Foreign aid cuts make up one fifth of budget savings

Updated

The single biggest saving made in the 2014 federal budget was a reduction in foreign aid spending.

On Twitter, World Vision Australia chief executive Reverend Tim Costello said the cut made up about one fifth of overall budget savings.

He accused the Government of balancing the books on the backs of the poor.

"Of the $36 billion Government budget savings - aid cuts contribute 20 per cent when aid is only 1.3 per cent of total budget," he said.

The claim: Tim Costello says foreign aid cuts make up 20 per cent of the budget savings, while aid expenditure is only 1.3 per cent of the total budget.

Tim Costello says foreign aid cuts make up 20 per cent of the budget savings, while aid expenditure is only 1.3 per cent of the total budget. The verdict: Cuts to foreign aid account for 21 per cent of the total budget savings, and aid is 1.22 per cent of budget spending and forecast to fall.

Budget savings

ABC Fact Check asked World Vision where Mr Costello got his figures. A spokeswoman said that they were drawn chiefly from the 2014-15 Budget Overview released with the budget papers on May 13.

The budget included cuts to aid spending in the current financial year. These were announced in January by Foreign Minister Julie Bishop, who said that in 2013-14 aid spending would be $5.042 billion. Her predecessor Bob Carr had forecast aid spending of $5.666 billion for 2013-14, so Ms Bishop's announcement represented a cut of over $600 million.

The Budget Overview contains that cut, and forecast cuts of $601 million in 2014-15, $1.2 billion in 2015-16, $1.7 billion in 2016-17 and $3.5 billion in 2017-18. These cuts total $7.6 billion over five years, with the largest cut coming in 2017-18, when Labor had planned to increase aid spending to reach 0.5 per cent of Gross National Income (GNI). The 0.5 per cent is linked to the United Nations' Millennium Development Goals, which call on countries to commit 0.7 per cent of GNI to aid.

According to the Parliamentary Library aid spending has been around 0.35 per cent of GNI in recent years.

The Coalition has also committed to increasing aid funding to 0.5 per cent of GNI, but has not committed to a date, citing the state of the budget as the reason.

The foreign aid cuts are the largest in a table in the Budget Overview summarising the major savings announced on May 13. The total major savings in the table amount to just over $35.7 billion.

As a percentage of that figure, the savings made in "official development assistance", or foreign aid, add up to just over 21 per cent.

Share of the total budget

To determine the percentage share of the overall budget spent on foreign aid, World Vision compared aid spending, as shown in the budget papers, and total government payments, as shown in the Budget Overview, between 2013-14 and 2017-18.

This table shows those figures and Fact Check's calculation of the percentages involved:

Year Aid spending ($b) Total budget expenditure ($b) Percentage 2013-14 5.032 410.662 1.22 2014-15 5.032 412.484 1.21 2015-16 5.034 424.249 1.18 2016-17 5.160 443.913 1.16 2017-18 5.289 467.060 1.13

Over the five years aid spending is no more that 1.2 per cent of the total budget, reducing to 1.1 per cent in 2018.

The verdict

The cut to official development assistance makes up 21 per cent of the major budget savings announced on May 13. The percentage of the total budget spending on aid is currently 1.22 per cent and is forecast to fall. Mr Costello's numbers check out.

Sources

Topics: federal-government, budget, foreign-affairs, relief-and-aid-organisations, australia

First posted