Budget 2018 – Appropriation Bills


Peter Khalil: I rise to speak on the appropriation bills of the 2018 budget. Like every other Liberal budget—we’ve heard this over the last couple of weeks—it fails the fairness test. An $80 billion dollar tax handout to big business, including $17 billion to big banks; at the same time, savage cuts to schools and hospitals, and secret deals with Pauline Hanson, who is running our economic policy, apparently. It is not only unfair; it is short-sighted.

One of the areas where the coalition demonstrate this short-sightedness is in the cuts to the development assistance part of the budget. It’s not often discussed, but they have effectively sacrificed long-term regional security for short-term political expediency. We’ve heard all the recent news about China’s interest in a potential military base in Vanuatu. I don’t know whether that’s true or not—it’s unverified. It’s just the latest in a pattern of emerging powers using aid in the Pacific to assert their geopolitical influence. Now this is being extended to potential military bases.

We know that the geostrategic outlook for Australia and our region is uncertain and unpredictable. We need to integrate better all tools of state craft—development, defence and diplomacy, the three Ds—to safeguard our future in the region. The Turnbull government, and certainly foreign minister Julie Bishop, in overseeing a dramatic decline in our development assistance budget, have turned their back on this region and diminished our standing in the world and our influence. They have left critical tools of state craft unused and sitting idle in the toolbox.

In contrast, under the previous Labor governments, Australia’s aid contributions grew at an average of seven per cent per year between 2007 and 2013. In 2012-13, under the Labor government, Australia’s foreign aid budget reached its highest level ever, just above $5 billion. Yet this coalition government have cut $11.3 billion, ripped out of Australia’s foreign aid budget over the past five years. Under this coalition government, since 2013 in cumulative terms that is a cut of just over 32.8 per cent of the aid budget since 2013-14. Under this coalition government Australia’s proportion of aid spending is now at its lowest level on record. It is 22 cents out of every hundred dollars of national income or 0.22 per cent of gross national income. It is projected to fall even further to 0.19 per cent of GNI by 2020-2121. Under this coalition government AusAID was dismantled and dispersed into DFAT, which led to the loss of experienced aid management staff. Under this coalition government, the percentage of Australia’s aid budget funnelled to managing contractors has grown to 20 per cent of all development assistance, and under this government foreign aid will be cut by a further $110 million over four years after the previous deep cuts in 2018.

It’s little wonder that the former Danish Prime Minister Helle Thorning-Schmidt said last year on this topic:

When your development budget is at an all-time low, which it is right now, it feels like Australia is not taking its place in the world… We miss Australia. Australia should be big influential, taking your space, helping with humanitarian issues and disasters.

It didn’t have to be this way. Either the coalition government fundamentally misunderstands or is wilfully blind to the fact that our aid and development assistance is critical to our national interest. If it is wilfully blind, it is blind to the fact that aid lifts millions out of poverty and works to create stability and security in our region and across the world. If they’re wilfully blind, it can only be in order to direct their narrow, myopic vision to short-term raids on the aid budget to plug the gaping holes in their policy and budgetary agenda.

It’s no excuse for Julie Bishop to argue that aid to the Indo-Pacific has been maintained in nominal terms with only a small cut in real terms, because these cuts that have been made have impacted sub-Saharan Africa, the Caribbean and Latin America. They could all, of course, have been invested into PNG and the Pacific regions if the government were so inclined to focus more on our region. In the wider Pacific, Australia is by far the largest donor of international development assistance, providing over $1 billion a year. Indeed, in the Pacific there are 10 nations whose principle relationship in the world is with Australia. Pacific funding in this budget has gone up to $1.3 billion, but around $200 million of that is for an underground communications cable. While that’s important, this spending really does hide the cuts to education and health that we’ve seen in the Pacific.

