SENATOR THE HON PENNY WONG

LEADER OF THE OPPOSITION IN THE SENATE

SHADOW MINISTER FOR FOREIGN AFFAIRS

LABOR SENATOR FOR SOUTH AUSTRALIA

SPEECH

2 November 2017

AUSTRALIAN COUNCIL FOR INTERNATIONAL DEVELOPMENT (ACFID) NATIONAL CONFERENCE

HAWTHORN

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(Acknowledgments omitted)

I would like to thank the Australian Council for International Development (ACFID) for having me here today.

As the peak body representing Australian international development organisations, ACFID aims to give the development sector in Australia a unified voice. And while finding a unified voice that speaks for 130 diverse member organisations is challenging, it is essential to ensuring you are heard – loud and clear – by both leaders and by the public.

Knowing that your voices are being heard in Canberra is important. So too is winning public support for your cause.

I would also like to thank all of you for being here today. You and the organisations you represent work tirelessly, and your efforts make a meaningful contribution to Australia’s role in international development.

Today I will begin to outline how Labor will approach international development policy. The opportunity to govern is precious, and if Labor has the great privilege of forming government, we don’t want to waste a day.

That is why Senator Claire Moore and I are working with a group of passionate and internationally-minded members of the Labor caucus on policy development. Over the coming months, our working group will continue to consider and consult on a future Labor Government’s approach to Australia’s aid and development program.

 

Current scene

My first memory of what we call “development assistance” was experiential – as a recipient.

As a small child, I remember lining up for injections at school in Malaysia, joining long queues with my classmates, as part of the World Health Organization (WHO) response to cholera epidemics.

As a kid growing up in Southeast Asia, close to the highly visible and immediate impacts of poverty, and as a Minister in a Labor Government, I have seen from both sides why development assistance matters.

So, I have always been proud that we do our part in the world, in pursuit of what Gareth Evans would call “enlightened self-interest.”

When I became Shadow Foreign Minister, over a year ago, it was in the wake of the emergence of a global humanitarian crisis of an unprecedented scale.

Over 65 million people are displaced globally, surpassing the number of people displaced as a result of World War II. This is a crisis which has been driven more by conflict than by lack of resources.

This and other recent events have led me to spend a fair bit of time addressing the uncertain times we are experiencing, a period characterised by widespread disruption.

I have said that the disruption that we currently face is driven by a range of structural factors, ranging from economic and social inequality, the movement of displaced peoples, consequent ethnic tension in neighbouring countries, and global surges in nationalism and populism.

This disruption, especially its connection to poverty and inequality, deeply affects international development and humanitarian assistance, and impacts the work that all of you do every day.

Despite the success of the Millennium Development Goals in halving the 1990 global poverty rate, around ten per cent of the world’s population still live in extreme poverty. 766 million people – 385 million of them children – were living on less than $1.90 a day in 2013.

And although poverty has been decreasing, inequality has been growing.

This reflects a deep change to the drivers of structural disadvantage. Global poverty can no longer be broken down into questions of wealthy people living in wealthy countries, and impoverished people living in low income countries.

One result of this is that more recipients of development assistance now live in middle income countries which means that the process of identifying cohorts most in need of development assistance is no longer a matter of dividing nations into two categories based on their aggregate GDP.

We have seen, over the last decade or so, many countries in our region graduate from low income to middle income status. But cohorts in these nations remain, who are in need of development assistance.

Our nearest neighbour, Papua New Guinea, is a case in point.

Using the World Bank metrics, Papua New Guinea is approaching middle income status, thanks largely to the successful development of its natural resources in oil and gas.

But a consequence of this rapid growth in national income has been rising inequality within the country and especially in rural areas.

When we should be working closely with Papua New Guinea to direct assistance where it is most urgently required, it finds itself disqualified from some multilateral support by outmoded classifications.

