MEDIA RELEASE

Released By:
Downer

I am pleased to announce that Australia will provide an estimated $2.491 billion in Official Development Assistance (ODA) in 2005-06,
an increase of $358 million over the 2004-05 Budget figure ($2.133
billion). This represents a real increase of 5.8 per cent over
the

2004-05 expected outcome of $2.253 billion, or an 11.7 per cent
increase budget-to-budget. It is the fifth successive budget where the
Government has delivered real growth in ODA. Australia's ODA/GNI
ratio is estimated at 0.28 per cent for 2005-06, placing Australia
above the 2004 donor average of 0.25 per cent.

Australia's aid programme plays a central role in an integrated,
whole-of-government approach to developing sustainable and long-term solutions
to the challenges facing our region. The aid programme is responding to
the challenges posed by fragile states, and is helping our neighbours realise
the benefits of good governance and economic growth and cope with humanitarian
crises.

Australia's commitment extends beyond next financial year. From
2005 through to 2009, the Government will provide an additional
$2.054 billion in ODA on top of Australia's existing aid
programme. This includes multi-year commitments to the
Australia-Indonesia Partnership for Reconstruction and Development (AIPRD), to
the Regional Assistance Mission to Solomon Islands (RAMSI), additional
assistance for reconstruction in Iraq, and debt relief for the most heavily
indebted poor countries. These increases represent real and sustained
commitments to our development partners.

Budget Highlights

Australia will further strengthen its partnership with Indonesia, to help
the country rebuild following the Indian Ocean disaster and meet longer-term
development challenges. The new $1 billion AIPRD will support priority
reconstruction efforts, through $500 million in grant funding and
$500 million in highly concessional loans. The AIPRD will be
complemented by expanding ongoing programmes to Indonesia, which will continue
to strengthen economic and financial management, support governance, promote
stability and security, and improve the quality and accessibility of government
service delivery. This will increase Australia's total assistance to
Indonesia to an estimated $302 million in 2005-06.

We will continue to promote stability and growth in Papua New Guinea and the
Pacific. Total ODA to PNG will increase to $492 million. A new
medium-term aid strategy with PNG will be finalised. Through the
five-year, $1.1 billion Enhanced Cooperation Programme (ECP), and a new
Sub-National Initiative, Australia will deepen its commitment to helping PNG
consolidate the rule of law, enhance public sector management and deliver basic
services. A major new programme to help PNG fight the spread of HIV/AIDS
will commence.

ODA to the Pacific will increase to $463 million in 2005-06. In
Solomon Islands, a new four-year, $841 million commitment to RAMSI will
support the impressive gains made in restoring law and order and stability, and
assist with the transition from stabilisation to building national
capacity. Total funding for Solomon Islands in 2005-06 will increase to
$247 million. Aid flows will also be increased to other Pacific
countries, including Vanuatu (to $34 million) and Fiji (to $31
million).

Across the Pacific there will be an increased emphasis on regional
approaches and regional cooperation to promote economic growth. Australia
will work with the Pacific Islands Forum to develop a 'Pacific Plan',
which will provide a framework for the effective sharing of resources. Through
a new, $11 million Fragile States Initiative, the aid programme will work
closely with the World Bank and bring together development, security, economic
and political perspectives on fragile states from across government. This
will boost Australia's capacity to engage with fragile states, and enhance
Australia's lead role internationally on approaches to fragile
states.

Assistance to East Asia, excluding Indonesia, will increase to
$344 million in

2005-06. The priority will be to enhance regional capacity in economic
integration, and address transboundary threats like HIV/AIDS, illegal drugs and
Avian Influenza. Funding for regional programmes will increase to $40
million. This will include a new $5 million, three-year regional
communicable diseases initiative to help build capacity to combat diseases
including Avian Influenza, and a $2 million, three-year anti-drug initiative in
Cambodia, Laos, Thailand and Burma. The Government will double its
existing $15 million counter-terrorism assistance to the Philippines and
Indonesia over the next five years. Assistance to Vietnam will increase
to $77 million as Australia continues to support its international economic
integration. Australia will also maintain existing levels of funding to
East Timor.

Australia is playing a leading role in fighting the spread of HIV/AIDS in
the Asia-Pacific. In 2004, I launched the Government's $600 million
international HIV/AIDS strategy. In support of the strategy, funding for
HIV/AIDS activities is estimated at $70 million in 2005-06. This includes
$20 million for the Global Fund to Fight AIDS, Tuberculosis and Malaria, as
part of a $50 million, three-year commitment to the Fund, and a new $5 million
HIV/AIDS partnership initiative which will strengthen the capacity of regional
HIV/AIDS organisations through partnerships with Australian
organisations. Australia's Special Representative on HIV/AIDS will
continue to promote strong coordinated action on HIV/AIDS in the Asia-Pacific
region.

Targeted assistance will continue in Africa and the Middle East. Aid
to Africa will increase to $77 million, including the ongoing response to the
crisis in Sudan. In Iraq, the Government will commit an additional
$45 million over two years to help build stability and democracy and
support Iraq's transition to an open, market-based economy. In the
Palestinian Territories, Australia will work with multilateral agencies to
support the peace process and will continue humanitarian work in partnership
with UN agencies and NGOs.

Australia will continue its efforts to help the world's poorest
countries, and those recovering from conflict and disaster, to alleviate their
debt burdens. We will contribute an additional $34.8 million over three
years to the World Bank's Heavily Indebted Poor Countries (HIPC)
Initiative. Australia is also joining with other Paris Club countries to
place a twelve-month moratorium on debt repayments from Indonesia and Sri Lanka
following the Indian Ocean disaster, and forgive 80 per cent of the more than
$1 billion owed to Australia by Iraq.

The recent Indian Ocean disaster and earthquake in Indonesia have
highlighted the vulnerability of countries in our region to disasters.
Many countries also remain vulnerable to conflict and instability. In
2005-06, Australia will increase its funding for humanitarian, refugee and
emergency programmes by $24 million to $170 million. Support will be
provided for the establishment of a tsunami early warning system for the Indian
and Pacific Oceans, and the aid programme will continue to respond to crises
both within and beyond our immediate region.

Australia is keen to maximise the strategic impact of its aid programme, and
ensure it is utilised in the most effective way possible. Strategic
partnerships between key Australian Government agencies, and non government and
community organisations are being expanded. The Australian Government
will provide $24.5 million over four years for the expansion of the Australian
Youth Ambassadors for Development (AYAD) programme. This increases the
total funding for the AYAD Programme over the four years to $52.5
million.

I will table during 2005-06 a white paper outlining a medium-term, strategic
blueprint for the aid programme. Coupled with the aid programme's
existing record of achievement, and the funding increases announced in this
budget, the white paper will provide a sound platform for future aid
delivery.

Media inquiries:

Chris Kenny (Mr Downer's office) 0419 206 890

AusAID (Public Affairs) 0417 680 590