New Tasmanian Senator bids for the aid budget

Newly anointed Palmer United Party (PUP) Senator Jackie Lambie certainly wasted no time in raising her gripes with the foreign aid budget—something she has had her sights on since last year.

A question without notice directed to Senator Eric Abetz about support to reduce the high levels of unemployment in Tasmania quickly morphed into an attack on the aid budget in the Senate earlier this month.

After Senator Abetz unsatisfactorily answered Senator Lambie’s original question, which included a request for $5 billion of Commonwealth funding (a number suspiciously close in value to our $5 billion aid budget), Senator Lambie followed up with this:

“The minister in his answer has failed to properly address my request for his support for an extra $5 billion of Commonwealth funding for Tasmania. Does the minister agree that his Liberal government has made plans to borrow $30 billion over the next five years so that he can give it away in poorly targeted foreign aid? Can the minister explain why the poor, the sick, the needy and the unemployed of other countries are more important to him than those in his own home state?”

Abetz responded with the usual, highlighting the need for balance, the government’s steps to rein in the previous government’s aid spending and its support for aid to the region. Senator Lambie was not satisfied.

“The minister has again failed to properly address my request for his support for an extra $5 billion. Can the minister explain to the chamber why he is prepared to fight for record amounts of Australian taxpayers’ money to be sent to other countries—some of which have militaries 10 times the size of ours—while the sick, the needy, pensioners, parents, students, the unemployed and the battlers in his home state of Tasmania are being harmed by his government’s budget cutbacks?”

Given that we do support other small island states that struggle with low levels of literacy, high unemployment,  and relatively undiversified economies, perhaps Senator Lambie sees some affinity between Tasmania and the countries of the Pacific.

It already receives substantial volumes of aid from the mainland (but unlike Nauru, for example, Tasmania’s asylum seeker processing centre has closed, taking many jobs with it).

In all seriousness though, Tasmania may be a poor performer in the national context, but it is still extremely well off by regional standards.

Australian and Tasmanian per capita GDP (2012) compared to top 10 recipients of Australian aid

tassie

Notes and sources: World Bank Databank. The ratio of Tasmanian output per capita to Australia’s as a whole was determined from this source and then multiplied by the Australian GDP per capita provided by the World Bank Databank. Purchasing power parities are used to compare incomes across countries; 2005 prices are used.

This graph compares the per capita income of the top ten recipients of Australia’s aid, with the per capita income of Australia, as well as Tasmania. Yes, Tasmania is significantly poorer than the rest of Australia, but it is a helluva lot better off than the countries which receive our aid. It is close to six times richer than our richest recipient, Indonesia, and nine times richer than the average. And its not just income. The 2010 infant mortality rate in Tasmania (per 1000 live births) was 4.5—in PNG it was 51.

As the 2011 Aid Review put it, Australia gives its aid to countries where people live “in conditions far below what Australians find acceptable.”

The other point that the Senator misses is that we only give 1.2% of our federal budget to the overseas poor. This is hardly the outcome one would expect if the global poor did actually matter more to us than our own poor.

We’ve already seen PUP try to exert influence in the new Senate in the climate tax repeal debate. Let’s hope that it doesn’t see aid as a chip to play in future Senate deal making, or, if it does, that it shows a bit more common sense and compassion.

Ashlee Betteridge

Ashlee Betteridge is the Program Manager (Research Communications and Outreach) at the Development Policy Centre. She was previously a Research Officer at the centre from 2013-2017. A former journalist, she holds a Master of Public Policy (Development Policy) from ANU and has development experience in Indonesia and Timor-Leste.

Stephen Howes

Stephen Howes is the Director of the Development Policy Centre and a Professor of Economics at the Crawford School. Stephen served in senior economic positions for a decade at the World Bank before becoming AusAID’s first Chief Economist. In 2011 he was a member of Australia’s Independent Review of Aid Effectiveness.

4 Comments

  • Senator Lambie strikes again, in Hansard from the Senate yesterday.

    In her spiel on the budget measures, Senator Lambie suggests alternate cuts could be made “by halving Australia’s record foreign aid budget by $15 billion, so it is reduced to $15 billion from $30 billion.” It should be noted that the aid budget is roughly $5 billion… not $30 billion. It is also not a record aid budget.

    “Why should billions of taxpayers’ dollars be given to overseas countries—Indonesia, $565 million—some of which have militaries that are 10 times the size of ours and in one case, Pakistan, $75 million, which is nuclear armed. The needs of the average Australian family should be put before the back pockets of corrupt foreign aid officials, because, quite simply, charity begins at home.”

  • It seems Senator Lambie is on a crusade on this. From The Guardian last week:

    “Hockey met with the Tasmanian PUP senator Jacqui Lambie, who told him the party would “hold firm” against budget savings that would hurt average Australian households. But Lambie said she had suggested during the 2.5 hour meeting that the government make even greater cuts to foreign aid. The Coalition has already budgeted foreign aid savings of $7.6bn over five years – a measure that does not require legislation.”

  • Let’s not forget two other important points:

    1. Unlike people from developing countries, Tasmanians are free to move to other states in search of employment or higher wages – and many do.

    2. Tasmania is supported by the Commonwealth Grants Commission, which redistributes GST revenue from other states towards Tasmania. Other fiscal transfers are also very significant, given that tax revenue from Tasmania is lower on a per capita basis than for other states, while benefits (pensions etc) are higher. The WA Govt bitterly complains that it transfers $20bn to other states each year. Tasmania receives over $4.5bn – similar to the entire aid budget, and much larger than any the share of aid received by any one country!

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