Summary

This document outlines the Government's response to the Independent Review of Aid Effectiveness and sets out the Government's overall aid strategy through to 2016-17.

Description

This is the Australian Government's response to the Independent Review of Aid Effectiveness.

The full response is available here for download in PDF and Word, or read the response's executive summary below.

• An Effective Aid Program for Australia: Making a real difference–Delivering real results [PDF 1.8mb]
• An Effective Aid Program for Australia: Making a real difference–Delivering real results [Word 2.7mb]

Executive summary

Successive Australian Governments have recognised the Australian aid program as an integral part of Australia's international effort. There is bipartisan commitment to the Millennium Development Goals (MDGs), and to scaling up our aid effort so that it reaches 0.5 per cent of Gross National Income (GNI). The Government has committed to reach this target by 2016–17.

As economic and fiscal conditions permit, Australia has an aspirational goal of raising aid to 0.7 per cent of GNI. This is a long-standing policy adopted by Australian governments since 1970.

We are also committed to the most effective aid program possible–to get the best value for money and to make a real difference in reducing poverty on the ground. We are using taxpayer dollars for our aid program, so we have a responsibility to Australian taxpayers to make sure that programs they fund are effective.

That's why in late 2010, the Government commissioned the first independent review of the aid program in 15 years–a review specifically designed to assess the effectiveness of our current program and recommend where we could make it even better for the future.

The Independent Review found that Australia has a good aid program and is an effective performer by global donor standards. It made 39 recommendations to further improve the program. The Independent Review identified ways to make Australia's aid program more transparent, more accountable, more focused on results and on real, measurable value for money.

The Independent Review analysed the overall purpose of Australia's aid program and made recommendations on the appropriate geographic and sectoral focus of Australian aid, and the importance of effective partnerships in delivering Australian aid on the ground. The Independent Review also identified ways to give Australia's aid program greater, longer-term strategic direction, including through reformed planning and budget measures.

The Government welcomes the Independent Review's outcomes and agrees (or agrees in principle) with 38 of the 39 recommendations. (The Government notes one further recommendation, on the name of the Ministerial portfolio covering the aid program, and will respond to this later.) Based on the Independent Review's findings, this statement outlines a new framework for Australia's aid program centred on delivering real results for poor people by maximising aid effectiveness.

We want a program of which all Australians can be proud–a program where young Australians will want to volunteer, where we will hold our heads up high because of the difference we are making to others in the world.

The purpose of the aid program

The fundamental purpose of Australian aid is to help people overcome poverty. This also serves Australia's national interests by promoting stability and prosperity both in our region and beyond. We focus our effort in areas where Australia can make a difference and where our resources can most effectively and efficiently be deployed.

Making Australian aid more effective

Enhanced effectiveness will be the cornerstone of Australia's aid program. Consistent with the Independent Review's recommendations we will:

• drive value for money in our aid program, building on the commitment to reduce the number of technical advisers by 25 per cent over the next two years, and reduce any unreasonable remuneration levels of remaining advisers to maximise the return on our aid dollars
• develop a rolling four-year whole-of-aid budget strategy, covering for the first time, the aid efforts of all relevant Australian Government agencies under one coherent plan that outlines the results we aim to achieve
• analyse annually our progress against the results outlined in the four-year budget strategy to make clear what is working and what is not
• abolish any programs that are not delivering on their objectives or undertake immediate changes to make sure they are
• by the end of 2011, issue a Transparency Charter to provide more accessible information on what we fund and the results we achieve
• further strengthen our existing robust fraud and risk management systems and capabilities
• involve more Australians in the aid program including by increasing volunteer numbers and improving links with Australian business.

What Australian aid will focus on

Consistent with the MDGs, what we do will be guided by five core strategic goals, reinforced by 10 individual development objectives. The goals are:

• saving lives
• promoting opportunities for all
• sustainable economic development
• effective governance, and
• humanitarian and disaster response.

Consistent with the strategic goals, the Australian aid program will also focus on 10 individual development objectives. These are:

• improving public health by increasing access to safe water and sanitation
• saving the lives of poor women and children through greater access to quality maternal and child health services (for example, skilled birth attendants and midwives) and supporting large scale disease prevention, vaccination and treatment
• enabling more children, particularly girls, to attend school for a longer and better education so they have the skills to build their own futures and, in time, escape poverty
• empowering women to participate in the economy, leadership and education because of the critical untapped role of women in supporting development
• enhancing the lives of people with disabilities
• improving food security by investing in agricultural productivity, infrastructure, social protection and the opening of markets
• improving incomes, employment and enterprise opportunities for poor people in both rural and urban areas, including the development of sustainable mining industries to boost overall economic development
• reducing the negative impacts of climate change and other environmental factors on poor people
• improving governance in developing countries to deliver services, improve security, and enhance justice and human rights for poor people; and to improve overall effectiveness in aid delivery in partnerships between host governments and agencies, and
• enhancing disaster preparedness and delivering faster, more effective responses to humanitarian crises, given the increased frequency and impact of natural disasters in recent decades.

Where Australia will provide aid

As recommended in the Independent Review, the Asia–Pacific region, including our nearest neighbours, Indonesia, Papua New Guinea and East Timor, will remain the primary focus of our efforts. This is where we have strong ties and experience, and where the international community expects us to play a lead role. It is also where our own economic and security interests are most closely engaged.

At the same time, we will implement the Independent Review's recommendation to increase aid to South Asia and Africa–as a growing middle power, we cannot pretend to be tackling global poverty without increasing our investment in the world's two most impoverished regions. The aid program will continue to play its part in international efforts to bring development to Afghanistan and Pakistan. We will also provide targeted support elsewhere.

Support for global programs extends the reach and impact of Australia's aid–both within our region and beyond. We will increase support for multilateral organisations such as the World Bank and the Global Alliance on Vaccines and Immunisations (GAVI), and United Nations development agencies that we assess as being efficient and effective, that are consistent with Australian priorities, and that deliver value for money. AusAID will also develop a global ratings system, as the British have done, that assesses the relative effectiveness of all multilateral agencies.

How Australia will deliver our aid

We will deliver our aid using systems, methods and partners that are effective in achieving results and efficient in delivering value for money. This will not mean a 'one size fits all' approach. It means we will tailor our delivery systems to individual country circumstances and concrete evidence of what works best on the ground to produce results.

We will also provide more assistance through the systems and processes of our partner governments where we assess these as robust. If these systems are robust, we can drive the Australian aid dollar further by actively reinforcing partner government priorities.

We will also make greater use of multilateral partners, civil society, and Australian non-government organisations to deliver our assistance, particularly in regions where they have a greater capacity to deliver results for poor people than we do.

Whatever form of aid delivery we use, within every country we work, the Government will also, in the future, insist on visible branding of Australian aid–or co-branding if we partner with others. It is important that the world recognises that Australian aid is Australian aid. This has not been done effectively in the past.

The Government's effort to drive aid effectiveness represents a significant reform. It will require far-reaching changes to the aid program. And it will take persistence and enduring effort. But it is an essential task to get the most out of our aid program, and to ensure it maintains the support of the Australian community.