Australian aid on hold in budget


Australia will delay its foreign aid spending targets and close its embassy in Budapest as the government scrambles to rein in costs to meet revenue shortfalls, Foreign Minister Bob Carr said Monday.

The ruling Labor government is preparing to hand down its final budget Tuesday before it goes to the polls on Sept. 14, admitting a slump in tax revenue means a promised surplus will not be achieved.

Part of the cutbacks will hit foreign aid, particularly a commitment to meet the so-called millennium goal of having the aid budget equal 0.5 percent of gross national income.

Canberra originally pledged to meet this goal by 2014-15, but Carr said this will now be pushed back to the 2017-18 financial year, having already been delayed last year.

“While that’s disappointing, it simply reflects the reality that you can’t borrow money to spend on aid,” he told ABC radio. “And what you spend on aid has got to be sustainable and the fact is these are the most significant write-downs in revenue we could possibly have imagined. And in that context there’s a one-year delay in reaching that goal.”

Despite this, Carr said aid spending will still be increased by around 500 million Australian dollars ($500 million) in 2013-14. About 70 percent of Australia’s foreign aid is spent in the Asia-Pacific region.

World Vision Australia chief Tim Costello said the delayed spending targets were “deeply disappointing.”

“The World Bank estimates the costs are holistically $2,000 to save a life,” he told ABC. “Australian aid has saved 200,000 lives in the last year. If we had kept our promise, not pushed it out by another year, that’s another million lives over the next four years we would save.”

The broadcaster reported that another casualty of the budget cuts would be the Australian Embassy in Budapest, which will shut, while plans to open a diplomatic post in Dakar, Senegal, have reportedly been shelved.

Australia first announced a U-turn on its budget surplus pledge in December, and Treasurer Wayne Swan has since confirmed revenue writedowns of at least AU$17 billion for the 2012-13 financial year.