Scott Morrison’s $250m aid announcement may sound like a lot, but this is not a huge act of generosity

Scott Morrison’s announcement during his visit this week to the Solomon Islands that the country would receive $250m in grants has been hailed as a sign of Australia’s increased commitment to the Pacific region as part of the much-feted “Pacific step-up”.

But the money tells us a lot more, offering a window into Australia’s fears about China, its attempts to win over neighbouring countries and Australia’s “dereliction of duty” when it comes to aid.

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Here are five graphs that help unpack what this money reveals.

We are not very generous

Australia should be careful about how loudly it trumpets this gift – $250m might sound like a lot, but in reality this is not a huge act of generosity from the Australian government.

First, the money will be spread over 10 years, making it less impressive. It is also not new money, but comes out of the existing aid budget and the existing Australian foreign aid budget is at its least generous level ever.

The most common measure of aid spending is how much foreign aid is spent compared with gross national income (in layman’s terms, how many cents are spent on foreign aid for every $100 Australia earns).

In the next financial year, Australia will spend just 21 cents on foreign aid for every $100 the nation earns, a historic low, and down from a peak of 33 cents in 2013-2014.

These cuts have come despite the fact that the UN mandated a target for wealthy countries of reaching foreign aid spending compared to GNI of 0.7 (70 cents).

When he was first elected, Morrison praised previous governments for increasing foreign aid and said the country “still must go further”.

“The need is not diminishing, nor can our support,” he said, calling deaths of the world’s poor “a true moral crisis that eclipses all others”.

Despite these fine sentiments, under Morrison’s leadership, and that of his two Coalition predecessors, foreign aid compared to GNI has plummeted.

“Australia has now fallen to the bottom third of OECD countries in regard to our generosity and we’re sharing this club with countries that have been through severe recessions such as Portugal, Greece and Italy,” said Jonathan Pryke, director of the Pacific Islands program at the Lowy Institute.

“It’s a pretty hard pill to swallow given we’ve had 27 years of uninterrupted economic growth, and we’re one of the most prosperous nations in the world, when you look at our GDP per capita. I think it is a dereliction of duty.”

We are keeping things increasingly local

The Coalition has made it very clear that it wants to refocus Australian foreign policy on the Pacific region, so it should come as no surprise that any big aid announcements by Australia are about money for that region.

Morrison’s “Pacific step-up” is not just about aid, but aid is a factor and an arena in which China and Australia duke it out for influence. Australia has traditionally been the most significant donor to the Pacific, but in 2017 China committed to spending more than four times as much as Australia.

This battle for influence is partly why the Pacific has been largely protected from cuts to the foreign aid budget.

Because there have been cuts in all other regions, the Pacific now receives a huge proportion of Australian aid. In 2013-14, 21.1% of the foreign aid budget was spent on the Pacific region, in 2019-2020 the Pacific will receive an unprecedented 35% of the aid budget, with $1.4bn pledged.

According to Pryke, this is “a strategic decision”, in part to counter the influence of China in the region.

“It’s never been decided purely on need,” said Pryke. “That’s why you see a concentration of aid in our immediate region – Asia, the Pacific – and far less in Africa. That’s a reflection of the fact we have far greater influence and importance in that part of the world, and that in lots of Pacific countries we are the primary aid donor, so they would feel cuts more acutely.”

Stephen Howes, the director of the Development Policy Centre at the Australian National University, says there is a danger of concentrating our aid in the Pacific region.

“I personally feel we should make sure we don’t neglect the big global crises … and just retreat to the Pacific region, which is already the most aid-dependent region in the world,” he said.

Howes added that DFAT’s own research showed that aid projects in the Pacific were less effective than in other parts of the world, due to governance issues.

“Aid is not really the answer to the Pacific, that’s clear, that’s why it was good to see some small announcement on labour mobility [from Morrison in the Solomon Islands], that’s where we should be focusing our efforts.”

Bridges and roads, not health and education

The fact that the $250m program announced by Morrison is largely about infrastructure reveals a shift in Australia’s thinking about aid.

Traditionally, Australian aid has focused on programs around health, education and gender equality. But over the last decade, and particularly in the last few years, the budget has moved away from these programs and toward infrastructure spending, which is how China typically provides aid to the region.

In 2011-12, 16% of the Australian foreign aid budget was set aside for infrastructure, trade, agriculture, fisheries and water. In the 2018-19 budget, 28.8% of the budget was dedicated to those areas while the proportion of the budget spent on health, education and governance programs fell.

“That’s really Julie Bishop’s legacy,” said Howes. “Julie Bishop wanted the aid program to focus more on economic development and trade.”

Pryke said the shift also has a lot to do with countering China’s influence.

“Australia needs to provide viable alternatives to what China has to offer, and China offers a lot of infrastructure,” he said.

Matthew Clarke, professor of international development at Deakin University, said infrastructure money is often welcomed by Pacific leaders who feel pressure to show they have delivered for their communities.

“There’s a great difference between the delivery or a building or a highway to a health program or an education program,” he said. “When those services are less material – it might be the payment of salaries to teachers, or the delivery of community awareness programs – it’s not as easy to take credit, and to demonstrate what you’ve delivered to your community.”

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Howes said that while Pacific countries need infrastructure – “you need roads to go to school” – there was a cost to the increased spending on infrastructure, especially in the context of the declining aid budget, at the expense of crucial programs.

He also said the government should make sure its “decisions are based on sound development logic, and not driven by geopolitical considerations.”

Howes offered the example of Morrison’s announcement that Australia would fund elite Solomon Islands’ sportspeople to train in Australia, a program that does not come out of the aid budget.

“You’d question whether this is a really good use of money. Solomon Islands is still a poor country, it still has high levels of malaria and basic diseases, so we really need to prioritise on the key issues and try to limit the goodwill gestures that have very little payoff for development,” he said.