 Okay everyone I think we'll get started. I want to begin by acknowledging and celebrating the first Australians on whose traditional lands we meet and pay my respects to the elders of the Ngunnawal people past present and emerging. My name is Madeleine Flynn I am the program officer here at the Development Policy Centre. It's my pleasure to welcome you all to the 2019 aid budget breakfast. So thank you all for taking time out of your busy schedules to be here both in person at the Crawford School and on the live stream. So this is our seventh annual aid budget breakfast. It's been proven to be quite a popular event and a great opportunity to discuss the events from last night. Today we'll be hearing from Stephen Howes. Stephen's an economics professor here at the ANU and he's also the director of the Development Policy Centre. So Stephen will take us through the new federal budget and how that's dealt with aid and then he will widen the discussion and discuss some new developments in aid over the last year and also have a look at where we're heading this year. Before I hand over I want to encourage everyone to join the conversation on Twitter. So using the hashtag aid budget 2019 and also mention us at Dev Policy. Okay I'm going to hand over so please welcome Stephen. Alright thanks a lot Maddie and good morning everyone. It always surprises me that people still come along and turn up to this but as long as you turn up you know I'll keep presenting. So we're going to go over you know the structure is probably fairly familiar from earlier aid budget breakfasts. We do have a lot, well we have some less data because the budget was brought forward a month earlier. Normally we update the global aid data as well we're unable to do that and then some of the performance data was only released last night so it's a short time to analyse it. At the same time as Maddie said you know we've been trying to take this event beyond simply the aid budget because there is only so much you can say about an aid budget unless there are some massive changes and also it's just a useful opportunity for a more broader discussion and we thought this year with the election approaching we brought in beyond the budget to look at party policies towards aid and if we have time towards development more generally because I think there are some very interesting comparisons. You know we have just released two reports on Australian aid the stakeholder survey and views on FIC and the AI, FFP, Australian infrastructure financing facility for the Pacific so I won't be talking about those today but happy to take questions on that and also say yeah we do make a kind of a pitch at this event you know if you like this analysis you might use we'll think about funding us because this is something we can't turn to DFAT for to fund we need your support. All right let's get going so these graphs are actually from last year because as I said we haven't actually got any more data yet from the OECD it's going to be released this month but nevertheless I think it's worth refreshing our memory about the global context because it does provide important context and contrast for Australia so while we've been cutting aid we might think you know that's kind of global a global trend and aid is passed it's used by data and we shouldn't be talking about aid anyway but in fact you know the aid the ODA industry is growing and growing and it's pretty flat in the US which is interesting you know Trump came to cut aid but doesn't control the Congress it hasn't been able to but outside of the US aid is on the increase and not just in dollar terms this is dollars after inflation but actually adjusting for GNI you know the ODA to GNI ratio maybe isn't increasing anymore but it's not declining either and that's also a very stark contrast to Australia in fact there are you know more countries than ever giving generously either about 0.5 or 0.7 we're not quite at the record which was up here of nine but we still you know at a relatively high level of seven or eight such countries and it's not just about in-country refugee cost that has been that is one source of the increase in aid but it's only one source so that's the global context in which we can understand or which we need to be aware of when assessing Australia's performance the other important context for us is the budget so as I'm sure you know it's a goodbye to deficits we are back in surplus territory with the underlying cash balance protected to go into surplus in the budget year 2019 20 at about 7 billion so it is still a projection I mean budgets don't always come true and it will depend on how much revenue is raised and you can imagine if there's a commodity price collapse we may not get there but you know you can see there is now there has been a return you know virtually to surplus already we are over the days of very large deficits and that's on the back mainly a better revenue performance has been some expenditure restraint if you look at that red line it is falling it has fallen from about 25 to 20 so 26 to 25% of GDP but overall what caused the deficit in the first place was a huge drop in revenue a big revenue shock with the end of the commodity boom with revenue falling from 26% of GDP down to 22% and it's mainly the closing of that gap with the revenue various revenue measures raising various revenue measures undertaken some recovery and commodity prices it's that revenue closing of that revenue gap that's brought revenue back up to sort of historical average around 25% of GDP and that has got us out of the deficit situation so of course you know you'd think that that would be relevant for foreign aid the original rationale for cutting aid came because of the debt and deficit situation and I quoted Julie Bishop there but in fact as I mentioned the blog this morning actually the idea came right back in 2013 from Nick mentioned who first put the argument that you shouldn't be giving aid when you're borrowing money because you're taking money from overseas and then you're giving it back that argument certainly took hold within the Liberal Party and was picked up by Julie Bishop and recognized by the OECD so you think it'd be relevant for foreign aid perhaps it is slightly but probably not as much as you'd hope so what actually happened in the aid budget last night you know there are always a few little surprises and I think you can actually it's easiest if you look at this graph I'll just come around here yeah you actually have an aid increase in the current year which was you know unexpected and then a dip back and what's happened here is that some of the multilateral payments have been brought forward from 2019-2018-19 and that would seem to be in order to help that surplus this is the target surplus year so if you have less aid this year more aid the previous year when you're in any case in the deficit it's going to help your budget position look better so you're basically shuffling payments around but if you add these