2007-08 Australia's overseas aid program: Major new initiatives promote regional growth and stability

The 2007-08 Budget is a watershed for the Government's aid programme and our largest ever investment in reducing poverty in our region. Australia will provide an estimated $3.2 billion in Official Development Assistance (ODA) in 2007-08, an increase over the 2006-07 budget ($3.0 billion). This continues the Government's impressive track record of growth in ODA and maintains Australia's ODA to gross national income (GNI) at 0.30 per cent.

The commitments contained in this Budget represent the seventh consecutive increase in overseas aid and significantly boost our efforts to improve the lives, security and well being of our neighbours. It is expected that from 2008-09 to 2010-11 development assistance will amount to around $3.5 billion, $3.8 billion and $4.3 billion respectively. By building long-term foundations for better governance and improved human security in our region, the package of budget measures directly supports the achievement of our shared development goals.

The 2007-08 Budget implements the strategic objectives agreed in the Australian Government's White Paper - Australian Aid: Promoting Growth and Stability, to reduce poverty and achieve sustainable development in our region, in particular by fostering functioning and effective states, accelerating economic growth, investing in better education and health, and improving aid effectiveness.

Budget Highlights

In the 2007-08 Budget, the Government has committed an additional $2.5 billion over four years (with $510.7 million in 2007-08) to complement existing bilateral and regional programmes.

Programmes delivered by AusAID will increase by a projected 21.7 per cent in real terms (Budget to Budget) ($476.0 million in 2007-08). In implementing these programmes, AusAID will work closely with other Australian Government agencies and within developing country systems to promote growth and stability in the Asia-Pacific region.

Accelerating Economic Growth

Helping to generate broadly based and sustainable regional economic growth is the single most important challenge for our aid programme over the next ten years. In 2007-08, a range of new initiatives will support accelerated economic growth in the Asia-Pacific region, including through investments in infrastructure and the environment.

The Government will provide an additional $505.8 million over four years to improve infrastructure and remove constraints to growth. Measures will fill critical gaps in infrastructure development and maintenance, and address constraints to investment. This will spur economic growth by improving access to markets, promoting regional trade and integration, and encouraging private sector growth and increasing productivity. Other assistance will target energy efficiency and water resource management.

The Government will provide an additional $164.4 million over five years through AusAID, in close consultation with the Department of Environment and Water Resources, as part of the Global Initiative on Forests and Climate recently announced by the Prime Minister.

Fostering Functioning and Effective States

New measures will boost efforts to foster functioning and effective states in the region, improve governance and leadership and provide incentives for improved performance. Real progress in essential economic and governance reforms will be recognised through performance incentives. Following succesful trials in Papua New Guinea and Vietnam, the Government will provide an additional $115.6 million over two years to selected developing countries in the Asia-Pacific region that are advancing their reform agenda.

The Government will also provide an additional $41.0 million over two years to improve governance and leadership in the Asia-Pacific region. A Pacific Leadership Programme will encourage and develop future leaders in the region, and a Civic Education Programme and a Government Accountability Programme will help build demand for better governance and leadership.

Recent events in Solomon Islands are a timely reminder of the susceptibility of our region to environmental disasters. The Government remains strongly committed to helping our neighbours in times of crisis and will provide an additional $93.2 million over four years to increase Australia's response capacity to humanitarian and emergency crises in the Asia-Pacific region.

Investing in People

Australia will invest an additional $1.125 billion (over four years) in health and education on top of existing programmes, targeting child and maternal health, HIV/AIDS, malaria and education quality and access.

Education has a central role in reducing poverty and providing the foundation for economic growth and self-reliance. To this end the Government will provide an additional $540.3 million over four years to improve education outcomes for young people across our region and equip them with the skills necessary to lead productive lives and participate fully in economic activity. This investment will contribute to increasing by 10 million the number of children attending school and improving the quality of education for an additional 50 million children.

Alarmingly, nearly 11 million children die globally every year, mostly from preventable diseases. The Government will invest an additional $585.2 million over four years to improve health in our region, focusing on reducing child and maternal mortality, supporting HIV/AIDS treatment and prevention, curbing the spread of malaria and reducing the economic and social burden of non-communicable diseases. Funding will also be provided to strengthen partner government health systems and better respond to emerging disease threats.

Improving Aid Effectiveness

The Government is committed to enhancing the effectiveness of the aid programme by improving its performance orientation, strengthening engagement with the Asia-Pacific region, and working in partnership with developing countries and other donors.

Reducing corruption in partner countries is vital to improving the effectivess of Australian aid and other resources, domestic and international, allocated to development goals. The Government will provide an additional $16.7 million in 2007-08 to support high priority work to tackle corruption in the Asia-Pacific region.

Media contacts:

AusAID (Public Affairs) 0417 680 590
Minister's Office 02 6277 7500