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It is also instructive to look at the role that the previous government was willing for AusAID to play in aid policy development and aid delivery globally. As an insider I found the level of resources dedicated to engagement with other donors beyond simple country program harmonization, for example, to be quite astonishing. High level consultations with all and sundry, MoUs left and right, speeches, press releases, briefs and international travel - all with questionable impact on poverty and negligible return for taxpayers. To this day I'm not sure whether this was driven by ministerial imperative, genuine aspirations to global leadership, or just some bureaucratic empire building vanity project. In any case, it will be interesting to see whether this type of business remains a consideration in the staffing profile of the new DFAT.

Hi Grant, An understanding of history teaches us about the present - the table below is in the reference I cited - it helps understand the precedents of the "lost decade." Table 1: Key contextual factors which have shaped the health system Pre-Independence (Pre 1975) • Significant gains made in the health status of the population, with improvements directly attributed to the provision of health services (2). • Centralised organisation and administration of health services, with highly-defined vertical public health programmes designed and implemented with emphasis at the district level. • Highly centralised control ensured effective management of resources by a functioning bureaucracy that closely supported delivery and management of health services. • Provincial hospitals provided technical and logistical support whenever required. • Significant numbers of international contract officers in line management and service roles at national, provincial and district levels. Early 1980s • Australia provided direct budget support after Independence. • No bilateral donors in the health sector (only the Asian Development Bank (ADB) and the World Health Organisation (WHO); and ADB funds flowed through the government budget). • Coordinated process in place for planning the development budget, and clear separation of the recurrent and development budgets. • Organic Law on Provincial Government (OLPG) - Rural health services were transferred to provinces; hospital services were delegated to provinces. (See also Day in this volume). • National Department of Health (NDoH) left with no effective mechanism to maintain standards and ensure health policy implementation in hospitals and rural health services. • Provincial governments saw the decentralisation as a chance to ignore the NDoH. • Appointment of provincial health officers became politicised. • Mobility of the health workforce declined as staff became part of provincial establishments. • Functional roles and responsibilities were poorly defined; leading poor resource allocation, lack of coordination and inefficient management of health services, and the deterioration in quantity, quality and coverage of basic health services. • Wingti Government redirected resources to economic sectors, resulting in a progressive decline in the available resources for the operation of health services. Late 1980s • 1986 – Australia began discussions about moving from budget support to programmed aid. • PNG reacted by turning to other donors. In a very short period, the following donors became active in the health sector: United States Agency for International Development (USAID; Japan International Cooperation Agency (JICA); People Republic of China and the European Union (EU). The net effect of multiple bilateral donors created a huge management burden on the NDoH. Much of the funds were extra budgetary funds and not reflected in official budgets. • 1983–1988: real per capita expenditure for health fell by 9%. • Capital expenditure on hospitals fell from about 14% in 1978 to 4.5 % in 1987. • Projected a shortfall of K24.7 million in 1995 to grow to K40 million by the year 2000 (19). • Aid post orderlies became public servants. • Rural patrol allowances were more than doubled in a single decision, but were not budgeted for, with the effect that patrols were significantly reduced. 1990s • Major revenue shocks. • Bougainville crisis – Bougainville contributed approximately 16% of national revenue. • 1990 - 10% devaluation of kina. • 1994- further devaluation of 12 % and floating of kina resulting in further devaluation. • Progressive reduction in Australian budget support from 24% of total revenue in 1984. • Staffing shortfall estimated to be 1,440 nurses and 1,655 community health workers (3). • Public Hospitals Act (1994) makes hospitals quasi-statutory authorities, responsible to an independent board of management reporting to the national Minister for Health—largely causing hospitals to stop supporting the rural health care system. • Economic crisis point in 1994–1995, with several branches of government unable to meet debts or salary commitments. • Structural adjustment programme and a programme of microeconomic reforms including to reduce public servants— aid post orderlies, now public servants were shed in large numbers by provinces as part of the reforms. • By 1999, the Australian Agency for International Development (AusAID) had 16 separate projects and programmes operating in the health sector. • In 1999 the Secretary for Health reported he spent 70% of his time servicing donors. • In 1999, the NDoH requested that AusAID support a move towards a Sector Wide Approach (SWAp) in the health sector.

As Robin has pointed out the increase in staff numbers was necessary to effectively plan for and administer the planned increases in ODA to 0.5% of GNI. The 2013-14 budget identified that AusAID departmental costs would be $375m and use 6.6% of ODA (see Table 1 p11 AusAID budget papers). Applying this dollar amount of admin funding to the planned 0.5% level of ODA results in an admin to ODA ratio of 4.9%. The most recent OECD DAC statistics report that the (weighted) average level of administrative costs was 4.8% for all DAC donors (DAC Table 13: Comparison of flows by type in 2011)