Australia must continue to consider how our development program interacts with recipient countries’ own funding priorities to address poverty reduction and eradication. We must look to our own experiences of inequality and work in true partnership with our neighbouring countries to ensure growth is shared.

Global poverty cannot only be addressed as a function of economic growth. And in the current climate, it is now even more apparent that for growth to have wide benefits, it must take into account distribution.

Increasing inequality means that aggregate GDP figures mean even less to development indicators in developing countries than they already did.

As Martha Nussbaum reminds us, in Creating Capabilities:

Development is a normative concept. It means, or should mean, that things are getting better. So to rank nations in accordance with their GDP per capita suggests that those at the top were doing better by their people, that human lives were going better… The problems with that way of looking at nations and regions should by now be all too evident.

In this current environment, there’s an immense need for support for development assistance to come before partisan politics. Global demand for development assistance has not subsided, but the global trend to isolationism and nationalism is putting aid under increasing strain in donor nations.

 

Cuts

The effects of disruption have a compound impact on communities who are already suffering from the effects of poverty.

These effects can be seen in some of the global humanitarian crises we are currently facing:

  • There are 13.5 million people in need of aid in Syria, in addition to the 5 million who have fled;
  • The world’s worst humanitarian crisis is in the Horn of Africa and the Middle East, with 23 million people struggling to access food and water as a result of poverty, drought, and protracted conflicts; and
  • Closer to home, over half a million Rohingyan refugees have been forcibly displaced from their homes in Myanmar since August.

And our immediate neighbours also face pressing challenges. For example, Timor Leste and PNG are two of the four countries in the world with the highest levels of child stunting due to malnutrition.

In regions where many of these crises are occurring, the Australian Government has made major cuts to aid.

Nearly 60 per cent of the world’s displaced people are being hosted in the Middle East and Africa, yet the current government have cut aid to the Middle East and Africa by more than 80 per cent since 2013.

I hardly need to tell this audience of the effects of the major reductions in Australian development assistance that followed the election of the Abbott Government in 2013.

In two years, the Abbott Government cut over $11 billion from the development budget.

If present policies are maintained, over the next decade, by 2027-28, our development assistance as a percentage of GNI will fall to just 0.16 per cent. In other words, while Mr Abbott is gone, the course his government set us on remains unchanged.

It took some time for us to see the impact of the initial cuts.

In 2016, Australian development assistance fell by 12.7 per cent in real terms, and Australia dropped three places in the OECD rankings on development assistance effort, to 17th.

The 2017-18 Budget then made further cuts to aid, $300 million over the forward estimates, which is expected to deliver the weakest levels of Australian development assistance in history, spending just 22 cents in every $100 of our national income on foreign aid.

The intractable opponents of Australian aid and development would have the Australian people believe that our aid and development budget was allocating $22 per $100, not 22 cents.

When told the truth about the quantum of Australia’s official assistance, Australians of all parties and shades of opinion know that we can and should do better than 22 cents in every $100.

Our collective challenge is to tell this truth loudly and clearly.

These cuts mean that Australia’s contribution to international development has fallen by almost a quarter at a time when the world is facing increasing, not decreasing, demand for support.

This translates into real human costs:

  • more maternal deaths;
  • fewer children vaccinated against preventable disease;
  • reduced access to basic sanitation and clean water;
  • a greater number of people experiencing food insecurity and famine;
  • fewer girls in school; and
  • a greater number of vulnerable communities experiencing disproportionate impacts of climate change.

These cuts have also translated into the abandonment of a nearly 50 year history of bipartisan commitment to development assistance in Australia.

When Labor was last in government, we grew the development budget every year, and nearly doubled its quantum from $3.1 billion to $5.7 billion between 2007 and 2013.

These increases were broadly supported by the then Opposition parties.

When former Prime Minister Kevin Rudd addressed this conference as Foreign Minister in 2010 he acknowledged the role of the then Opposition for supporting Labor’s work in expanding the development budget.

