Flat White

Deft diplomacy beats foreign aid

8 June 2018

3:51 PM

8 June 2018

3:51 PM

Two recent incidents have called into question the role of Australia’s foreign aid program. Indonesia raised eyebrows last week, after spending over $430 million AUD on attack helicopters in the same year they accepted over $316 million in foreign aid from Australia. That same week, we also heard of Foreign Minister Julie Bishop’s notice to the Palestinian Authority, seeking clarification that taxpayers’ money sent to that government is not being used to fund periodic ‘martyrdom payments’ of $4,600 to the families of terrorists. Aid sent to the Palestinian territories currently accounts for over $48 million of our foreign aid budget.

Although developing nations like Indonesia no doubt have the same right to strong defence as we do, the attack helicopter purchases at a time when Indonesia is embroiled in no major regional conflicts make it clear that the country does not want for resources. The developments also raise questions about whether substantial handouts to our neighbours footed by Australian families struggling under one of the developed world’s most substantial tax burdens are the most cost-effective or desirable way to foster regional development and mutually beneficial ties.

Whether Indonesia has its priorities wrong by spending so much on its defence while parts of the nation remain underdeveloped is debatable. By contrast, it is certainly clearer that Australia’s government needs to reconsider its priorities to ensure fairness and relief for taxpaying workers and businesses while implementing a foreign policy that places the national interest first.

Rather than providing generous handouts, effective diplomacy with Indonesia might consist of needs-based foreign aid spending coupled with increasing bilateral investments and partnerships as well as assistance provided through the Australian Defence Force for major disaster relief when necessary.

That threats to withdraw or cut foreign aid in the wake of the executions of Australian ‘Bali Nine’ convicts Myuran Sukumaran and Andrew Chan failed to provoke any remorse or criminal justice reforms from the Indonesian government, show that our northern neighbour hardly depends on the funds we provide and is not moved by our generosity.


If we can be frank and direct about our concerns about China’s overreach into our political system and its attempt to expand power in the South China Sea and Pacific, with Julie Bishop going as far as to openly say that Beijing is not “fit for regional leadership”, there is no reason why we should take a continued soft-touch approach to Indonesia the next time they take a decision which stands against our values and interests.

Strengthening ties with Indonesia and other regional partners in the Asia-Pacific region should be fostered in a proven and effective manner cogent of taxpayer-funded expenses. If foreign aid is more than an altruistic gesture and is intended to genuinely benefit Australians through improved economic and diplomatic relations with other countries, then taxpayers deserve to see a return on their investment.

If Switzerland can maintain mutually beneficial diplomatic relations and uphold its values while retaining its famous reputation for neutrality, there is no reason why we cannot.

As for aid to the Palestinian Authority, an organisation governed by recognised international terrorist organisation Hamas, there is no reason why aid should not be cut completely instead of continuing to send funds while seeking periodic clarification that they are not going directly towards terrorists’ families. Liberal Democrats Senator David Leyonhjelm recently noted that several NGOs conduct important work in the region, assisting Australian objectives by fostering local development and aiding relief work for refugees in Lebanon and other neighbouring nations.

Redirecting aid to these organisations allows us to assist civilians and promote beneficial outcomes in the region without retroactively managing concerns about where the PA spends our money. Recipient NGOs should be rigorously vetted in light of DFAT’s 2016 suspension of funds to World Vision programs in Palestine after allegations from Israel that the charity’s Gaza office was funnelling the money to Hamas.

We could also take the approach of the United States which passed a law last year to stop aid to the Palestinian Authority until ‘martyrdom payments’ are ceased completely. The Taylor Force Act exempts funding for water and childhood vaccination programs. This would be a far preferable alternative to our current state of affairs while delivering greater transparency and accountability for taxpayers.

Satyajeet Marar is the Director of Policy and David Yao is a Research Associate with the Australian Taxpayers’ Alliance.

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