The claim
The signing of a security pact between Solomon Islands and China has added fuel to the fire in an election where national security already loomed large.
During an interview with ABC Radio on April 21, 2022, Shadow Minister for Foreign Affairs Penny Wong said the government had damaged Australia's relationship with Solomon Islands and undermined regional security through numerous missteps, among them making cuts to foreign aid.
"The government should not have dropped the annual bilateral development assistance to the Solomons, which is 28 per cent on average per year lower under them than under us," Senator Wong said.
So, has Australia's annual aid to Solomon Islands been, on average, 28 per cent lower under the Coalition than under Labor?
RMIT ABC Fact Check investigates.
The verdict
Senator Wong's claim is not the full story.
Australian foreign aid to Solomon Islands was on average almost 35 per cent lower per year under the Coalition compared with the previous Labor government, in inflation-adjusted terms.
However, a major cause of that has been the end of Australia's role in a 14-year mission to Solomon Islands, which began in 2003 with the aim of restoring law and order after the country began sliding into civil unrest.
This led to a surge in funding that experts told Fact Check was similar to assistance offered following a natural disaster, and which they said rendered the comparison largely meaningless.
Funding for the regional assistance mission decreased under both Labor and Coalition governments before ending entirely in mid-2017.
One expert noted that despite the mission ending, none of the substantial development programs operating alongside it had been cut.
What counts as foreign aid?
Part of a nation's "soft power" toolkit, foreign aid comes in various forms and can serve various purposes, such as the enhancement of national security or the achievement of humanitarian or diplomatic goals.
In Australia's case, the government defines aid as spending that meets the definition of "official development assistance" (ODA), set by the Organisation for Economic Cooperation and Development.
The OECD defines this as "government aid that promotes and specifically targets the economic development and welfare of developing countries".
Starting the clock
Fact Check has used 2007-08 as Labor's first financial year in office, on the basis that it was in power for more than half of that year.
Similarly, Fact Check has attributed the 2013-14 year to the Coalition, which was elected in September 2013.
The incoming government soon delivered on its promise to review the existing aid budget, announcing in January 2014 that total aid expenditure would be $107 million less than in 2012-13.
The new annual aid figure for 2013-14 of $5.042 billion was also $624 million lower than Labor had allocated in its final budget.
So, where are the numbers?
Country-level data on Australia's foreign aid is collated by the Department of Foreign Affairs, which publishes a standard time series from 1974-75.
These nominal figures reflect "current prices", meaning they do not take inflation into account.
Consistent with previous analysis, Fact Check has relied on the Australian Bureau of Statistics' Consumer Price Index (CPI) to calculate inflation-adjusted figures.
This methodology mirrors that used by Australian National University's Development Policy Centre to produce its Australian Aid Tracker data.
Averages for each government have been calculated using actual expenditure figures, available to 2020-21.
Estimates for 2021-22 and 2022-23, found in the department's portfolio budget summaries, have not been used to assess Senator Wong's claim but are included for completeness, with projected CPI figures drawn from the federal budget.
Where possible, Fact Check has included temporary aid provided by the Australian government to combat COVID-19.
A spokeswoman for Senator Wong told Fact Check her claim was based on data from the department's yearly statistical summaries, which differ slightly from the standard series preferred by Fact Check.
Senator Wong has also included estimated spending to June 2023 but excluded temporary COVID-19 aid.
What the data shows
Senator Wong said annual aid was on average 28 per cent lower under the Coalition than under Labor.
The data shows that, in nominal terms, aid to Solomon Islands averaged at $171.7 million per year under the Coalition, compared with $228.5 million under Labor.
That means the annual aid budget was on average 24.9 per cent ($56.8 million) smaller under the Coalition.
As the chart shows, there was a spike in aid spending from 2018-19.
This came after the Coalition agreed to help build an undersea telecommunications cable linking Solomon Islands and Papua New Guinea, replacing a contract signed with Chinese telecommunications company Huawei.
For this, the government budgeted $53 million in additional aid to Solomon Islands in 2018-19, and another $30 million in 2019-20.
The standard series shows the nation also received $15.9 million in temporary pandemic aid in 2020-21, or roughly five per cent of the $303.7 million given to Pacific nations plus Timor-Leste.
The Coalition plans to give a further $174.8 million in COVID-19 aid to the region in 2021-22, and another $332.4 million in 2022-23.
The gap between Labor and the Coalition widens further once the figures are adjusted for inflation.