two years together it's it's virtually unchanged from what it was in last year's budget right so it really is just a paper exercise then after that the the the forward estimates these two years are unchanged from what they were in the last budget and then this is the new year in the forward estimates right every budget you add a year in the forward estimates and you do see an increase here right and actually that was foreshadowed in last year's budget although it wasn't in the forward estimates it was actually the government said we are going to start increasing aid from this year and they have and if you look at it it's two and a half percent and that's in line with inflation so that was the promise that Julie Bishop made back here that they weren't going to increase aid but they were going to they weren't going to increase aid to point five but they were going to keep it in line with inflation so she made the promise here and it's actually going to be implemented here so I guess that that pretty much sums up the story so if we look at longer term what that what that means if we put it if we adjust for inflation then in the budget year we'll see aid falling by 27 percent and by the end of the aid cut process down to 31 percent so that's that one third cut that we've often talked about I guess it turns out to be slightly less than one third but only very slightly less and most of the cut you know is has now happened yeah if we take the long view this is a graph we always show where you have the slow increase in aid you know really from the start of the program up to the turn of the millennium then the rapid scale up and then the the scale down in terms of you know what that means for our generosity index you know I think what's interesting here is we are we often talk about this point to it's kind of a threshold you don't want to go near but we're actually getting to it not in this year's budget but in next year's budget we're actually going to be at the point to level and yeah as I mentioned in the blog and as we discussed last year you know the point to club is not a club you want to be a member of right because you're either you've got the United States which I guess is good company but they're a massive economy and a massive economies tend to give less in aid as a percentage of the economy plus you know they they do bear a disproportionate share of the defense burden I think their defense just GDP is about 4% apart from that you've got countries in or coming out of crisis Spain Portugal Greece and then you got form new donors you know these countries that are just starting out with aid programs and so it's really not not where Australia should be and yeah you know we do see this in a slight tick up in aid here which is it I guess recognition that there is no longer a deficit but overall as I said the deficit's been tackled through the revenue side not through the expenditure side so this is all the non-aid expenditures like this is basically total expenditure 99% of expenditure and it's grown by as much as aids been cut I mean roughly speaking there's some you know rapid growth over the forward estimates anticipated so perhaps some slight restraint on the expenditure side so far but big growth to come over the forward estimates and nothing like the cuts that we see on foreign aid yeah so aid has just gone down the priority list and is below now 0.8% of total expenditure and and is going to head keep heading down is even with that small increase in inflation government expenditures are holds increasing much faster than the rate of inflation yeah we track the defense to aid budget ratio that's an in I guess that's a it's a good way of thinking about government you know how the government sees the world and what's what's the real priority so the old age of GNI target was 0.5 that's been dropped the it was never achieved and it's been dropped in fact we never got close to it but the a the defense to GNI or GDP target is 2% and we've almost got there so we're already there 1.95% and that has resulted in a massive shift you know we used to spend about $5 on defense every dollar of aid and now it's already up at 9 it's gonna go gonna go above 10 okay so that's the aid on the aid quantity side do feel free to ask any questions if you got any otherwise I'll just keep I'll keep going and we have questions at the end in terms of countries and sectors and partners and performance there they definitely were winners and losers and you know the specifics are on this slide but again I think it's easy if you actually look at a graph so if we well if we start out at the aggregate level yeah it's basically the step up you know the in the earlier period of coalition aid budgets you know the really the aim was try to protect the Pacific and ring fence it and there were there were some cuts but they were quite modest for PNG in the Pacific but starting the context of a very rapidly the 27% cut right remember this is in this is also inflation adjusted so to bring about that first protection for the Pacific and then increased allocation for the Pacific it's been necessary in the context of overall a rapidly shrinking budget it's been necessary to really slash other parts of the program and you know this is Asia this is both Southeast Asia South Asia and you can see that that's really took a big hit in the big year the aid cuts but then has subsequently been cut and was further cut last night Africa the Middle East likewise even more savage yeah so I guess similar to last year's budget in financing the step up for the Pacific and basically if we want to give more aid to the Pacific we don't have a bigger aid budget than something's got to give and it was it was a to Asia I think symbolically it's significant because this bar is actually now above this part right so for the first time now a to PNG in the Pacific is greater than a to Asia so that's a significant threshold and speaks to the I guess the priorities of the government and the era in which we're in which we're living yeah so that's the if you look at total ODA and now we're just looking at this is just focusing in on last year increases and decreases so just in nominal terms you have about 70 million more for PNG in the Pacific and that's funded by a cut to East Asia about 50 million and Southwest another Asia by 20 of 20 million and if you then go in further and look at the individual countries the winners and losers again this is the difference comparing this year's budget so 2019 budget with the 2018 estimated outcome and you know ranged from biggest winner to biggest loser so the whole lot of countries in the middle right not really seeing any change largely status quo but if we look at the ones that did gain and lose the biggest winner is Pacific regional and I guess that reflects the specific step up right which is a regional program so the infrastructure funding the AI FFP grant funding you know we're not sure and we know it's 500 million in total we're not sure how much