McCully to blame for NZ Aid underspend says academic

Transcript

New Zealand's Foreign Minister Murray McCully is being blamed for what experts say is the second consecutive year that New Zealand has underspent its aid budget.

The New Zealand Aid Development Dialogue reports a surprising 12 percent increase in this year's aid budget is the result of underspending in the 2014 and 2015 budgets.

A research fellow at the Australian National University, Terence Wood, says having unspent money brought forward is a positive but still raises questions about the efficiency and effectiveness of aid delivery.

Mr Wood told Koroi Hawkins underspending is a new phenomenon for New Zealand's aid programme, that has surfaced under Mr McCully's leadership.

The New Zealand government says transferring unspent aid funding between yearly budget's is all part of the flexibility allowed by the country's three year aid budget allocation.

TERENCE WOOD: On paper it is a substantial increase from about 589 million to 659 million. However from my preliminary analysis it seems like the increase is really an increase on paper alone and what the increase actually involves is transferring money to the current financial year that was underspent in the previous two financial years budgets.

KOROI HAWKINS: That is quite a significant underspend in terms of it being over two seperate budgets isn't it?

TW: Yes it is startling I mean so in 2014/15 the agency underspent the budgeted allocation and in 2015/16 there was an underspend of over 10 million almost 15m dollars. And so the questions needs to be asked as to why the aid program is struggling to spend the money that is allocated to it in each financial year.

KH: They have got this new sort of a heading for transformative development or changes a heading that is sort of if you look at the expenditure of the budget sort of sits outside of the bilateral aid do you think that has anything to do with it, approving projects before putting funding into the actual countries?

TW: More than anything structural I think the real issue is the minister. The aid program didn't have these sorts of problems prior to 2008 when Murray McCully became the minister in charge of it. And he certainly has a reputation for being a very capricious minister also someone who  meddles with the aid program's work and often refuses to sign off on things until the last moment and so I think despite the best efforts of the aid program working under this sort of ministerial control I think is probably the main cause and the main reason why they are struggling to spend as per budgeted allocations.

KH: And is their evidence for that is there something that you are quoting from in terms of that reputation?

TW: If you read in the newspaper articles, there was one in the New Zealand Herald several years ago that describes the minister and the way that he interacts with his civil servants. I think his attitude towards civil servants and aid bureaucrats is well known and the nature of the way that he interacts with government departments is also well known. There are examples such as the Munda runway in Solomon Islands which the Solomon Islands government had been touting as a project to aid donors and which no aid donors would touch. And it only became something that the New Zealand aid programme started funding because of a personal decision from the minister it wasn't a good aid project. It is something that the aid program is struggling to see to fruition and that is all because the minister in this instance intervened over the advice that he was getting.

KH: Wrapping it all up what are some take away facts here from the situation that it finds itself in?

TW: It is good that the aid budget isn't being reduced and it is good that it is projected to be slowly but surely increasing over the next few years. So on a quantity side things are okay. In terms of the aid quality though the fact that the aid program is struggling to spend its budget on a year on year basis is indicative of something not working there. And as I have said to you I think that something is the minister and the way he is running the aid programme.