15 May 2013

Australia's Pacific aid capped but not all bad, says economist

7:28 pm on 15 May 2013

Australia's Pacific aid has been capped and its goal to increase foreign aid delayed once again, but an Australian economist says there's still good news.

Canberra has pledged an increase of half a billion US dollars on last year's federal aid package, but there is nothing extra for the Pacific, while there is an increase for East Asia, including Indonesia.

The Australian aid budget is 0.37 per cent of gross national income, well below Australia's Millennium Development Goal of 0.5 per cent, which has been delayed to the 2017/2018 fiscal year.

The Director of the Development Policy Centre at the Australian National University, Stephen Howes, says the overall foreign aid increase is good news during an economic downturn.

"In fact we think this year we might be the sixth largest aid donor in the world. So I think Australia is doing pretty well. We are certainly doing much better than we used to, internationally."

Stephen Howes says the 0.5 per cent goal in dollar terms means an increase of three to four billion dollars and is an unrealistic target.