is budgeted for this year but it's obviously you know maybe it's less than 50 and then there are other regional expenditures so there's increased spending on the Pacific Labor scheme to support Pacific Labor facility a new security college was mentioned so these are all regional programs that will be spent either spent at the regional level or will be eventually allocated into individual countries but that hasn't happened yet after that you get a few you actually get popular you're getting increasing which we have some of islands decreasing and I think that's more a timing issue perhaps around the cable expenditure on the the coral sea cable I don't think it's a particular policy to single out PNG likewise for the other smaller cuts but at the other end we have cuts to Indonesia Solomon Islands Pakistan Cambodia Nepal so the ones are highlighted at the lock up the ones that you can look in the as actual cuts in the bilateral program because some of this you know will reflect emergency expenditure during the year but it was Indonesia Pakistan where there's a very large cut in the bilateral program about 50% Cambodia Nepal I mean Cambodia was singled out because it hasn't delivered on the regional on these asylum seekers right very few asylum seekers have resettled in Cambodia so it was it was only protected from aid cuts in the hope that it would as part of that deal but that deal didn't work out so Cambodia's been cut I guess Indonesia's been cut because the biggest such a big program kind of fine things to cut why Pakistan and Nepal have been cut is I don't know I guess they're seen as not being as important to Australia they're further away yeah as I put in my blog last night it's you know it's it strikes me as incoherent budget you know there's no rationale presented for why Asia is being cut to fund the Pacific you know the reality is we need more money for the Pacific we're not going to increase aid something's got to give therefore Asia is going to be cut but you know the government doesn't want to come out and say that and so you do see some attempts at a rationale that are less convincing in fact the Prime Minister Scott Morrison when he talked last year about the need for increased funding aid funding for the Pacific you know really said he was going to cut multilateral funding that was wasteful these clubs that we don't need to join but as far as I can tell that didn't happen last night the foreign minister in her press release talked about Southeast Asian countries transitioning from being developing countries right so they're going to graduate but you know that's a very flippant remark certainly the ones that's true some Southeast Asian come you know think about Malaysia Malaysia's making the transition to a high-income country but the countries that we actually provide aid to like Indonesia are a long way from being high-income countries they're going to be developing countries for decades and you know they have massive they have massive development needs massive challenges and countries like Pakistan and Nepal are poorer too so I'd say it's a pretty poor justification the amounts of the cuts are not huge at the aggregate regional level but they are very big for particular countries and the problem is going to continue you know because the step-up is going to continue the more there'll be more funding needed in particular for the infrastructure program but you imagine also the government's going to keep coming up with new ideas on how to spend aid in the Pacific yeah with no fiscal constraint on the aid budget it would make far more sense to fund the Pacific step up with new aid money you know as would have been done in earlier times when you came up with a new aid program but in the absence of that certainly much clearer justification and some certainty around the future of aid to Asia would be would be warranted that's a longer term perspective but I think doesn't add that much to what I've already said going to the sectors you know the government does release aggregate funding on sectors which is very helpful there's been some talk around this budget sort of sharpening security focus of aid but you don't really see that when you look at these sexual numbers in fact the one thing that stands out is this recovery and health spending the government has been you know heavily criticized for very sharp cut in health and so it's interesting to see this response some part of it must relate to the health security the Asia Pacific Health Security Initiative that is now underway and spending otherwise it's pretty much unchanged allocations so there has definitely been a shift in priorities away from education and health towards infrastructure and then this protection of governance which is still the bigger sector but it's much more a story over the entire coalition era rather than a story of this particular budget you know just have a little dig at DFAT this is the we always look at the expenditure on the departmental budget which is the the amount it costs to administer the aid budget you know it's difficult to measure that now because it is an integrated department and a lot of people are doing both you know working partly on aid partly outside of aid I guess it's it's helpful to charge your expenditures to the aid budget because you can count that as ODA and at one stage you know when the integration was announced this was seen as being an efficiency undivided but that's you know gotten that that's a long long time ago we're not up to this this is sort of the build up to the to the scale up we're not up to that level yet but it is an upward trajectory another thing you know we update every year is looking at who's delivering the aid budget and we don't have that information for the current year but it's you know we're always one year behind and I think this has got some interesting stories to tell this year it's it's a little bit frustrating because this other category is the one that really falls and it's not clear exactly what's in that other category if anyone knows I'd be very interested to find out but taking you know putting that uncertainty to one side if we look at the main modalities you see here the government's preference for contractors as a modality you know including in the in the last year it's up to 900 million now so you know you wouldn't given there has been this 27 okay this is nominal but a billion dollars of aid cut you don't see that certainly with the contractors effect you see an upward trajectory multilaterals you know it's a bit up and down depending on replenishments it'll really go up in 2018-19 because they've brought forward those payments but yeah definitely the multilaterals have been protected despite Morrison's claims that this is where they've been saving money and yeah NGOs have been doing it tough so you do see a cut in NGO funding from DFAT ANCP has been protected but the broader engagement of NGOs in deliveries I mean some of this may be that money is coming to them through