Labor is not blind to the importance of aid to our national interest, nor its interrelated importance to humanitarian objectives. In fact, we can see the possibility that they are not mutually exclusive and that both can be achieved. There has been an acknowledgement of, and I think there is, a demonstrable link between the aid program and Australia’s national interests. A report by Save the Children highlighted through statistics that inequality harms economic growth because it is a barrier to sustainable and inclusive growth and it entrenches discrimination, undermining social and political cohesion. It creates the conditions for political and social tensions, instability and conflict.

On issues around gender, Labor has consistently articulated a clear vision in relation to the importance of foreign development assistance in addressing gender equality. Throughout the developing world, women are confronted with a plethora of basic challenges that Australia ought to play a role in addressing through our provision of development assistance. This includes efforts to promote women’s human rights in accordance with the Convention for Elimination of Discrimination Against Women. For instance, Australia’s foreign aid contribution can have a meaningful impact on promoting women’s empowerment by funding educational programs and initiatives aimed at ensuring that women have fair and equal access to education, training and employment. Labor supports eliminating the cultural and economic barriers faced by children, and, in particular, girls, attending school, such as child labour, child trafficking, child marriage, safety to and from school, community attitudes and teaching practices.

With respect to climate change, our development budget is effectively silent—the government’s budget is effectively silent on this. Yet it is incumbent on all of us to play our part in addressing climate change. This is particularly so within the context of its impact on our Pacific neighbours. In the Pacific, the impact of climate change has the potential to actually reverse the reduction in poverty that has been made in the past 30 years. While a sea rise of a few centimetres would have an impact for us here in Australia, certainly, those same changes would be catastrophic and absolutely devastating, for example, to the people of Tuvalu. Indeed, according to some predictions, several island nations may cease to exist as we know them today in the span of just a few decades. And yet the recent OECD report noted that Australia spends less on development supporting climate change than many other OECD countries: 13 per cent of Australian aid in 2015, compared to 26.2 per cent average for all of the other OECD countries. Conservative estimates indicate that the impacts of climate change will result in more than 100 million additional people being pushed into poverty by 2030.

So, unless you are the coalition government, there is little doubt that climate change and climate-change-related disasters clearly pose risks to economic growth, poverty reduction, education, health and regional security in the Pacific. Addressing climate change is imperative if Australia is to mitigate the long-term cost of having to make adequate provision for the tens of thousands of refugees fleeing the impacts of that change.

Senator Wong, in the other place, our shadow foreign minister, has noted:

If our development assistance program is seeking to grow the social and human capital that lifts people out of poverty while the consequences of climate change continue to undermine that outcome, then disaster risk reduction must become a more prominent feature of our development assistance planning.

Climate change impacts every aspect of the Australian Aid Program such that we cannot be serious about tackling poverty in our region if we are not serious about tackling climate change.

And this government is not serious. In fact, they’re going backwards as far as their discussion of climate change goes.

The issue of climate change is even being factored into defence planning. The 2016 Defence white paper mentioned climate change eight times, and warned:

Climate change will be a major challenge for countries in Australia’s immediate region.

From a Defence perspective, this could exacerbate conflict and fragility issues in the Pacific Island states. To address the strategic consequences of this issue, particularly with the increasing influence of outside actors with interests that are inimical to ours, it’s important for Australia to:

… help support the development of national resilience in the region to reduce the likelihood of instability.

That assistance includes defence cooperation, aid, policing and building regional organisations. The ADF expects to be called upon more and more to provide humanitarian assistance and disaster relief. That is as a direct consequence of what we are seeing with climate change in the Pacific.

Balancing our humanitarian and our moral objectives with our more pragmatic political objectives, which are often tied to the national interest, is a difficult process, but there is a need to get that balance right. People familiar with the Venn diagram would note that there’s a crossover point. If we can get our objectives—the geopolitical, the humanitarian and the business—all aligned in that crossover point in the Venn diagram, it shows where you get peak effectiveness and efficacy of our aid program. On business, too, there are efforts to partner in developments with companies already on the ground, to leverage private capital flows, ensuring enhanced dividends on commercial enterprises and development working together.

