Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Hansard source

The coalition has previously welcomed the dec­ision of the government to conduct an independent review of aid effectiveness, and we welcome the release today of this report from that review. It was former coalition policy, prior to the last election, that there be an independent inquiry into our aid budget. It was not the policy of the Labor Party at the last election to conduct such a review. To his credit, the Minister for Foreign Affairs adopted our policy and this independent review was conducted.

Our call for an independent review stemmed in part from a report released by the Australian National Audit Office in 2009 which raised concerns about the management of our aid budget, particularly an over-reliance on 'technical assistance'—which I think members of this House can be assured is code for 'highly paid consultants'. Money spent on consultants is money not spent on programs, money not spent on particular outcomes. Highly paid consultants do not immediately translate into more effective aid delivery, and it was found that Australia's aid program was utilising such consultants at roughly double the OECD average.

In my meetings with heads of state and government representatives from countries receiving Australian aid, this use of highly paid consultants has been one of the more common complaints. Former PNG Prime Minister Sir Michael Somare famously dubbed it 'boomerang aid', to highlight what he saw as aid to PNG that mostly returned to Australia through the high salaries paid to Australian consultants and experts. The National Audit Office report also raised important concerns about AusAID's ability to effectively manage the forecast large increases in the aid budget required to reach the bipartisan commitment of 0.5 per cent of gross national income, on top of the large increases in the years preceding that audit in 2009.

The coalition's concerns about the management of the aid budget were comp­ounded by reports by investigative journalist Steve Lewis, published widely in 2010, about allegations of waste, mismanagement and questionable priorities. He uncovered examples which were given wide media coverage at the time where the foreign aid program was directed to priorities such as $12 million to the Royal Zoological Society of South Australia to research the giant panda in China and over $300,000 to the Australian Football League for promotion in South Africa. The Australian National Univ­ersity's entrepreneurial arm, ANU Enterprise, received $637,557 for a survey of people in the Solomon Islands. The New South Wales Rural Fire Service received $319,000 for a scoping mission in Botswana. The Altern­ative Technology Association was paid $358,923 to conduct solar power training in East Timor. Millions extra was paid to various firms to promote AusAID's global agenda, including $185,866 to sell Austr­alia's aid message in Africa. Some $330,000 was paid for a one-month communications research project and $12.8 million was awarded for the redevelopment of just one school in Nauru. Each one of these initiatives may well have been worth while. Each one of these initiatives may well have been justifiable. But these were the kinds of reports that attracted public attention and public concern, and a vigorous debate in the community ensued.

More troublingly, there have been reports of corruption and fraud within Australia's aid program, with media reports in 2010—and, indeed, another report published in newspapers today—showing that fraud has increased markedly in recent years. Some of this information has come from questions in writing that I have asked in this parliament. These questions have been part of the increased scrutiny under which our aid program finds itself. Scrutiny is vital because of the large sums of taxpayer dollars at stake.

At the heart of this debate are simple questions. Why do we have a foreign aid program? Why are Australian taxpayer dollars spent to help people in developing countries? What is the purpose and worth of our foreign aid program? The simple answer is that we do it because it is a moral obligation of developed countries to assist developing countries. We support them because our funds can reduce infant mortality, reduce maternal mortality, provide clean water, support economic development and foster more stable and prosperous societies. This support is not provided purely because we should assist those worse off than ourselves; it is also firmly in our national interest. Foreign aid should be directed to encouraging self-sufficiency in recipient countries and not welfare depend­ency. It is interesting to look back at recent history of foreign aid programs around the world. Foreign aid grew exponentially in the wake of World War II. Europe and Japan received enormous sums of money from the United States in particular, as war-torn nations had to rebuild their countries, their national economies and their national infrastructure. The support was designed to prevent a recurrence of the cycle that led the world from World War I to World War II. It was seen as an investment in stability so that millions of lives would not be lost on the battlefields of Europe again. No-one would question the wisdom of that approach.

Australia fortunately does not face that scenario in its sphere of influence in this region. However, we do have many countries where poverty is rampant and health and development lag most of the world. Many of the nations in the lowest range of the United Nations human development index are in our region. A significant percentage of the world's poor live in our region in Oceania, South Asia and West Asia. It is important that we support the development of these countries in terms of compassion and human development but also to try and prevent the collapse of governments and societies. Failed nations are far more costly to stabilise and rebuild than investment through foreign aid which can provide stability.

Foreign aid should be used to promote standards of living and human welfare and economic development. However, the qual­ity of a recipient nation's government and the social and economic policies of that government are the most important aspects in building prosperity and promoting and sustaining economic growth in developing countries.

The independent panel of Margaret Reid, Sandy Hollway, John Denton, Stephen Howes and Bill Farmer have produced a quality report. The 39 recommendations are well worth considering in detail. I partic­ularly welcome the recommendations relat­ing to greater levels of accountability and transparency. There has been a culture of nondisclosure around the delivery of Australia's aid program for too long, and it is vital that accountability is at the highest level. Arguably the most important recomm­endation is the final one, recommendation 39, which refers to, in effect, performance benchmarks. The report states:

It is sensible to recognise that the upward trajectory to 0.5 per cent of GNI is steep and challenging. It makes sense that budget appropriations each year be contingent on things going to plan and existing monies being spent effectively.

Third, failure to achieve a hurdle, or to fully achieve it, must have consequences. For example, the government could reduce the rate of increase or withhold all or part of the funding unless and until the hurdle is achieved.

