Aid to Indonesia slashed by 40 per cent

Tuesday’s federal budget confirmed a mid-year review decision to reduce the overall aid program by an unprecedented $1 billion to $4 billion in 2015-16.


Aid to Indonesia – the biggest beneficiary of Australia’s largesse – will be cut from $605.3 million to $366.4 million.

But Treasurer Joe Hockey insists Indonesia has not been singled out for special attention in the wake of Jakarta’s decision to execute Bali Nine drug smugglers Andrew Chan and Myuran Sukumaran in April.

“Not at all,” he told reporters ahead of his speech to parliament on Tuesday.

Foreign Minister Julie Bishop had gone through a proper process in deciding which nations would be supported, taking into account their economic growth, the needs of the region and whether countries were aid donors themselves.

The executions fuelled speculation that aid to Indonesia could be targeted as a possible retaliatory measure.

However, most experts were predicting Indonesia would get less assistance anyway, even before the Australian pair faced the firing squad.

Ms Bishop has always insisted the Asia-Pacific region should be Australia’s aid priority.

While aid to Pacific islands faced only tiny tweaks in the budget, east Asian countries fared badly with Vietnam, Burma, Laos and the Philippines facing 40 per cent cuts.

But Cambodia, which is about to resettle refugees on behalf of Australia, and East Timor’s aid budget were left largely unscathed.

Overall aid to earthquake-ravaged Nepal will be cut from $33.9 million to $26.8 million.

But Vanuatu, hit by a cyclone earlier in 2015, gains an extra $500,000 this financial year with $60.9 million in overall aid.

Papua New Guinea, which hosts the Manus Island immigration detention centre, will receive five per cent less in aid but now becomes Australia’s top aid recipient pocketing $553.6 million next financial year.

Aid to Sri Lanka, Afghanistan, Pakistan and Bangladesh and Sub-Sahara Africa will be cut by 40 per cent.

Funding to non-government organisations will be slashed from $203.9 million to $176 million slightly less than the 20 per cent cut many were anticipating.

Australia’s aid budget is set to plummet to 0.22 per cent of national income by 2016-17 well below the United Nation’s push for countries to donate 0.7 per cent.