Hands Down The Best Investment We Can Ever Make

One of the most thrilling moments I have ever witnessed occurred during the Live8 concert in 2005. A giant screen displayed footage from the 1980s famine in Ethiopia. It was distressing. Mothers with eyes evacuated of hope cradling emaciated babies; children too weak to play sitting quietly on the dusty ground surrounded by death. The camera zoomed in on one baby girl, gaunt, listless and just minutes from death. It was humanity at its most wretched and vulnerable. Sir Bob Geldoff stood on stage, pointed to the image of the little girl moments from death, and announced that the famine relief funds raised by the Live Aid concert meant that little girl had received life-saving interventions, had gone on to study agriculture, had just graduated and was at the concert. With that she walked out on stage, a vibrant, life-filled 20 year old woman, an emblem of hope and possibility. It made my spirit soar and my eyes fill with tears of joy.

The experience of that young woman has been repeated all over the developing world in the last few decades. From the wide open plains of Africa to the deltas of Bangladesh poverty is being wound back at an extraordinary pace. The number of people living on less than $1.90/day has fallen from four in every ten people on the planet in 1984 to just one in every ten in 2015. The number of children dying before their fifth birthday has plummeted from close to 19% of all live births in 1960 to less than 5% today. These are extraordinary outcomes that have come about due to the development and spread of technologies and knowledge; opportunities created for poor communities as they integrated into the global economy; and grass roots development initiatives.

Why then are we not dismayed at the state of the federal aid budget? In the space of just a few years it has been slashed. A few years back both major parties were committed to raising foreign aid to 0.5% of national income and we were on track to achieve this. Today the commitment to this target has lapsed and the aid budget has been raided in the name of budget savings. Yet there are few public investments that have better returns in terms of lives improved. Aid allows poorer countries to fast track access to education, medicine, and a range of resources they would not otherwise be able to afford. Australian aid sees children surviving and thriving, schools built and teachers trained, businesses developed, and communities strengthened. Yet our aid budget has fallen to its lowest level ever as a percentage of national income and we are lagging way below the average effort of other industrialised nations. In the chart below the red line represents Australia’s aid budget as a proportion of national income. The green line is the UK which has been increasing its aid at the same time we are decreasing.

People justify the cuts to aid on the basis that “we can’t afford it.” Really? The Credit Suisse annual Wealth report ranks Australia as the second wealthiest nation on earth in per capita terms. Yet at the same time we squeal that we cannot maintain our aid program, other nations such as the United Kingdom have increased theirs. Given our economy generates somewhere in the vicinity of $1.5 trillion a year, sparing less than 1% of that for the world’s poorest is certainly affordable. What we are really saying is, “We think other things are more important.” For example, Australians around $20 billion a year on recreation, which is five times more than we spend on foreign aid. Our government spends eight times as much on defence as it does on foreign aid.

The size of our foreign aid budget is not a question of affordability but of choices and priorities. And from a global perspective we’re looking pretty selfish. The former Prime Minister of Denmark called Australia on this when she appeared on the Q & A program last Monday. We are members of a global community, but right now, we are proving ourselves to be the spoiled brats of the global family.