contractors so it's actually appearing under the contractor heading and then subcontracted to NGOs but it does look tough for NGOs and just to add on to that we also monitor public donations to NGOs we're even another year behind because it takes time there's so many NGOs to aggregate all that data but you can see that the last couple of years have been disappointing for NGOs in terms of fundraising there was a increase a few years ago perhaps or you know helped by some high-profile disasters in our region but in the absence of those natural disasters a donations have fallen even in nominal terms definitely in real terms yeah basically matching or resulting from a decline in public generosity whether you measure it in terms of donations per capita or donations to GNI so I guess you could say that the government reluctance or depriorization of aid is perhaps reflected or consistent with broader community attitudes okay well that's the run-through of the aid budget I'd be I'm sure others would have a lot to contribute or if you have any questions happy to take them but we do have a bit of time to oh sorry I've got one more thing we forget on to election policies yet the aid Australian report was released last night so we have no much time to analyze it but just say two things about it it does give you a useful way of looking at performance at the country level always difficult to assess but you can look at the portion of objectives met and you normally see PNG at the bottom which you do now but it has been joined now by a few other countries Tonga Samoa Myanmar I mean you can guess what's going wrong in Myanmar it would be interesting to find out what's been the problem what is the problem in Samoa and Tonga in general though we see that pattern that Asian countries are at the top you know Bangladesh East Asia regional Indonesia so there's an equal first right so it is ironic to cut aid to your best performing countries it's not you know there is curibus so it's not you know all the Asia one in and all Pacific at the other but in general you can see Asia tends to be at the top end and Pacific towards the bottom the other comment I make is disappointing you know they have that as well as this country analysis they have the 10 targets by which they monitor the overall performance of the aid program these were developed in 2014 and there's been talk for a couple of years now about refreshing them nine of them have been met the gender target so stubbornly refuses to be met but in general there's a strong consensus that the targets are out of date and need to be updated there was even a consultation process last year but we shouldn't see that in this year's budget perhaps in this year's performance report perhaps that to rush it with the budget being brought forward early but I think in general there's a kind of a definitely a loss a loss of interest on the coalition side if you think about Julie Bishop when she took over you might not have agreed with everything she said but there was a lot of energy around the new aid paradigm and economic diplomacy and making performance count and you compare that to now it's really like well let's see if we let's see if we hear next year and then we'll worry about an aid performance and aid reform okay well that does take me to these election policies and I'm gonna talk about aid then go beyond aid as well to look at some other development issues it is an interesting time I think of course with elections are now you know so close it's so it's certainly relevant and there are some important differences I'm not sure where the coalition is going to you know bring out any sort of aid policy but you can take their policy as per the forward estimates the ALP have adopted a new policy at the party level so it's not yet I don't know if it will become something that goes into their election platform and it's actually costed by the Parliamentary Budget Office but it is a party platform that AG and I would increase over time and then the Greens of course more ambitious wanting point 70 and I by 2030 just on Labour's position it is a significant development from what they took the last election the last election there was no underlying target it was more an amount 800 million over the forward estimates 200 million a year this time as as I said this new policy was adopted at Labour's National Conference in December and well it's not yet an election policy this is a quote from Penny Wong's speech although not at our Centre but a speech he gave this year at University of Queensland in fact just last month you know where she didn't actually endorse it but if you read out the policy it is pretty much like you're endorsing it right so it really I think you could say this is now the shadow for a minister's policy on aid and it's a policy to commit to increasing official development assistance as a percentage of GNI every year that we're in office starting with our first budget so I've tried to model that I did that last year I've now updated it for the most recent numbers and also then I was assuming the election would be held early now I'm assuming it's going to be in May so I'm assuming the first budget for Labour even if there are some adjustments to this budget I'm assuming that they're not going to tackle aid in 2019 they're going to tackle aid in 2020 and I've got there are two ways you can interpret this policy you know one is what I call the strict way which is when we talk about aid to GNI we normally go we go to two decimal points right that so we say like Australian aid is next year or the after next is going to be 0.20 and that's 0.21 so if you're going to increase that every year then you have to go from 0.20 to 0.21 to 0.22 to 0.23 so that's what I call a strict interpretation of the policy a minimalist interpretation of the policy is that you just have to increase it you have to keep aid the ATG and I ratio steady plus then increase it by an infinitesimal amount right like another dollar on top of stabilizing it that's a minimalist so you know which policy Labour Party will adopt remains to be seen if it adopts this minimalist policy like for more than a year I think it will it won't be credible it will be embarrassed on the other hand it might be too optimistic I think it's going to every year follow that policy strictly since it's not actually part of the election platform but either way you see a fairly significant difference between what the coalition is promising on aid in the forward estimates and you know this will be the new year for the estimate so here I just assumed that the indexing to inflation policy continues and if we just look at it in terms of the increment so what Labour is promising relative to the coalition then yeah it is it is very significant new money so even in the first year it's between 200 and 400 million in the second year it's between 400 and 800 then you know 450 and a billion and then 600 and 1.4 because GNI is growing every year right it's about 4% in the