a much lower rate of loss than that recorded by most other government agencies (including Centrelink), private sector companies and other aid donors.

AusAID's performance in this regard is underpinned by its seven point program for fraud management:

  1. AusAID maintains a portfolio-wide fraud control plan which complies with the Australian Government's mandatory fraud control guidelines.
  2. Country posts also maintain fraud and risk management control plans which are updated annually.
  3. Any company or non-government organisation appearing on fraud blacklists is automatically excluded from bidding for contracts.
  4. AusAID's internal audit section reviews the specific fraud control mechanisms of partners such as non-government organisations, contractor firms and tertiary institutions, to ensure they comply with its fraud reporting and risk management requirements.
  5. Partner government systems are also assessed in detail, and assistance provided, to improve identified weaknesses before any Australian funds begin to flow.
  6. The ANAO also conducts external audits of AusAID's financial statements and undertakes targeted performance audits.
  7. And in 2011, a senior executive position of Chief Auditor was created and filled within AusAID itself.

This has been a strong achievement by AusAID given so many of the countries in which Australian aid operates have weak probity systems and rate poorly on most international corruption indicators.

The Government is committed to further strengthening AusAID's already robust fraud management scheme.

Moreover, AusAID will provide a ratings system for all of its international development partners, as the United Kingdom development agency DIFD has done, in order to ensure that we maximise the use of those agencies which rate highest, and minimise the use of those agencies which are rated less strongly.

Furthermore, the Government intends to issue a new Transparency Charter to provide more accessible information on how Australian aid funds are deployed and results we achieve.

This is designed to enhance our public transparency on the achievements of the program.

And also any problems that we encounter so the public can be properly informed on how their tax payer dollars are being spent.

In addition to fraud management, AusAID also has a four point performance management system which deals with any quality challenges with the program as they arise.

This involves AusAID's own internal quality reporting system, the Office of Development Effectiveness, Australia's National Audit Office and OECD development assistance committee peer review system.

The strength of these systems was endorsed, for example, in the 2009 ANAO review that concluded AusAID has managed the expansion of the aid program in a way that supports the delivery of effective aid.

Australia has also been commended in the most recent OECD DAC peer review of the AusAID program.

To strengthen the comprehensiveness of these measures, the Government has committed that all overseas development assistance funds spent by Australia will be subject to quality process, not just those spent by AusAID.

Finally, the Government, for the first time, will develop a rolling four year whole of aid budget strategy which will also cover the aid efforts of all relevant Government agencies and do so through a single coherent plan that outlines the results we aim to achieve each year.

These results will then be reviewed formally by Cabinet each year so that Cabinet can make a strategic judgment about what programs are working and those that are not.

The Government has resolved to abolish any programs that are not delivering on their objectives or undertake immediate changes to these programs to make sure that they do.

Consistent with the Review's recommendations, the Government will make its decisions based on three sets of criteria:

  1. Effectiveness
  2. The capacity of Australian aid to make a difference, and
  3. Our national interest.

Furthermore, the Government has agreed on five strategic goals for the overall aid program:

  1. Saving lives.
  2. Opportunities for all.
  3. Investing in sustainable economic growth, food security and private sector development.
  4. Supporting security, improving governance and strengthening civil society; and
  5. Preparing for and responding to humanitarian disasters and crises.

There is a developmental continuum in this overall strategic approach to the aid program.

Unless the program begins by saving lives, for example for children under five, then there is little else that can be done.

Assuming therefore that lives have been saved, the next task therefore is to provide opportunities for all — both in education, in employment, and the opportunities to develop self-reliance.

Furthermore, none of the above can be advanced unless we have invested appropriately in sustainable economic development so that the overall economy in which poor people are living is itself developing and providing greater opportunities for all.

Once again, none of the above can be guaranteed unless there is proper governance in the overall system, within countries concerned, to provide for basic security so that individuals can go about their daily lives without fear or unnecessary impediment.

And beyond all these again, progress on any of the above can be completely undermined by inadequate preparation for humanitarian and natural disasters.