In 2011-12 dollars, Australia's aid to Solomon Islands averaged at $235.7 million per year under Labor then fell to $154.4 million per year under the Coalition.
In other words, the annual aid budget was, on average, 34.7 per cent ($81.8 million) smaller under the Coalition.
Notably, the data also shows that the decline in expenditure began under the previous Labor government, which, in nominal or real terms, spent less in its last year than its first.
Is it a fair comparison?
Although the numbers show that aid to Solomon Islands fell under the Coalition, its term coincided with the winding up of the Regional Assistance Mission to Solomon Islands (RAMSI), a multinational peacekeeping and capacity building operation that aimed to re-establish law and order during a period of growing civil unrest.
Led and largely funded by Australia, the mission began in July 2003 and lasted the 14 years to June 2017.
Director of ANU's Development Policy Centre Stephen Howes told Fact Check the intervention "was a response to a type of disaster" — namely, a breakdown in government — that "resulted in a tripling of the aid budget to Solomons".
For that reason, Professor Howes said, comparing what happened during and after the mission was "not informative" because it was similar to comparing aid "immediately after a natural disaster and, say, ten years after that disaster".
"The decline in aid as RAMSI came to an end actually started under Labor," he added.
Indeed, data provided to the Senate (question 215) in November 2013 by the department of foreign affairs shows that Australia's overall contribution to RAMSI decreased under both parties, with a particularly large fall recorded in 2012-13.
The University of Tasmania's Richard Herr, who has previously led the University of Fiji's Centre for International and Regional Affairs, similarly described the mission as "essentially like delivering humanitarian assistance after a natural disaster".
In an email to Fact Check, Dr Herr said that it would be difficult to quantify exactly how much of the aid budget went to RAMSI, which comprised multilateral and bilateral aid along with a peacekeeping component.
However, "RAMSI was such a large infusion of special purpose aid that it seriously skewed the figures," he said.
Analysis by the independent think tank the Lowy Institute shows that RAMSI boosted Solomon Islands' share of Australian aid to Oceania from 3 per cent to 24 per cent.
University of Queensland political economist Shahar Hameiri told Fact Check he believed that RAMSI would account for "the main difference" between the Labor and Coalition budgets, and said the intervention was precisely why "at its peak … Solomon Islands was the world's second most aid-dependent country".
Professor Hameiri added that "the correlation between the money spent and the extent of Solomons' gratitude is shaky", since "almost all of the money associated with RAMSI went back to Australia" through the use of consultants and the Australian Federal Police, for example.
"It was a classic case of boomerang aid," he said.
Alexandre Dayant, director of the Lowy Institute's Development Economics in Asia and the Pacific project, told Fact Check that while Senator Wong was "technically right" on the numbers, it was important to note that much of the aid between 2009 and 2011 in particular was tied up in RAMSI, and that "a lot of the aid was also boomerang in nature".
Mr Dayant explained that as the mission wound down, so too did the funding attached to it.
However, he said: "None of the substantial development and governance programs operating alongside RAMSI were cut, and in fact have grown as more funding has been freed up from the drawing down of RAMSI."
Principal researcher: David Campbell
factcheck@rmit.edu.au
Sources
- Penny Wong, Interview with RN Breakfast, April 21, 2022
- Penny Wong, Interview with 7.30, April 20, 2022
- Mark Dreyfus, Tweet, April 20, 2022
- Anna Powles, Tweet (leaked agreement), March 24, 2022
- Fact Check, Has the foreign aid budget been cut five years in a row?, May 25, 2018
- OECD, Official Development Assistance
- LNP, The Coalition's policy for foreign affairs, September 2013
- Julie Bishop, Five billion dollar aid budget to focus on the region, January 18, 2014
- DFAT, Australia's International Development Assistance Program 2013–14
- DFAT, Budget summaries, 2021-22 & 2022-23 (Table 2)
- DFAT, Standard time series (Table 4)
- Development Policy Centre, Australian Aid Tracker (Destinations)
- DFAT, Statistical summaries, all
- Lowy Institute, Australia's costly investment in Solomon Islands: The lessons of RAMSI, May 2014
- Australian Government, Independent review of aid effectiveness, April 2011
- Julie Bishop, Media statement, June 19, 2018,
- DFAT, Supplementary budget estimates 2018-19 response to question on notice (DFAT_QoN_017)
-
DFAT, Supplementary budget estimates 2013-14, response to question on notice (Question no. 215)