budget so you've got to have at least that increase and then if you want to increase that ratio you got to go above that so it is a more much more ambitious policy than Labour went into the elections last year I'm sorry the last time even the minimalist interpretation that adds up to more than 800 million I mean on the other hand it's it's less certain you know this is the last time they did go to the Parliamentary Budget and they did go to the office with the cost of aid commitment we don't know if they're going to do that this year that was going to be a good thing to ask for anyone interested to kind of press Labour to do so it is actually costed but nevertheless it is a very significant difference and if you just take it forward a few more years like you assume okay they win another term of office and they're there for six years under that strict interpretation repairing the damage and this is even now adjusting for inflation under that minimalist interpretation you're not you know repairing the damage but you're you know still making a significant difference beyond aid you know we haven't heard anything from the Coalition and there's not a lot I guess they've you know what what they want to do they've done and it's it's there in the recent budgets and the big speeches last year from Morrison and Maurice Payne and you know later seem to agree with all that about the Pacific but if you look at Penny Wong's speeches or the two speeches she gave last year and this year you do see some interesting themes so first a fresh approach to P&G and this is a kind of perennial issue when Julie Bishop came she also promised a fresh approach to P&G and she did adopt one I don't think it worked so you can see why Labor's calling for a fresh approach but you know how you can actually improve aid delivery in P&G is not an easy easy question there is an explicit recognition of aid importance of aid to middle-income countries in Penny Wong's UQ speech and the call you know basically not to cut Asia to fund the Pacific but to find that additional funding for aid so that you can increase aid to the Pacific while at least protecting aid to Asia the priority themes health education gender climate change and more recently infrastructure it sounds like everything but the important you know what's missing there is the biggest sector of all which is governance so that would be a significant shift if followed through on that we'd see a decline in governance which has reigned supreme for this government Penny Wong's also been very skeptical about the innovation exchange and it's interesting in this budget you do see much less funding for the innovation exchange so the idea is the innovation exchange is now being mainstreamed it's it's influencing aid operations in general rather than running its own programs and that's probably I think that's a good thing she's also she's been more supportive of the health security initiative but has caused some reform that then there's a whole issue of DFAT reforms where you know really the focus in the most recent speeches on training and getting more development expertise I think there are bigger issues at DFAT around the governance of aid which she's sort of highlighted but hasn't really given a solution to so I think that's still a sort of work in progress or an unknown area what actually will be done around the governance of aid beyond keeping getting DFAT and then you know two things we've been pushing for you know more transparency and better communication you and two things that Julie Bishop actually came to into office promising but didn't really deliver all right I want to now shift beyond aid altogether if you're interested in development the other two things that the other sort of two areas of policy that would probably interest you are migration and climate change and in migration you know we focus on a Pacific labor mobility I think that's an area where policies are the same on paper but whether the ALP will give it the same emphasis that the coalition has remains to be seen but anyway in this presentation I want to focus on the refugee intake because I think that is the one where there are some stark differences and where there is obviously a very strong development link if you think that the refugees are among the poorest and more generally than the most deprived and exploited citizens of our globe then increasingly humanitarian intake is crucial for development and you know one of the most important things the government can do if we look at it historically the refugee intake or it's you know officially called humanitarian intake because they're not all they don't all have to formally be classified as refugees but they're people suffering persecution dislocation overall there's been a slight increase in humanitarian intake but it's been left behind in the migration boom so if we look at the humanitarian intake relative to total permanent migration it's it's gone it's it's moved around but overall it's on a downward trajectory slight recovery recently so while net migration has gone up the net migration from refugees hasn't gone up it stayed pretty stable or declined and then stayed then stayed stable what's interesting is that you know as with a the parties are promising different humanitarian intakes and again I'm just going to focus on coalition and the ALP although again the greens are promising an even more generous version or a more generous intake than the ALP but if we look at this we do see a recent increase and which is at different times supported by first ALP then reversed by the coalition but now the coalition has increased the humanitarian intake to some 17,500 so that's a significant development there but the coalition is not promising any further increase right it's going to be pegged at that level whereas Labor is promising to increase that to 25,000 and has been criticized by the government for that on the count of the cost but that is a significant difference and when you go back to the humanitarian intake by population use the logic well as a bigger country we can afford to take in more refugees under the coalition they're sort of going to be in the middle of where we've been over the last 30 years but under Labor if they implemented that policy we would be getting to that point one percent so one in a thousand refugee intake over the population that would be a historic high so it would be a real achievement from a development or from a humanitarian perspective alright and then I said the third issue might be interested in if you're thinking you know if development issues are important to determining your vote would be climate change since it has you know such important global consequences and the worst impacts you know are and will be felt by the poorest countries so this gives the Australia's emissions record which is the black line and then the policies of the coalition and of Labor so the first thing to note is that we've you know emissions rose until about 2007 then they