Where now for Australian aid?

Minister for Foreign Affairs Penny Wong in Samoa, June 2022 (Sarah Friend/DFAT)

Late last month, in the middle of the night, in an old wooden house huddled against one of Wellington’s many storm swept hills, a man stood, half awake, muttering at a softly glowing phone. “They won? They actually won. What on earth does this mean for Australian aid?”

That was me of course – struggling with time differences and trying to get my head around the turning tides of Australian political fortune. It has been almost a decade since the tides last turned, and since then Australian aid has been cut, contorted, zapped, and transformed – all largely for the worse.

But now a new government has been elected: one which is home to a group of pro-aid politicians. Foremost among these is Penny Wong: she’s Foreign Minister, powerful within the Labor party and cares about aid. Pat Conroy, the Minister for International Development and the Pacific, is also set to be crucial. And when he spoke at ANU prior to the election, he promised an Australian aid program with a broad, considered focus, working in areas such as climate change, gender, poverty reduction, health and education.

This must bode well for Australian aid, right?

I’m not sure.

While Conroy’s pre-election promises were great, as my colleagues Cameron Hill and Huiyuan Liu have shown, adjusting for inflation, Labor isn’t planning to actually increase Australian aid. And the tough truth is that a stagnant budget will make it difficult to broaden aid’s focus. Under-performing projects can be replaced. But that’s harder than it sounds, especially in a hurry: few aid projects are abject failures, most exist in the uncertain realm of “might be helping”. If Labor really wants to do more, it needs to spend more, otherwise it will be forced to close potentially useful projects. The only other alternative is dubiously recategorising aid projects so that they seem to be something they aren’t. (This is, as I’ve shown, a real issue in climate finance, in particular.)

Then there’s China. China’s aid to the Pacific is, if anything, waning. But its presence in the region has twisted the grammar of international commentary such that it is now almost impossible to use the word “Pacific” in a sentence without also saying “China security threat!”. This is a problem because the Pacific faces many other challenges that are being crowded out by Chinamania (climate change, poor development progress, COVID-induced economic woes, troubled elections in PNG, aspiring rulers for life in Solomon Islands and Fiji …). It’s also a problem because geostrategic wrestling with China is harming aid. The more Australian aid is focused on countering China and shoring up allegiances with political elites in Pacific countries, the less likely it is to actually help people in need.

In his ANU speech Conroy framed this challenge in the best possible terms. He suggested he believes that better development outcomes will themselves diminish China’s influence. That’s great. I share his belief. But it doesn’t necessarily tell us how the government will behave the next time someone gasps, “China’s promised a gaudy, largely useless, piece of infrastructure to Country X, unless we deliver something twice as big, Country X will become part of China’s sphere of influence!”. Labor’s sentiments are a good start. But it will take real, practical determination in coming years to prevent aid effectiveness from being undermined by competition with China.

Finally, there’s the question of DFAT’s capacity to effectively deliver aid. Expertise was an early casualty of AusAID’s demise. There are still bona fide development experts in DFAT, but they’re often isolated or spread too thin. If Labor wants to improve Australian aid, it needs to provide DFAT with enough development practitioners to undertake the time-consuming task of effective aid delivery. Development expertise also needs to be recognised and rewarded within DFAT. Ultimately, this will need structural change. It’s all possible, but won’t be easy.

And that is where we are at present. The tides of Australia’s politics have turned. For the first time in nearly a decade, a pro-aid government is in power. It’s home to talented politicians who want aid given well. That’s a necessary condition for improving aid. But it is not sufficient. To really rebuild Australian aid, all of us – politicians, DFAT, the entire aid community – will have to work hard. The tide alone won’t take us where we want to be.

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This research was undertaken with the support of The Bill & Melinda Gates Foundation. The views represent those of the author only.

Terence Wood

Terence Wood is a research fellow at the Development Policy Centre. His research focuses on political governance in Western Melanesia, and Australian and New Zealand aid.


  • Hi Terence – from your colleague delivering a program titled “Policy Monitoring and Evaluation” to students at the University of Papua New Guinea.

    I’ll repeat – for your possible comments too – part of my earlier comment on https://devpolicy.org/the-coalition-and-aid-a-story-of-two-halves-20220603/

    More generally across the APS, former Prime Minister Morrision promised to embed program evaluation (back) into the APS (following the Thodey Review) – from which it had been allowed to lapse in the Howard years after 1996. This requirement applies to DFAT too.

    The Department of Finance’s Resource Management Guide 130 on APS program evaluation
    (https://www.finance.gov.au/government/managing-commonwealth-resources/planning-and-reporting/commonwealth-performance-framework/evaluation-commonwealth-rmg-130) is only the beginning of this embedding. It can all too-easily be ignored by time-poor and/or indifferent APS management. Especially in the aid area.

    More to the point, I do suggest that it is not the changing amount of dollars in any aid budget that should be the target. It’s what those dollars later achieve – demonstrably.

    Like children vaccinated; clean water projects delivered; maternal mortality reduced (as just some examples in the Health area with which I’m familiar). Again to the point, I do not recall any Foreign Minister publicising such results and highlighting just exactly why Australia delivers foreign aid.

