Key tests for development in the 2024 Federal Budget

The Government’s previous budget and International Development Policy recognise that heightened conflict, instability and climate change are enormous global pressures. The global humanitarian system is already unable to meet global needs. It will come under extra strain as demands on it mount and Russia’s war on Ukraine and Israel’s offensive in Gaza grind on.

Australia is not helping as much as it used to. Over the last 30 years, Australia provided an average of 2.3% of total DAC ODA, now it accounts for 1.5%. Some have asked if Australia is free-riding. In this budget, we’ll be looking to see if the Government gives a clear answer to that question, beyond the new humanitarian strategy due to launch this year.

Step by step, Australia is doing more as an infrastructure finance and project partner. This comes despite some scepticism both from within the region (see the Lab’s Pulse Check x Southeast Asia findings) and from Australian analysts and commentators about whether this is an area of comparative advantage. On financing, the 2023 Development Finance Review took a sensible stance although new initiatives proliferate, most recently with the Prime Minister's ASEAN-Australian summit announcement of a Southeast Asia Investment Financing Facility.

Having now ventured down this track, it is time to ensure these activities meet the development tests the government has set itself around effectiveness, transparency and accountability. In particular, Government will need to demonstrate its credentials on gender equality, social inclusion and sustainability principles, as well as delivering strong development outcomes.  

We’ll be looking for signs that Government is ready to ask itself if existing institutional arrangements for financing development infrastructure - which rely heavily on the private sector and non-development institutions - are sufficient. Failing that, budget measures to improve the policy coherence of infrastructure design, financing, governance and delivery would be a welcome step forward.

Justified effort has been put into improving DFAT’s country and regional planning processes and building a performance system that is practical, proportionate and credible. As initiatives like the transparency portal come online, there will be more to watch. But for this budget, we don’t expect an additional boost to the Government’s existing four-year $37m allocation to DFAT for dedicated development capability. That said, we always hope to see further work done to build a responsive, effective, evidence-based system of development decision-making. We may need to peer beyond the budget pages for that.