fell sharply and but now they're on upward trajectory again in a previous incarnation I worked on the Ghana review of climate change which was here in around 2007 I have to say we totally missed the fact that emissions are going to decline so sharply and we recommended a you know a range of targets from 5 to 25 percent the government adopted the weakest of those which is five that ended up way overachieving but basically through changes in industrial structure with the resource boom leading to deindustrialization leading to reduced emissions not a lot to do with policies although there's some smaller impact but we are now talking you know earlier targets be much more modest the initial you know five percent before that we had the Kyoto target which is actually an eight percent increase not a reduction at all our targets are now more serious and for 2030 the coalition is is proposing a reduction of 30 percent almost 30 percent by compared to 2005 so up here the sort of controversy is about you know whether they're going to use this so-called Kyoto carryover the fact to be overachieved our earlier targets in the legal agreement you can actually use that to offset an underachievement in the later period it's it's a controversial issue but the coalition saying it will make use of that provision and so actual emissions will be up here rather than here if we do hit the target labor has got a more ambitious target it's a 45 percent cut but you know what we labor have said that they'll also be using international purchases of credits to hit that target which is something so far the coalition hasn't entertained so in fact you know that may mean our national emissions are more somewhere up here right so this may be a somewhat ambitious rendering of what ALP the ALP target actually is for the national economy you know nevertheless it's a that you can see again a significant difference between the parties in relation to emission targets and I guess that's where I'll conclude on aid yeah no respite for aid in the budget despite the surplus or you know at best a respite only in the last year of the forward estimates and even then it's only adjustment for inflation there's no real increase high level of continuity with earlier budgets continued Pacific step-up and ages stepped down I think make sure an incoherent aid program and aid budget at least without a lot more explanation and public thinking about why we're taking the aid program in this direction and then looking more broadly looking forward to the elections you know there is a lot to play for in these elections and it's interesting that development policies have become increasingly partisan over time although Penny Wong has been calling for a bipartisan approach to foreign aid if you look at the way we going you know we're going the opposite direction there used to be a bipartisan target for aid until around 2012 when that consensus broke down and likewise there was a bipartisan consensus around humanitarian intake but that broke down in the same period and on climate change the debate between the parties used to be very much about the mechanisms and whether we have a carbon price or a mission reduction fund while there was agreement on the actual target that we were trying to achieve the disagreement was about how to get there now I think we still have no idea how we're going to get there but there is a more fundamental disagreement about where we should be going around these targets so it is an interesting development that development policies have become increasingly differentiated between the two major parties and it certainly means it's going to be very important who wins that next election so thank you very much to everyone thank you to my colleagues who help do all this analysis especially Ashley and Satini and if you want more go to our aid tracker which we've updated based on last night's budget and happy to take questions and also to hear your comments and perspectives hello thank you for insightful information it was great I'm just a question on how does the aid budget relate to the SDG the SDGs from the United Nations right yeah no I know the SDGs well they if you look at the aid budget documentation you do see a increased attempt to kind of to frame the aid program within the SDGs in fact I haven't looked closely but for the first time I noticed in the the green book right the statistical book that there was a allocation of aid to different SDGs so I think the government is trying to you know present the aid program through the lens of the SDGs but as I'm sure you know the SDGs are so broad it's difficult to actually say the SDGs are shaping the program because you can pretty much do anything and say it links to the SDGs so it's more a matter of presentation rather than actually shaping the aid budget thank you looking at the multilaterals did you have a chance to look actually which are the multilaterals that are that are supported and which are the ones where there have been cuts right yeah well honestly I don't think there were any cuts to any multilaterals in this budget I mean I can I'd be happy to be corrected but that was my impression from the budget lockup and and looking at the budget document myself there were some cuts in the first year of the government for some of the UN agencies so they did their right but in the scheme of things they were pretty modest and some of them there's also been increased funding for UN because we have I should have mentioned there has been an increase in humanitarian spending in this budget up from 400 to 450 million so some of that means increased funding for for the UN it was noted that there are several replenishments coming up in the coming years for the big multilaterals the World Bank the ADB Gavi Global Fund the global environmental facility and then there's the green farm green climate change fund so I think there's some decisions to be made in the coming years but yeah overall the picture this picture of stability apart from those early UN cuts I think is also evident at the individual multilateral level it's not just at the aggregate level thank you so much for that talk a bit more of a technical question for those of us who are looking to consult more directly the the numbers presented in the aid budget would would it be best for us to go and look in the portfolio budget statements under the under the ODA expenses list if we were going to track the the bottom line so to speak it's best to go to the what's called the orange book right on the DFAT website yeah not on the Treasury website yeah because ODA is not really a budget concept okay so you it and it tends to be especially now it's wrapped up with DFAT spending on totally different things exactly so yeah it's best to look at the at the orange book there's a odd thing that that you don't get these forward estimates actually written down anywhere so these numbers here oops yeah these numbers you yeah they're actually read out to you at the budget lockup