The Government has further defined ten specific development objectives that seek to give effect to these strategic goals.

Within saving lives our key development objectives are two-fold.

  1. Improving public health by improving access to safe water and sanitation.
  2. Saving the lives of poor women and children through greater access to quality maternal and child health services; and supporting large scale disease prevention, vaccination and treatment.

In promoting opportunities for all, the Government has decided on three key development objectives:

  1. Enabling more children, particularly girls, to attend school for longer and better education so they have the skills to build their own futures, and in time escape poverty.
  2. Empowering women and girls to participate in the economy, leadership and education because of the critical untapped role of women in development.
  3. And enhancing the lives of people with disabilities. This is the first time that enhancing the lives of people with disabilities has been incorporated within the core development objectives of the aid portfolio.

In sustainable economic development the government has a further three development objectives:

  1. Improving food security by investing in agricultural productivity, infrastructure social protection and the opening of markets.
  2. Improving incomes, employment and enterprise opportunities for poor people in both rural and urban areas, including the development of sustainable mining industries to boost overall economic development.
  3. And reducing the negative impacts of climate change and other environmental factors on poor people.

These specific objectives go to a number of Australia's core strengths.

So much of under-developed Africa and Asia look to Australia in terms of our expertise in agricultural productivity.

The same can be said in the development of sustainable mining industries, which many countries in Africa, in particular, are now looking to as their pathway for long term economic development.

In supporting security, improving the quality of governments, and strengthening of civil society, the Government's key development objective is stated as follows:

  • Improve governance in developing countries to deliver better services, improve security, enhance justice and human rights for poor people and improve overall aid delivery and partnerships between host government's and aid agencies.

Human rights, also for the first time therefore, has been formally included within the core development objectives of the Australian aid portfolio.

Finally, in preparing for, and responding to, disasters and humanitarian crises, the Government's agreed development objective is:

  • Enhancing disaster preparedness and delivering faster and more effective responses to humanitarian crises given the increased frequency and impact of natural disasters in recent decades.

For some, these may appear to be an arbitrary list.

They are not.

They are the product of much reflection across Government in defining our strategic goals, our specific development objectives as well as the allocative criteria we will use within individual countries.

The net impact of this methodology is to maximise focus within an expanding Australian international development assistance program, so that we define a number of things well, rather than many things badly.

It is all about avoiding any future fragmentation of efforts.

The Asia Pacific region remains the area of focus for Australia's development assistance program.

It is the region which we believe that we can be most effective in.

It is the region where two thirds of the world's poverty currently lies.

It is the region where the rest of the world often expects Australia to provide leadership.

And it is the region of the world where our most direct, strategic and economic interests lie.

It is for these reasons that the Asia-Pacific occupies in 2011-12 nearly 75 per cent of the Australian aid program.

Within this, the dominant recipients of Australia's development assistance remain Indonesia, Papua New Guinea and East Timor. This will continue into the future.

Beyond the Asia Pacific, 14 per cent of our aid goes to south and west Asia — principally Afghanistan and Pakistan, but also including Bangladesh.

A further 11 per cent of our development assistance goes to Africa and the Middle East. This is a necessary reflection on recent turbulence within the region and the range of interests which Australia has alive in this part of the world.

The Government accepts the Aid Effectiveness Review's recommendations that Australia's aid to these various regions should continue to increase in the future.

As for Latin America and the Caribbean, only one per cent of the entire Australian aid program currently goes to the region to despite the fact that there is considerable continuing poverty in various parts of that region.

The Government accepts the reviews recommendation to the extent that any future increases to Latin America and the Caribbean be modest, with any increases to be delivered through regional and global programs.

The Government further accepts the Review's recommendations that Australia now begins to phase out their development programs in both China and India.

Both countries are members of the G20.

They are respectively the second and sixth largest economies in the world.

Both have considerable economic capacity.

And both have begun their own international development assistance programs.

Should Australia, for particular reasons, wish to sustain development assistance activities in any part of these two countries, it will in future do so through multilateral programs.