It is therefore critical that the Minister for Foreign Affairs details the nature of the performance benchmarks that AusAID will be required to meet, how those performance benchmarks will be measured and how AusAID will be measured against those benchmarks, and the consequence of failure to meet its performance targets.

Accountability is important to ensure that the public retains confidence in the foreign aid program. Australians are a generous people and give private donations to many worthy causes in developing countries around the world. However, they do want confidence that their private donations and their taxpayer funds provided to the govern­ment for aid are actually being spent to alleviate poverty and to help countries to develop self-sufficiency. The ultimate goal must be to build that self-reliance, of course, and not to entrench reliance or develop a welfare mentality.

I also welcome the recommendation that the major focus of the foreign aid budget remain on areas of Australia's national inter­est primarily in our region, consistent with longstanding coalition policy. The recomm­endation that aid increases be higher to nations with higher standards of governance is also sensible and will help reduce corruption and waste within the program. There must be a zero-tolerance approach not only to fraud and corruption but also to waste and mismanagement in the aid program.

The coalition has been consistent in its view that the Asia-Pacific and Indian Ocean regions are the areas where we have the most influence and can do the most good. While there is great need for aid in other parts of the world, Australia's aid budget should be focused on our region, where there are billions of people still living in poverty. The development challenges facing countries in our region were highlighted during a Senate inquiry in 2009 into the economic challenges facing Papua New Guinea and island states of the south-west Pacific. According to the Senate Foreign Affairs, Defence and Trade References Committee, development indicat­ors in Papua New Guinea went backwards between 2000 and 2005. In 2008 the human development index, which measures life expectancy, literacy, education, standard of living and GDP per capita, ranked the Solomon Islands 125th and Papua New Guinea 137th on a list of 169 countries.

I propose visiting Papua New Guinea this weekend and I intend to discuss ways that we can better work with Papua New Guinea, particularly in areas of a transfer of know-how and expertise in mining and resource sectors, so that PNG can develop its considerable natural assets for the benefit of its people.

In my view, the review is correct to recommend that aid to Pacific Island countries be prioritised over assistance to Latin America and the Caribbean. We should resist the temptation to spread our aid budget too thinly, particularly if it is in the pursuit of political or other goals. I have been critical of the government's use of our aid budget to bolster the government's campaign to win a temporary seat on the United Nations Security Council in 2013-14.

One issue that the review did not discuss was another aspect of coalition policy which called for a separate minister for internat­ional development with responsibility for the management of the Australian Agency for International Development and our overseas aid effort. We believe this is an important step in maximising transparency and accountability in Australia's aid delivery and would be a further significant step towards greater efficiency and effectiveness in the foreign aid program.

The push for greater transparency and accountability in our aid program was initiated by the Howard government. In 2006, the Howard government established the Office of Development Effectiveness to monitor and assess the quality and impact of our aid spending. The steering committee set up to oversee the office included represent­atives from the departments of the Prime Minister and cabinet, Treasury and finance. This initiative was flagged by the government in its 2006 white paper on Australia's overseas aid program. The Office of Development Effectiveness was given responsibility for publishing an annual review of development effectiveness, acting as a resource for government agencies involved in Office of Development Effectiveness eligible expenditure, evaluat­ing the implementation of country strategies and policies and publicising the results, undertaking reviews and periodic spot checks, and supporting the application of sound management principles. Other work undertaken by the Office of Development Effectiveness in those early years included country assessments of Indonesia and the Philippines. I note that the report of the independent review of aid effectiveness referred to the Office of Development Effectiveness in these terms:

The creation in 2006 of the Office of Development Effectiveness and its Annual Review of Development Effectiveness (ARDE) were no doubt important initiatives that have helped prioritise aid effectiveness. No other bilateral donor has an equivalent to the ARDE. Overall, however, the ARDE has been a limited success, being released with increasing delay.

The Review Panel proposes that the Office of Development Effectiveness remain within AusAID, but change its name to the Office of Aid Effectiveness and focus more on evaluation. It would be responsible for undertaking and publishing each year a manageable number (say, 10–20) of high quality evaluations. The Office would also publish an annual synthesis of evaluations and a quality assurance assessment of the aid program’s performance management system.

The review also went on to suggest:

A small Independent Evaluation Committee should be appointed (with both AusAID staff and several external members, including the Chair). All draft independent evaluations and the new annual synthesis report would be discussed and then cleared by the Independent Evaluation Committee (not AusAID) and then published.

I think that these recommendations are cert­ainly worth deep consideration. The coalition firmly believes in an evidence based approach to the aid program.

Foreign aid and overseas development assistance will continue to be the subject of vigorous debate within our community and within this parliament. The coalition will continue to scrutinise the aid budget. We will consider this report in detail and we will closely monitor the government's response. In particular we will hold the government to account over its implementation of the recommendations and the development of performance benchmarks. The coalition will continue to develop our priorities for the foreign aid budget. We will no doubt use the recommendations contained in this report released today to influence and inform our deliberations.

In closing, may I acknowledge the efforts of my shadow parliamentary secretary for overseas development assistance, the mem­ber for Brisbane, for the work and effort that she has put into developing coalition policy and raising coalition concerns over the delivery of aid. The size of our aid budget and the forecast increases mean that we must use all tools at our disposal to ensure accountability and transparency. The Aust­ralian public deserve and demand no less.

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