A year later, in the speech he gave at the launch of the Independent Review of Aid Effectiveness, he again acknowledged the role of the Opposition and the need for their continued support:

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.

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.

But despite, or perhaps because of, this almost half-century of Australia’s aid and development being largely free of partisanship or dispute, in 2013 the new Abbott Government took a radically different approach.

And in 2014, when my friend, and predecessor in this portfolio, Labor’s Deputy Leader, Tanya Plibersek addressed this same conference, she warned of the real consequences of the Abbott Government’s aid and development policies.

She told you then: “they aren’t just keeping quiet about these cuts, they actually see them as a political windfall. They are crowing about them.”

And she was right. Despite strident criticism from Labor, in the absence of a strong reaction to their abandonment of bipartisan support, or other public outcry, the Coalition went on to make further cuts to the development budget.

It has not helped that some activists believe passivity will remedy this.

The greatest shame is that even with Mr Abbott gone, Malcolm Turnbull and Julie Bishop have failed to change course.

 

Call for a bipartisan approach

But, as we say in politics, we are where we are.

All of us here today, as well as the recipients of Australian aid, are best served if the aims, purposes, and objectives of Australia’s aid and development programs are understood and broadly owned across the Parliament and the electorate.

I want public trust and confidence in our aid and development programs to be rebuilt across parties. I want to see an end to the reckless politicisation of aid and development that erupted under the Abbott Government.

We must directly challenge those who refuse to accept evidence, facts, and figures that show conclusively how aid and development has worked.

Our challenge now is not purely a political challenge – it is not a fight to be had between conservatives and progressives, between left and right.

The challenge now is that our development assistance is on an ever-diminishing trajectory, an ever-diminishing trajectory that cannot be turned around by a single budget, or in one term of government.

Changing this current trajectory is a challenge on which we must meet.

So that is why today, I am calling for members of the Coalition to work with us. Labor calls on the Liberal and National parties to join us in a bipartisan commitment to rebuilding Australia’s aid and development programs.

The only way to protect development assistance from threats posed by populism – and the nationalist rhetoric of parties such as One Nation – is to place it beyond party politics.

We also must make our aid and development more transparent, accountable and focussed on achieving clear outcomes than ever before.

The Australian public must be convinced that every dollar of Australian aid is going to where it can do the greatest good with the lowest transaction costs.

Members of Parliament, and not just the government of the day, have a critical leadership role to play in making the case for development assistance to their constituents and to the public.

Rebuilding consensus will take years, and more than the term of one government, but we must start this journey now.

 

Diagnose the problem

We got to this point – the point where bipartisanship is a question in relation to Australia aid – firstly because of the cuts I already outlined.

But the Government’s $11 billion cut was also accompanied by a radical architectural change.

The incoming Abbott Government in 2013 abolished AusAID and absorbed its functions and personnel into the Department of Foreign Affairs and Trade.

The decision to abolish AusAID was taken in secret.

It was never referred to in the 2013 election campaign or canvassed with the development sector in any way.

It was not a decision that Labor would have taken.

We have been clear about that.

But you can’t unscramble an egg.

If and when the ALP comes to government, we will work with the changes that have been made.

A Shorten Labor Government will do everything we can to ensure that:

  • Australian aid is prioritised and valued within the department;
  • as much as practicable, that Australia’s diplomatic and development agendas are aligned, making Australian aid and development a core function of Australia’s foreign policy; and
  • our aid and trade agendas reinforce each other rather than being seen as competitors.

Restoring bipartisanship to Australia’s approach to development assistance extends beyond quantum, it’s also about purpose and intent.

A future Labor Government will take the view that to get our Australian aid program back on track, we need to do much more than restore a growth trajectory – aid effectiveness is critical.

The amalgamation of DFAT and AusAID has led to a loss of technical capacity and engagement on aid delivery.

After the dust of voluntary redundancies settled, 19 out of 30 SES redundancies were from the pre-merger AusAID side. This is a loss of leadership amongst the technical experts who understood how to secure the best value for our aid dollars.