sometimes they appear in answers to Senate estimates but otherwise yeah you can take those numbers so these numbers plus the DFAT website is the best place to look fantastic thank you I saw it like the aid that goes to the non-government organization decline we have like reason why is it so and my second in related question is that especially in post-country and conflict areas what's the volume of aid that goes to peace building right well there is actually a wealth of information if you dig through it and so this is yeah this is what I said this is the Green Book Australia's official development assistance and it does track funding on peace building anyway I won't try to find it now but I remember it's about 18 to 90 million so that's the answer for that question and you were asking about this were you about NGOs yeah so this is the yes so there is this decline I think it's a couple of reasons one is that the DFAT has likes working through contractors doesn't have as many staff dedicated to aid so wants to give a lot of the administrative burden to contractors and then a number of these contractors run these facilities right they're very large programs to do a number of things and one of the things they might do is pass on some of the funds to NGOs so if it goes straight to NGOs then it's counted under under here but if it goes by contractors it's counted under here so part of it could be an accounting change but part of it is that the aid program has been cut right there program cut by a billion and so yeah what's really surprising is that the multilaterals have been cut more in the contractors but someone's got to go and so the NGOs have been cut and if we look at the smaller ones they didn't show are here right so universities have also been cut you know Crawford school can testify to that and although we're still providing a free breakfast and developing countries you know there's no there's much less money going direct to developing countries governments and then as I said this other which is a bit of a mystery although part of it is other government departments they used to be much more emphasis on other government departments delivering aid and apart from ACR and to some extent AFP that's really much less my for example Treasury is much less involved in the delivery of aid than it used to be thank you for your presentation and my question regards one of the latest slides you showed in the analysis of the aid budget regarding performance yeah is there any correlation between cuts to country programs and performance no yeah no because um yeah like there's Indonesia is cut and Cambodia was cut so there you got two of the best performers using this metric yeah yes Bangladesh the yes so I think that's right actually I show Bangladesh as not being cut but that must that may something to do with humanitarian aid but yes the DFAT bilateral program to Bangladesh is being cut as well yeah so there you have some big countries that are performing well that are being cut and then you got some of the Pakistan as a middle performer but yes some of the Pacific countries down the bottom are seeing an increase so it's nothing to do with performance it's really to do the Pacific step up and it's this idea that for yes strategic reasons we need to provide more aid to the Pacific yeah it's very different to earlier thinking in fact I was I indulged in the recollection on my blog about when I was on the independent aid review and we were actually back in 2011 we're actually charged with how Osage should spend you know this massive increase and actually we said that it shouldn't go to the Pacific you know should go it should go to Asia and the idea was Pacific it's already the most a dependent region in the world it's not a lot of the aids not that effective so we had a totally different approach but that is history and you know it is now all about the Pacific step up and then you've got to fund it somewhere if you're not going to increase aid so cut Asia Steven thank you very much for the presentation and also for the free breakfast next year maybe choose a pace just on the issue of the Pacific step up there's a new office of the Pacific being established I couldn't see in the last night you know in the documents I know you talked before about the departmental you know budget in regard to administering the aid budget but I was wanting to know if you know anything about the office of Pacific in terms of funding and and how that's going to take on a role with the Pacific step setup thank you yeah the office of Pacific has been established and you're McDonald is the head of that office and yeah they're definitely staffing up and that may be one of the factors driving up the that admin budget for aid there was also increased funding for the infrastructure the AI FFP Australian infrastructure financing specifically for the Pacific there's increased funding there to find infrastructure specialists that most of that won't be ODA eligible because most of the AI FFP is not ODA right most of its non-concessional loans but it's a similar thing so yeah there's definitely increased staffing for the Pacific in aid and on eight areas thanks Stephen for doing all this work so we don't have to looking forward if we were to see a start as a steady increase in the aid program how would you like to see that increase to be spent yeah it is it is you know worth reflecting on those are very significant increases in the aid program so far the ALPs only announced some fairly modest initiatives there's a little bit of extra money for NGOs and there's a avoidable blindness project in the Pacific and I think they just announced a sort of plastic pollution reduction initiative also in the Pacific so they've announced a few of the concrete but yeah there will be a lot of money to play for and I mean I would certainly advocate you know you using that funding so that you don't have to rob Peter the papal you can actually think about how much aid you want to give to Asia and you can plan for the next five years I think that'll be one really good thing to do I think this government has well this government has increased humanitarian spending and given that we're in the greatest humanitarian crisis since the Second World War it seems like a really good idea and you'd want to do more of that beyond that yeah I know the aid sector is never short of good ideas for how to spend money so yeah be good good discussion to have thanks Stephen I just had a question around on this slide actually around what you're using as your base for increasing ODA GNI for the ALP what's interesting about last night's budget is this bring forward which means in 19 in in this year's budget it's gonna be not point two three so if we're just assuming in the first year of a if Labor got in and they were to increase ODA GNI up from not point to one which is what it's projected to be to not point to two we're still three years out from a Labor party getting above what the last year of a coalition