Direct country-to-country delivery will remain our primary vehicle of assistance in East Asia and the Pacific where Australia is a major donor, and where we have a well-established field presence.

In these countries Australia will take a donor-leadership role, particularly in the Pacific, where Australia provides around half of all ODA.

In South and West Asia, Africa as well as Latin America and the Caribbean we will make greater use of multilateral partners and our partnerships with other donor countries including emerging donors.

In these regions we can tap into these organisations' greater field experience, without any unnecessary duplication in our own aid official presence on the ground.

Australia will also increase our assistance to civil society organisations, including non-government organisations, where they are effective and provide the best delivery mechanism to achieve results.

It is a matter of record that the Australian Government increased its overall use of international NGOs over the last several years in the delivery of Australian development assistance.

As many in this room will know, in addition to increased funding, reforms to our NGO program include high-level strategic partnerships between AusAID and some of Australia's largest NGOs, including World Vision Australia, Oxfam Australia, Caritas Australia, Plan International Australia and Child Fund Australia.

The Government intends to double the AusAID NGO Co-operation Program, ANCP, which will support more Australian non-government organisations to participate in the overall delivery of the aid program.

The Government will also be making increasing use of Australian Volunteers for International Development.

This initiative, like the Australian Civilian Corps, flows in large part from the 2020 Summit back in 2008.

Currently, we have volunteers deployed in 33 developing countries around the world.

The Government intends to significantly increase its use of volunteers in the future.

As for the Australian Civilian Corps, this too has recently been brought into being under legislation by the Australian Government.

The first ACC specialists have already been deployed in the field. And the ACC register of those with specialist crisis emergency skills is expected to reach 500 screened and trained personnel by June 2014.

These personnel are then in a position for deployment the next time a natural disaster hits within our wider region, or even beyond.

The first such deployment took place in April this year when an ACC was deployed as a donor liaison officer within the Haiti Recovery Commission.

I would like to acknowledge and publically thank the members of the Review Panel, under the capable chairmanship of Sandy Holloway, for their dedication and work in delivering the effectiveness review on budget and on time.

Other members of the panel included Margaret Reid AO, Bill Farmer AO, Dr Stephen Howes, and Mr John Denton at the BCA.

The panel received around 300 submissions from a cross-section of the Australian and international community. They completed their work within six months. They made 39 individual recommendations.

The Government has agreed, or agreed in-principle, to 38 of these recommendations and noted one concerning the formal description of the portfolio — as this forms part of considerations of future administrative arrangements.

A full list of the recommendations of the effectiveness review is contained at Attachment A of the Government's response to the Review.

I would also like to acknowledge AusAID itself. The women and men who work both in Canberra and the 41 posts abroad in which AusAID is represented on the ground.

AusAID is a dedicated organisation.

As the aid effectiveness review says, it is "well led and well motivated".

And I attribute that in large part to the excellent work of its Director-General Mr Peter Baxter.

It is now Peter's happy responsibility to give effect to the agreed recommendations contained within the Government's response.

Finally, I would like to acknowledge the role of the Opposition.

Though it has wobbled from time-to-time, I wish to acknowledge the continued bipartisan support for the Government's objective of increasing ODA to 0.5% of GNI by 2015.

There are some in this country who argue that this is exceptionally generous.

The truth is, our current contribution of 0.35% of GNI lies within the bottom third of the OECD donor countries.

When we reach 0.5% GNI, we will be at the medium point of the OECD.

Many other countries have a much higher rate of contribution — for example the British, who lie currently at 0.56% of GNI and which under the conservative government have confirmed that they will increase it further to 0.7%.

But for our aid program to continue in an effective manner in the future, capable of making a real difference into the lives of the poor people of the world, it is critical that we continue to have bi-partisan support in this country.

I welcome the Opposition's participation at this event.

I welcome any constructive contributions that they may wish to make in the overall debate.

But for the future, I believe that it is imperative that for this important national project for the future, we work as team Australia across the traditional partisan divide in this country.

I therefore commend the report and the Government's response to it to the nation.

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