This simply must be rebuilt.

One of the worst consequences of the amalgamation of AusAID and DFAT has been the understandable need to devote endless management time and resources to internal administration and reorganisation.

As a result, focus on outcomes and lines of responsibility have become blurred.

The decision to outsource and privatise key aid and development programs greatly compounded this administrative complexity and confusion.

Between 2012-13 and 2015-16, years when the annual aid budget fell by a billion dollars, the proportion of aid expensed through contracts to large for-profit companies increased from 16 per cent to 20 per cent.

In other words, private contractors are getting a growing portion of a shrinking pie. Last financial year, nearly a quarter of a billion dollars of DFAT ODA was delivered through the top three contractors alone.

Further to this, we know that NGOs are subject to greater accountability measures, and generally have more community buy-in in aid delivery than private sector companies. This is one of many points Labor MPs and Senators discussed with those of you who attended our recent policy roundtables.

Of course, there is a role for the private sector in delivering and collaborating on development assistant. And Labor sees a balance between public, private and NGO delivery mechanisms as part of a healthy Australian aid program.

But we have heard concerns on the rapid growth and concentration of development assistance delivered through a small number of private contractors.

This raises a few important questions around:

  • Under which circumstances the private sector is determined to be the most suitable delivery partner;
  • Whether the concentration of ODA being delivered through contractors maximises aid effectiveness;
  • How to ensure the role of for-profit businesses is consistent with the principles of Australian aid; and
  • Whether the current transparency standards are sufficient and represent a level playing field for all delivery partners.

Labor governments have always prioritised aid effectiveness, and for a future Labor government that will mean questioning whether the current government’s apparent emphasis on large for-profit contractors delivers proper value for Australian taxpayers, or demonstrably better outcomes in recipient countries.

 

Values

Over the course of this year, I’ve outlined my view of Australia’s national interest and values.

Australia’s development assistance should be firmly located in both.

Development assistance should be consistent with our national interests, and it should also reflect our values. It should be an intrinsic part of how we see our foreign policy.

Australia has a deep interest in ensuring that globalisation, interconnectedness, and open trade continue to be constructive and unifying forces.

We have a deep interest in ensuring that women and girls in our region have equal access to opportunities, alongside their male counterparts. We welcome the fact that the Foreign Minister, Julie Bishop has made gender equality a priority of the Australian aid program. Labor would gladly build on her work in government.

A task for a Labor Government will be to ensure DFAT has the capability and structures to enable the genuine alignment of development assistance with Australia’s diplomatic agenda.

We will also seek to ensure that our development agenda reflects Australia values – egalitarianism and the principle of a “fair go”. The sort of economic growth our development assistance will pursue, will be shared growth.

A Shorten Labor government’s approach to Australian aid, in keeping with that of past Labor governments, would be both purposive and principled.

It would be guided by the following points:

  • Making poverty reduction and poverty eradication core objectives of the aid program;
  • Ensuring that Australia’s national interests are also served by the program, primarily through the protection of peace, stability and prosperity in our region;
  • Focusing on the areas of development where Australia is best placed to make a meaningful difference; and
  • Making an effective contribution, through constructive internationalism, to the international rules-based order and Australia’s ability to influence in global and regional affairs.

 

Conclusion

As Foreign Minister, I would seek to restore transparency, accountability and an emphasis on aid effectiveness to the program, so that Australian aid is something of which all Australians can be proud.

I would also seek to align our development program with our diplomatic agenda, in a way that reflects Australian interests and Australian values.

The greatest challenge will be restoring a growth trajectory to our development budget, and in meeting that challenge, Labor will need your help.

We need you to remind all sides of politics, and the community, why Australian development assistance matters so much to both those who benefit as those who give.

As we grapple with a world confronting unprecedented disruption, let’s work together to ensure that Australia can again have an aid and development program that is as generous and open-hearted, as the Australian people are.

Thank you.