    And thus creating a domestic constituency for this Budget and Australia’s part in reducing poverty and hunger in the developing world. In 2017, just under 700 million people globally were living in extreme poverty on the World Bank’s revised figure of US$2.15 a day.

    As Scott Bayley has suggested, Australia’s programs for reducing these poverty levels need to be removed from Ministerial and political priorities and handed to independent experts.

  • Hello Terence. I agree, nothing could be more fruitless. Prestige projects may look like progress but they are not. PNG has one of the highest maternal mortality rates in the world among other indicators they could not be happy with. Mostly preventable. Potential solutions are complex and will take time to implement. But here’s the sad thing. The models of development supported by a precession of our governments have been wide of the mark. Top down, “one way street” systems generally don’t work in Melanesia and probably never will. We ignore the community contribution at our peril. It is time to put resources into working directly with communities to build a foundation of financially self reliant community based services linked back to functional government facilities.

    • I agree with the ‘effective aid’ approach thinking. This area needs more thinking and conversations within the Australian aid community but also with PNG nationals (who may have something to say on this), contributing into that conversation. I think this (‘effective aid’ before ‘more aid’) may be the best way to support PNG with the aid dollar and help it from being lured and dragged, even unwittingly, into other potentially damaging relations into the future.

      For some time now, I have been thinking and wondering whether some aid intervention should take place to trigger sustainable economic activities “at the district levels” as targeted projects.

      I am thinking of a program which I may call “DEES”–district economic endowments survey. Why DEES? Because at the moment, most districts do not have economic development plans based around sustainable economic projects/programs (they only base them around DSIP!). For most, this would be agriculture based programs, but, exactly what/which agriculture program? For which particular mass market? This, I think, is what DEES may help uncover.

      DEES would be a rapid survey that would identify the actual economic endowments of a district and link the development of those endowments to mass markets (actually, only one or two major economic market-linked projects per district based upon their identified endowment/s). The survey would identity the best markets available, nationally & internationally, and the supply chains for them.
      As it is now, people in the districts of PNG try to get into anything they can try, hoping to generate income for families. Many trials and efforts go to waste as the market is not there to demand their agriculture produce. This is what the DEES would help to alleviate: a mass market would be found for them, including the supply chain and a dedicated management team put in place as part of the DEES Project to provide technical support such as advice on supply chain matters, price, basic business skills, quality, extension services, new international market entry regulatory/compliance issues, etc.

      Thus, DEES is one area I would recommend the Australian Government and DFAT and the Australian Aid Community to consider carefully. In my view, it has the potential of triggering real, sustainable market and demand-driven economic impetus at the district levels where majority of PNG people live. Once we do that, we are on our way to ‘economic security for PNG families’ especially the majority in the rural areas. Once PNG families find economic security, I feel that, they may be more able to speak up against and oppose leaders’ corruption, oppose government plans to bring in questionable developers & their questionable mega projects and so on. Families’ economic security will give independence to individual families. They (or we) do not need to await handouts from leaders who in turn will control our political behaviour (current general situation in PNG).

      In short, the PNG leaders are capitalizing on the “economic vulnerabilities” of the PNG families. And some external entities already know this and are jumping in via their collaborators within PNG. Thus, in my view, one of the best possible aid investment is through “economic empowerment and economic security for the majority of PNG families.” I believe DEES, when compared against other aid investment vehicles, provides one of the best roadmaps going forward.

  • In my opinion there is no need to match useless infrastructure projects of the sort pushed under China’s programmes. I do agree with Minister Conroy that effective aid is what is needed, particularly in the areas of community economic empowerment (especially women), primary health care and education service delivery. These are the items communities across PNG are crying out for. Designing models of assistance that give communities greater agency over the outcomes they desire is the way forward. I believe both Ms Wong and Mr Conroy are well aware of this and commited to allocating some resources towards these objectives.

  • Excellent analysis, Terence. Agree that the challenge highlighted by this statement: “The more Australian aid is focused on countering China and shoring up allegiances with political elites in Pacific countries, the less likely it is to actually help people in need” would also significantly undermine aid effectiveness in the region.

  • Thanks for this blog Terrence. Agree that a comprehensive review of aid, very much in the spirit of the 1984 Jackson and the 1997 Simon reviews, is well overdue.

  • An excellent piece of analysis. Additional funding can potentially be put to good use; however, government needs strategy and organisational capacity to effectively use this additional funding.

    Terrance, I would be interested in hearing more about your views on any required structural changes.


    • Thank you Scott,

      That’s a very good question. The most clean and tidy solution, it seems to me, would be to recreate a semi-autonomous aid program. However, I am not working in the trenches, and my academic perspective might well lead me to under-appreciate the difficulties doing this.

      In terms of function, all that is required is a structure that allows people to build a real career within DFAT focusing on aid, and also which allows aid workers a proper place at the decision-making table at posts. My guess is that there are a wide range of solutions which would more or less afford this. I presume the best way to choose which of these should be enacted would be a very careful independent review.

      Thanks again


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