Sunday, February 04, 2007

'Creative' figures skew aid picture

from The Age

Brendan Nicholson

The Government claims to have increased its foreign aid in the past financial year, but figures released by its own aid distribution agency, AusAID, suggest that much of the increase is due to creative accounting.

Australia's overall aid last financial year was $2.491 billion, according to figures released by Foreign Minister Alexander Downer.

That constituted an increase of $358 million, or 5.8 per cent, on the previous year.

But a breakdown shows that the figure included $160 million for "migration management" — in other words, detaining some asylum seekers on Nauru and sending others home to Afghanistan.

The aid budget also covered $235.7 million spent on peacekeeping in the Solomons.

The breakdown of aid spending, which was provided by AusAID in written response to ALP questions in the Senate Estimates Committee hearings, also reveal that $668 million, or about 85 per cent of "new" aid, consisted of Iraqi debt to Australia that was written off.

And 57 per cent of that debt was interest.

Kate Wheen, a co-director of AID/WATCH, a non-profit group that monitors aid and trade matters in the Asia-Pacific region, said Australians were being deceived into thinking their aid was increasing when it was boosted by numbers such as the cancelled Iraqi debt.

"Debt cancellation is effectively creative accounting, the Government paying itself back," she said.

The Australian people are being led to believe our aid is increasing, when in fact it is being artificially inflated by $800 million over three years.

"If the public perception is that aid should alleviate poverty, then this is a massive deception about how our aid is being used," Ms Wheen said.

The Government insists that the figures are compiled in accordance with international guidelines.

But the Opposition's spokesman on international development assistance, Bob McMullan, last night criticised the shift in Australian foreign aid spending, which had moved from programs to reduce poverty, hunger, illiteracy and ill-heath and towards counter-terrorism and security co-operation, deflecting asylum seekers and fighting wars.

The inclusion of security and immigration control matters in overseas aid numbers might fit international definitions of what constituted aid, he said, but: "As an indication of Australia's generosity as a country it's a farce."

He said an egregious example was the inclusion of Australia's funding of its immigration detention centre on Nauru as overseas aid.

Mr McMullan said no one in their right mind would think that Australia was funding the facility on Nauru to help either refugees or the people of Nauru.

In September 2005 Prime Minister John Howard announced that overseas aid would double to $4 billion by 2010. Since then the formal "aid" budget has climbed to $2.9 billion.

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