There are various ways to slice and dice the numbers but the overall message is the government is clearing the way for significant cuts to staff. For instance, the 251% figure I cited in the story wasn't one that I came up with based on AusAID annual reports -- it was from a government spreadsheet showing the increase in full-time equivalents from 2008-08 to 2013-14. To be precise, from 674 to 1944 full-time equivalents. When I checked the annual reports I obviously found different numbers. And the numbers differ again depending on whether you include locally-engaged staff (as I did but you didn't). The numbers in the annual report showed a rise of more than 200% (including locally-engaged staff) so I used that. This only matters in terms of what is driving government policy here. The government is clearly preparing the ground for staff cuts -- possibly redundancies -- and that is the thrust of the story. I think it would be mistaken to dismiss the government comments in the story too lightly -- e.g. "Cormann’s remarks were striking but perhaps ephemeral." They're actually a very grim sign for AusAID staff. Whether you believe in spending more or less on foreign aid, and whether you prefer Labor or the Coalition, the comments in the story should be taken as a signal of government intent. regards David

Margaret, It would be good to also keep a balance on the way foreigners who also gain from big mining projects in PNG. I work for a mining company and I tell you the salaries paid to expatriates who you claim to be 7.3% of the workforce, are paid higher than those qualified nationals who make up 92.7%. I suggest you also use the same methods to do a similar case study on the benefits foreigners gain from the big mining companies as well rather than imposing big development benefits on PNG when we know all our river systems are destroyed by mining.

...of course he reason for the sharp rise is two-fold, one is the security crisis of 2001-2005 (now diminished) and the second is the rise of BRIC donors (mainly China) through the 2000s to date. The question is do the DAC donors have the stomach for or care for an aid/influence fight with the non-DAC donors and aid recipients on the nature and direction of third world development, and do the voting public care.

Stephen, Thanks for pointing out the difference a few words, or even the order of a few words, can make to our understanding of the objective of the aid program. I was very enthusiastic about the objective of the aid program coming out of the Independent Review of Aid Effectiveness which actually put people in there for the first time, not just countries. However, from this outsider's perspective, this very fundamental change to the objective didn't ultimately have a major impact on policies and programs which were delivered. As Jane Thomason has said "I’m less concerned about how the government frame their aid policy and more concerned about how that translates into development programs on the ground that change people’s lives." This is not to say that the objective does not matter. You haven't commented on the sentence after the objective in the Secretary of DFAT’s memo: "It [the aid program] will be designed and implemented to support Australian foreign and trade policy". This seems to be the key to how the objective is intended to be implemented. The Coalition’s Foreign Policy statement, released ahead of the election, sets out areas of focus, such as Women’s leadership, which one can assume will be taken forward through the aid program and it emphasises “strong and effective relationships with our neighbourhood”. This is an area where the aid program has always played a role and it will be important to remember that this cannot only be at a government to government level. Governments change and enduring relationships must exist on many levels. The Coalition’s Foreign Policy goes on to state “The coalition will ensure Australia’s economic interests underpin the operations of DFAT. There will be an unambiguous focus on promoting the interests of Australian businesses abroad.” The elevation of business interests and economic diplomacy to a core objective of Australian International Policy is a theme which echoes across both this statement and the Coalition’s Trade Policy Statement. It seems likely from these documents that under the Abbott Government, Australia’s economic interests will be an important driver of the aid program into the future. The key issue then becomes the extent to which short-term economic interests or long-term, less certain interests, dominate. As a long term investment, reducing poverty and improving living conditions for the poorest people in our region will promote our economic interests. I hope this long term view is not crowded out by short term considerations such as using aid to seal trade deals in the short term.

Who'd want to be a public servant! Mumbo jumbo masquerading as public policy.

The advantage of (F) is that the definition of national interest is a strategic/political one (assuming it refers to sectors and geography) while the rest is one a set of principles which should be bi-partisan,and it is the balance among the national interest(s) (and perhaps 'direct growth' or 'direct poverty reduction') issues that is ideological.

Thanks for the reference Jane, we'll be sure to check it out.

Hi Ron, Thanks for the comments. The blog highlights some of the preliminary results from the PEPE survey. We’re still in the early stages of data analysis, which has been focused on outputs (we’ve got at least another year of analysis still to come). Over the next few months we’ll be examining how the schools we visited faired in terms of student performance, and we’ll look at some of the drivers of education outcomes. Having said this, the preliminary results do augment our understanding about the condition of schools and health facilities, and how this has changed over the past decade. Policy makers are finding these results useful. Our findings have informed debate around the new free health policy, and the Acting Education Secretary has said he’ll use the results to argue for a prioritisation of education funding. You can hear the Acting Education Secretary talk about the findings of the PEPE study here: http://www.radioaustralia.net.au/international/radio/program/pacific-beat/png-government-tackling-shortage-of-thousands-of-teachers/1203380 Cheers, Grant

Hi Stephen, as I said, I do enjoy the devpolicy blog with my morning coffee. After 30 years in international development on all sides of the fence, I am both a pragmatist and a realist. After two years in the UN System recenty I have wordsmithing fatigue. How many policy statements have we seen over the years that are not implemented, or not implemented with fidelity to their intent? .... I think the government have been broadly clear about their intent - and I and the other pragmatists amongst us will look forward to how this unfolds in the field. ... And of course to the next devpolicy blog with our morning coffee!