An Effective Aid Program for Australia Making a real difference—Delivering real results An Effective Aid Program for Australia Making a real difference—Delivering real results © Commonwealth of Australia 2011 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney General’s Department, Robert Garran Offices, National Circuit, Barton ACT 2600 or posted at http://www.ag.gov.au/cca This document is online at www.ausaid.gov.au/publications Cover images: Image on far left courtesy of UNICEF (©UNICEF/NYHQ2010-1638/Marta Ramoneda), other images courtesy of AusAID. ii An Effective Aid Program for Australia Making a real difference—Delivering real results Contents Ministerial Foreword v Executive Summary 1 1. Introduction 5 1.1 Why we provide aid 5 1.2 The state of global poverty 7 1.3 Australia’s aid program 10 1.4 A record of achievement 12 1.5 Recognising the wider development context 13 2. The Independent Review 15 3. Purpose of Australia’s aid program 17 4. Making Australian aid more effective 19 4.1 A clear strategy 19 4.2 Value for money 20 4.3 The importance of consolidation 20 4.4 Focusing on risk management and performance oversight 21 4.5 A transparent aid program focused on results 24 4.6 Involving the Australian community 25 4.7 Effective aid management—the role of AusAID 26 5. What Australian aid will focus on 27 5.1 Saving lives 28 5.2 Promoting opportunities for all 30 5.3 Investing in food security, sustainable economic growth and private sector development 33 5.4 Supporting security, improving the quality of governance, and strengthening civil society 36 5.5 Preparing for and responding to disasters and humanitarian crises 38 6. Where Australia will provide aid 41 7. The way we will deliver our aid 53 Abbreviations 57 Annex A. Response to Independent Review recommendations 59 An Effective Aid Program for Australia Making a real difference—Delivering real results iii iv An Effective Aid Program for Australia Making a real difference—Delivering real results Ministerial Foreword Australians have long believed in a fair go for all. We want to help others in need to overcome poverty, both at home and abroad. We are also a very practical people who want to know that our taxpayer dollars are making a real difference on the ground and not being wasted. We are also hard-nosed about our national interests. We want our aid to enhance our security and prosperity, in our region and beyond. It is for these reasons that for more than half a century, Australian governments of both political traditions have supported the Australian international aid program. It has been a largely bipartisan project. And there is a deep national interest in this continuing to be the case in the future. There is much we have done in the name of Australia for which all Australians should be proud. • The Colombo Plan which, from the early 1950s, trained thousands of young men and women who later became leaders in their countries, a vision we continued through the Australia Awards, which we now offer to developing countries across the world. • Our investment in maternal and child health and the fact that we are currently funding the immunisation of 7 million kids around the world against fatal diseases. • Our efforts in Solomon Islands that are reducing malaria infection rates by well over a half. • Our investment in Indonesian education, where we have built 2000 schools and are building 2000 more, as well as training more than 290 000 principals, supervisors and officials, and helping schools reach national education standards. Our task is to build on these achievements for the future and to make sure our aid program makes a real difference for the 1.4 billion members of the human family living in poverty. Back in 2000, the then Australian Government committed to the Millennium Development Goals aimed at producing a real hole in global poverty by 2015. The truth is, the international community is on track to achieve some of these goals, but not others. In 2007, both Australia’s major political parties signed up to an aid target of 0.5 per cent of Gross National Income (GNI) by 2015. This represents a big change from the 0.23 per cent we fell to in 2002–03. When we reach 0.5 per cent, we will have reached the average of the world’s wealthiest countries, but no more. Nonetheless, this will see the aid program grow significantly. This therefore requires us to be confident that this expansion will deliver real, measurable results in reducing poverty, and that taxpayers’ dollars are well spent. That’s why in November 2010 I commissioned the first independent review of Australia’s aid effectiveness in 15 years. It was high time. And I would like to thank the Review Panel led by Sandy Hollway and made up of Margaret Reid, Bill Farmer, Stephen Howes and John Denton for their work. They delivered the report on budget and on time. The Independent Review has found that we have a good aid program and Australia is an effective performer by global donor standards. It has also made 39 recommendations on how the program can be improved further. The Government welcomes the Independent Review’s recommendations. Cabinet has considered the report and agreed, or agreed in principle, to 38 of the 39 recommendations. Cabinet has noted one further recommendation on the name of the portfolio which will be considered at a later date. An Effective Aid Program for Australia Making a real difference—Delivering real results v The purpose of this document, entitled An Effective Aid Program for Australia, is to outline the Government’s response to the Independent Review and set out the Government’s overall aid strategy through to 2015–16. The Government intends to build an aid program that: • establishes five core strategic goals: – saving lives – promoting opportunities for all – sustainable economic development – effective governance – humanitarian and disaster response • establishes 10 individual development objectives that flow from the above goals • focuses first and foremost on our region • accepts our global responsibilities, and • introduces a new system of overall accountability comprising a rolling four-year Cabinet review of the program’s overall performance against its stated objectives, as well as a new Transparency Charter for the Australian public so that taxpayers have greater visibility of how their dollars are being spent, and what results are being produced. The overall theme of this document is very simple—how to maximise the effectiveness and efficiency of the Australian aid program. Now comes the task of implementation. This will depend on AusAID’s leadership; our effective engagement with international development partners; as well as our effective partnerships with Australian business, non-government organisations, volunteers, and the wider Australian public. Above all, I want to see an aid program that is world-leading in its effectiveness, a program that delivers real and measurable results in reducing poverty on the ground, and therefore a program of which all Australians can and should be proud. Kevin Rudd Minister for Foreign Affairs, Australia vi An Effective Aid Program for Australia Making a real difference—Delivering real results Executive Summary Successive Australian Governments have recognised the Australian aid program as an integral part of Australia’s international effort. There is bipartisan commitment to the Millennium Development Goals (MDGs), and to scaling up our aid effort so that it reaches 0.5 per cent of Gross National Income (GNI) by 2015–16. Beyond 2015–16, as economic and fiscal conditions permit, Australia has an aspirational goal of raising aid to 0.7 per cent of GNI. This is a long-standing policy adopted by Australian governments since 1970. We are also committed to the most effective aid program possible—to get the best value for money and to make a real difference in reducing poverty on the ground. We are using taxpayer dollars for our aid program, so we have a responsibility to Australian taxpayers to make sure that programs they fund are effective. That’s why in late 2010, the Government commissioned the first independent review of the aid program in 15 years—a review specifically designed to assess the effectiveness of our current program and recommend where we could make it even better for the future. The Independent Review found that Australia has a good aid program and is an effective performer by global donor standards. It made 39 recommendations to further improve the program. The Independent Review identified ways to make Australia’s aid program more transparent, more accountable, more focused on results and on real, measurable value for money. The Independent Review analysed the overall purpose of Australia’s aid program and made recommendations on the appropriate geographic and sectoral focus of Australian aid, and the importance of effective partnerships in delivering Australian aid on the ground. The Independent Review also identified ways to give Australia’s aid program greater, longer-term strategic direction, including through reformed planning and budget measures. The Government welcomes the Independent Review’s outcomes and agrees (or agrees in principle) with 38 of the 39 recommendations. (The Government notes one further recommendation, on the name of the Ministerial portfolio covering the aid program, and will respond to this later.) Based on the Independent Review’s findings, this statement outlines a new framework for Australia’s aid program centred on delivering real results for poor people by maximising aid effectiveness.