government ODA GNI ratio is I just think that's a really interesting position for us to be talking three years out well so if they're not point two three now yeah that's now that's right and then next year they go to not point to two to one I'm sorry to yeah that it's it's scheduled to be two one let's assume Labor go to point two two and then the following year they get to point two three which is matching what Labor is it's still another whole year before they get above increase it beyond what this year is oh that's true that's right so yeah actually that's a whole election cycle before they even get above where they ended right but it yeah okay I mean actually what I'm assuming is that point two one is the starting point so the Labor's only gonna start increasing aid in the 2020 budget but of course you know point two one or point two two point two three of a bigger economy doesn't mean more money than now so when you look at it when you put it in dollar terms it is significant but I guess yeah I am doing my comparison relative to the forward estimates so looking to the difference that it would make as to which government wins the election and yeah basically if the coalition wins you're gonna see the flat budgets for the next two years that is after the 2019 flat so in fact you have three years of flat budgets and then you're gonna see some very modest increase in inflation so just just to clarify by 2023-24 is when you're expecting them to hit not point two four if it's point two one two two three two four under this strict interpretation they may do less than that yeah that's the first time they're actually a straight if you leave the politics out that will be the first year we're actually increasing ODA GNI above what it is that's still not a really wholly optimistic I think it is pretty optimistic actually because it's just the amounts of money are so large and if you think about the last scale up you know it really got stuck on the fact they couldn't it was like a cliff right that they ran into right is whereas this does seem like a more sensible way to do it gradually over time and yeah you know even if you know you it does depend on you know if we have a recession you know it looks so good but based on the assumptions in the budget even in one term it would make a significant difference and certainly in two terms it would be a very significant difference yeah so I personally think it's a very ambitious claim it's more about you know how binding is it given that it's a party policy not a election policy yeah and will you know doesn't make sense for Labor to have this you know policy you can quantify but not put it in its budget costings in its election costings I echo thanks for a very informative presentation we needed your sectoral analysis of the aid budget you omitted gender which has held steady for quite a few years and I was just wondering if you had any commentary or thoughts about that right I guess I looked at the big the big sectors as reported in the as reported by DFAT so to be honest I'm not sure which one is gender isn't but the earmark funny for gender is quite small as you know so it's yeah I guess most of it is is mainstreamed through the budget but the gender fund I think it's called yeah is protected at 50 million thank you yeah I think the big Pacific women project is wrapping up in a couple of years so I guess that'll be a big decision as to what to do with that project and whether to renew that and a what level I imagine that would have a major impact on the total gender spend thanks I've just got a question about the trajectory slide you had up a moment ago that she and I wouldn't yeah and it just it strikes me that you you've used a graph in the past where you essentially had oh sorry the the the brown the LP you coach one yeah yeah the long that's that's fine it's not me that either with the with the scale up more and more in the rear rear view mirror it strikes me that we're kind of just back to this long-term kind of aid hovers around point low point two percent of GNI and essentially we're back to this kind of big picture strategic view of aid just being in the background and hovering around and not at the political forefront of the minds of our politicians and there are potentially benefits for that but you do you get that sense that moving further and further beyond the ramp up that we're kind of back to the future not really that's right I have made that point like it's almost like we just carried on with this kind of gradual increase of course we've got some benefits in the intervening years for all that aid but longer term it's like we're just on that it's it's like the big scale up and the reduction never happened and we just kept chugging along I guess the difference is that in these days there was that consensus around aid aid wasn't really with one or two exceptions aid wasn't really issue of politics there it was in the background whereas now you know as I've shown there do seem to be some pretty big differences in aid policy between the two parties so I think yeah that plus this you know big importance for the Pacific you know that's really unprecedented I think at least since PNG became independent you know that's also I think going to make the future different to that to the past yeah so I think there's still there's a lot of eventful times to come well okay maybe take one more regarding regarding aid modalities is that something that's been mentioned ever as a difference between labor and the coalition and somewhat separately does does the government receive analyze ask for release anything to do with the profit margins when they are giving to consultancies well I think when they when they bid them out yeah they you know they there's a competitive process and they also negotiate with contractors but that information is not publicly available in terms of the debate later you know earlier they've expressed some concern about the reliance with facilities I think if you go down to what I was saying yeah here whoops yeah so growing depends on managing contractors so the idea that de fat was outsourcing too much as I've said it's not like what their response is going to be is not really clear beyond getting more aid experts into de fat but yeah I think you know we in our stakeholder survey we had a special section of facilities and there was certainly concern about them in particular that they weren't achieving that goal of reducing transaction costs they may make life easier for de fat but for the sort of end user they can it adds another middle layer so yeah you imagine if there was a change of government there might be some revisiting of that or even if the same governments returned there might be some rethinking around facilities but yes then I don't know of any concrete ideas beyond this one of hiring more stuff more experts okay well thanks everyone I think we'll call it quits thanks everyone who watched on livestream and there should be some breakfast remaining outside