Never before has an Australian government made cuts to the international aid program like those made by the Abbott government. The argument goes that we can’t afford to borrow money in order to give it away. We first need to deal with our debt crisis, and then we can afford to give more.
A friend of mine, Gershon Nimbalker, put together the chart below. It shows the aid budgets of the world’s wealthy nations as a proportion of their national income (the red dots) and their levels of debt as a proportion of national income (the black bars).
The message is disturbing. The nations on the right-hand side of the chart have the lowest levels of public debt. Most of the nations down this end of the chart have large aid programs. Denmark, Sweden, Norway, Luxembourg all devote more than 0.8% of their national income to helping poor countries make the investments they need to lift their populations out of poverty. And then there’s Australia and New Zealand. Like Denmark, Sweden, Norway and Luxembourg we have very low levels of debt, but unlike them we have small foreign aid programs. Indeed countries such as Ireland, Belgium, France, and the UK have national debt that dwarfs ours yet they have much more substantial aid programs.
So are these nations being profligate, spending their way into ever more debt, while Australia is being prudent? No, they’re simply prioritising other areas to cut in order to bring their debt under control.
Australia does needs to deal with its long-term structural deficits. How we do so says an awful lot about us. We can ask multinational corporations to pay their fair share of tax; can get rid of tax breaks that distort our economy such as discounted capital gains and negative gearing; we can cut back on welfare to those who have no need for it. Cutting back aid to those who most need it? I’d like to say it’s unAustralian, but apparently it’s not.