Australia and aid: from superpower to superwimp
26 Oct 2015|


Part of the Canberra fun is to ponder the public mysteries.

Something big happens in full view, centre stage, with all the lights up and every key moment revealed. After the crescendo, as the scenery is struck and the caravan moves on, the head-shaking conclusion is puzzlement: What was that? Why did that happen?

Tony Abbott is a great mystery moment. A prime minister is elected with a thumping majority. The logic of Oz electoral history proclaims a government set for at least three terms. Instead of a decade, Abbott is gone in two years! What??

Last week I helped prod the cadaver of another Canberra mystery. For wonks, aidies and foreign affairs tragics this is a puzzler: How did Australia go from aiming to be a Development Aid Superpower in 2010 to become a Superwimp?

I pondered the power-to-wimp quandary first at the Australian Institute for International Affairs, discussing draft chapters for the 12th book in the AIIA series (starting at 1950) on Australia in World Affairs. One chapter in the next volume will be on the Aid puzzle.

Then, serendipitously yet separately, I sat down to talk to an intellectual explorer from the Australian National University writing a PhD on the power-to-wimp phenomenon. What follows are my thoughts on the mystery—all bystanders are blameless.

First, some credits for this frame. As Australia gushed gold into aid not so long ago, Ben Reilly conjured the image of Oz as Aid Superpower. Ben commented in 2012, the Australian voter was entitled to be confused:

‘Over the course of a decade, with almost no public debate, Australia has apparently transformed its international priorities, becoming an aid powerhouse, a foreign affairs lightweight and—if current spending levels are maintained—a military minnow.’

Mark that the most brief of sliding door moments. My formulation at the AIIA was we’d gone from superpower to wimpout. Ramesh Thakur instantly sharpened this to superwimp. Always steal from the best and make it your own!

Now let’s look at What Happened? before we get to Why?

In 2005, Australia was noodling along spending $2 billion a year on aid, most of it in the South Pacific. The Indian Ocean tsunami and the deployment to Solomon Islands had caused cash surges, but essentially aid ticked over on a slow-growth drip. That year John Howard went to the UN Summit. Channelling Millennium-ism, the Prime Minister announced aid would double to $4 billion by 2010.

When Kevin Rudd became Labor leader, he pushed harder, committing to spend 0.5% of Gross National Income on aid.

At the 2010 election, what I dubbed the ‘new golden consensus on aid’ was embraced by the Labor government and Liberal opposition. In the Press Club foreign affairs election debate, it was striking how the Millennium Development Goals were part of the opening statements of the minister, Stephen Smith, and shadow minister, Julie Bishop. Both underlined their promise to lift spending to reach 0.5% of GNI by 2015-16. Golden consensus gushed gold.

They’d broken a key political rule: commit to a figure or a date, but never both. Nominating the cash/percentage target and the deadline date created a hard-to-fudge pledge. And they’d set a goal just five years away. The aidies became a special and protected species in the Canberra jungle.

To hit the 0.5% figure, budget forward estimates redoubled aid to $8 billion by 2015-16. Assuming the golden consensus kept glowing and economic growth hummed, aid would reach towards $10 billion by 2020. Annual aid spending would be heading towards a third of what went to Defence.

It was all there in the forward estimates. I mused in 2010 about the creation of a Minister for Aid and Development, even hypothesising that this big, rich spending beast could migrate from Foreign Affairs to the Prime Minister’s Department. The superpower aid department would gravitate towards the centre of power.

Then, in a matter of mere policy moments, the wimpout. Julia Gillard started slicing at the golden consensus; Tony Abbott smashed it. True to the Abbott view that those running policies he dismantled should share the punishment, AusAID was swallowed by DFAT.

So from AusAID to WasAID.

Now the mystery question: Why?

Coming from completely different places, Howard and Rudd created the golden consensus.

In 2005, Howard was in a supremely happy place after nearly a decade in power. Australia had sailed through the Asian financial crisis and the US dotcom crash. The mining boom delivered the greatest terms of trade dividend ever. The government paid off all debt. On 21 April, 2006, the Treasurer proclaimed Australia to be Debt Free.

To rework a Dire Straits song, Australia’s leaders had money for nothing and kicks for free. Howard hit the aid accelerator then Rudd bolted on the supercharger.

The flaw in the golden consensus was that it was broad but shallow. Doubt the strength of political harmony that hasn’t been argued into existence and fought to a draw. No conflict means no true settlement. The polity hadn’t thought what an Oz aid superpower would mean and quickly decided not to spend the money to reach this unimagined place.

Labor accuses Abbott of destroying the aid consensus. Don’t believe it. The tacit consensus is to noodle along at $4 billion annually (thanks, John Howard). The new consensus resembles the previous model—in place of debate, again there’s ellipsis…

The new consensus serves political self-interest and it’s cheaper being a superwimp.

As a previous generation of Oz politicians promised to spend 0.7% of GDP on aid, so this generation will make 0.5% of GNI a long term pledge: the term will be mentioned, the pledge will be embraced, and it will be long off.