Discussion paper

Who receives Australian aid, and why?

30 Jun 2011

Interest in answers to questions on who receives Australian aid and why are timely given the announcement by the government of its intentions to double the total Official Development Assistance (ODA) budget by 2015‐16. The Australian government has announced its intention to allocate 0.5 percent of gross national income (GNI) by 2015‐16 to ODA (AusAID, 2011a). This is a sharp turnaround given that the ODA budget fell from a high of 0.5 percent of GNI in 1974‐5 to 0.25 percent by 2000‐01. It has since regained some of the lost ground, having reached 0.32 percent in the 2008‐09 Budget. In dollar terms, Australia budgeted AU$4.3 billion to ODA in 2010‐11 (the current financial year), and this figure is projected to double by 2015‐16. In per capita terms, the above translates to approximately $200 per person being allocated to ODA. The announced increase in ODA is raising concerns on how this will impact on the effectiveness of Australian aid, and particularly amongst the Pacific Island nations who are perceived as being ‘over‐aided’. This paper throws light on these issues.

The bulk of official development assistance (ODA) from Australia is provided to Asia and Oceania. Indonesia and Papua New Guinea together account for nearly a quarter of the total. Physical proximity to Canberra and large receipts of bilateral aid from the United States is a significant determinant of who receives this aid. The level of poverty is (statistically) a significant determinant of aid allocated by Canberra only after recipients have been chosen.

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