We need to understand what our national interest is, and why it’s so. This is, of course, always open to analysis and debate. Senator Wong has articulated Labor’s position on this: the security of the nation and its people; the economic prosperity of the nation and its people; a stable, cooperative, strategic system in our region anchored in the rule of law; constructive internationalism; and, of course, our values, which she points out: compassion, equity, inclusion, and mutual respect. These need to find expression in the rule of law, in the principle of the rule of law. That is, of course, the basis of our democratic practice and, as she points out, the social contract between the government and the people.

To answer the question: why do we invest in development assistance in our budgets? It is because it is unquestionably in Australia’s interest to create a more stable and secure world by helping to reduce poverty, to improve health and education, and to fight inequality. Senator Wong also acknowledges that both developed and developing countries have something to offer each other and to learn from each other when it comes to ensuring equality and prosperity. This is the essence of social and human capital development.

A lot of studies have been done on aid and development assistance. Some of them refer to the head and the heart as the philosophies behind humanitarian assistance. The heart is the compassion, the moral underpinning of our aid programs. You could argue it’s intrinsically linked to the Australian spirit and to the boundless plains that we want to share with people—our Australian values that promote egalitarianism and fairness. The head is the logical. The evidence based benefits of an effective aid program are trade, security, stability and prosperity.

Labor has agreed to improve the Australian aid program because we understand both the head and the heart of development assistance policy. Development is a critical tool of state craft and it works with the other tools at our disposal. Diplomacy and development, if successful, can establish peace and security in our region. You then don’t need the sharp end of the spear, which is defence—the third D. The military is and always should be the last resort. But we increase the chances of having to reach into that defence tool if we don’t use the other tools at our disposal well enough. This government is not doing that. Even General Mattis, President Trump’s Secretary of Defense—who was described in a recent New York Times article as a person who was dismissed as a warmonger by the Obama presidency—someone you wouldn’t really associate with supporting aid and development assistance, said in a summary of his views on statecraft and diplomacy, in 2013:

If you don’t fund the State Department fully, then I need to buy more ammunition ultimately.

That’s very true. There’s elemental truth in this. If you don’t fund development assistance and diplomacy, by extension you will need to utilise the tools of statecraft, such as defence, and you’ll spend more on it.

At a relatively low-cost alternative to force projection, foreign aid and development can help to achieve our national interest goals in the Indo-Pacific. From the national security and defence perspective, funding programs intended to reduce poverty, improve access to education, enhance standards of living, can reduce the conditions for radicalism. In responding to potential cuts to aid, Allan Gyngell, a former head of the ONA, said:

Why is it that instruments of deterrence, the instruments of war-fighting, the instruments of national security—all of them—are considered a legitimate expenditure of taxpayers money but instruments of persuasion are not?

It’s a very good question.

As a democracy, we should seek to promote the welfare of our neighbours. We can utilise the tools, the three Ds, especially development, to avoid the unnecessary violence and civilian strife these countries may fall into. Balancing our objectives—humanitarian, moral and political—and tying them to the national interest is something that we can do with a healthy development assistance budget. I’ll say this: we can look to examples globally. You’ve got a conservative government in the UK that has successfully committed to 0.7 per cent GNI for its development spending. That government was put under enormous pressure to reduce that—some of the issues that Oxfam had. The UK government and Theresa May still stood firm and said, ‘We are not going to cut our development budget.’ They legislated for 0.7 per cent of GNI. At least that conservative government is doing the right thing and standing on principle. I think it’s an example that this government should look at and take note of. The Australian Labor Party has committed to a national platform of 0.5 per cent of GNI. I’d like it to go beyond that, but we have a very good target to aim for. We engaged with the international development sector to do that work. My colleague the member for Brand here, among many other MPs, worked with NGOs in the sector on the important policy issues we need to deal with if we are to form government. We are committed to the development assistance budget for our neighbours and for the world.