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Joe Hockey's 'better bang' foreign aid cut delusion


Federal Budget Papers

Foreign aid is never popular, and it wasn’t going to come out on top in a federal budget that appears to have been designed to revive the Government’s political fortunes.

But we were not counting on Treasurer Joe Hockey announcing the largest ever cuts to aid in our history, given the aid budget had already been savaged in last year’s May budget and then in the mid-year (MYEFO) statement in December.

Last week's Budget stipulates an immediate $1 billion cut from the aid allocation, with a total of $3.7 billion being stripped over the next three years. The cuts will take Australia’s aid to the lowest levels in our nation’s history.

Some of our neighbours including Indonesia, Vietnam and Laos had their aid programs slashed by 40 per cent. But those with which we have refugee resettlement deals - PNG, Nauru and Cambodia – escaped with little or no reduction to their programs.

As a nation, we have demonstrated to the world that we have no shame when it comes to the treatment of asylum seekers. Now it’s as if the aid cuts are being worn as a badge of honour.

Joe Hockey talks about the ’targeted outcomes’ philosophy of the cuts, ‘build[iing] the prosperity and assist[ing] with poverty alleviation in our region’, in order to get ‘better bang for our buck in foreign aid'. But leading aid economist Stephen Howse argues the opposite: ‘The only way that you could get a 40 per cent cut in one year, is basically to kill off projects mid-stream. And, you know, that will be very damaging to the relationships, and it will also involve a huge waste of money.'

The emerging picture is that the cuts are profoundly inept and counter-productive, intended only for short-term political gain. Cambodia, one of the least successful aid programs survives, while others where the experts say there is ‘better bang’ are terminated. As Howes says of keeping the Cambodia allocation, 'it's clearly a political decision, rather than one based on performance'.

Others working in aid and development are equally bewildered. Micah Challenge head Ben Thurley points out that Australia 'has a growing economy worth $1.6 trillion and the sixth lowest debt in the world’ and therefore the cuts represent a ‘deeply ungenerous and short-sighted act’ that Caritas Australia CEO Paul O’Callaghan says will ‘weaken our global leadership role'.

If the foreign aid cuts are consistent with anything, it’s with the short-term political fix nature of the rest of the Budget. The needs of real people do not figure beyond what is necessary to secure their vote. At least big business is very disappointed at the lack of credibility of the Budget, and the incredulity they share with those in the aid and development sector might be enough to hold the government to account for a Budget that does not stand up to proper scrutiny.

Michael MullinsMichael Mullins is editor of Eureka Street.


Topic tags: Michael Mullins, foreign aid, Joe Hockey, Federal Budget, Caritas Australia, Micah Challenge, Stephen Hows



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Existing comments

I too am disappointed with Joe Hockey on foreign aid. He should have wiped it altogether. As Lord Peter Bauer demonstrated time and again, Government foreign aid is the equivalent of welfare spending, and has analogously disastrous effects in the recipient countries. The fastest route out of poverty and underdevelopment has been the enforcement of the rule of law, the respect of private property, free trade and the free market. Lesson 1. Hong Kong. Lesson 2. Singapore. Lesson 3. Taiwan, Mauritius, etc, etc. That's the constant teaching of history the government should be impressing on our underdeveloped neighbours. Heck, even a former leftie like Bono gets it: "Capitalism takes more people out of poverty than aid", he now says. Inculcating that lesson is vastly superior to billions of foreign aid dollars. I hold the Liberals more to account on this, because they must know the truth but don't have the guts to declare it, whereas Labor and the Greens are just clueless.

HH | 15 May 2015  

Hear, hear, HH. And the most important private property that should be respected is our personal income. Too many people seem to think that it's so kind of the government to let us keep more of what our employers/customers/clients give to us in a free exchange for our goods and services. This was evident in Leigh Sales' interview with Joe Hockey when she accused him of giving a handout to small businesses by giving them a tax-break. Hockey retorted that he was simply giving them back more of their own money. I'd like all governments to get more of this mentality. The more they let us keep our own money, the more we will spend it responsibly. Now too many people in our society think that they are owed something. As Frederic Bastiat wrote in 1848, "Government is the great fiction through which everybody endeavours to live at the expense of everybody else." I am definitely in favour of giving to those in distress. But this should be done as far as possible by us as individuals. Government bureaucracies swallow far too much of what is meant to be aid, and much of the aid only perpetuates corrupt or incompetent governments.

John Ryan | 16 May 2015  

HH is correct. But both ideology and ego reject the truth. For example, Lyndon Johnson’s Great Society was a well-meaning program to eliminate poverty and racial discrimination. Yet it proved counterproductive and created a permanent underclass in the USA. Black professor Walter Williams wrote, “The welfare state has done to black Americans what slavery couldn’t do, what Jim Crow couldn’t do, what the harshest racism couldn’t do. And that is to destroy the black family.” In a similar way Australia introduced no-fault divorce and single parenting welfare in the 1970s which has led to endless welfare and a permanent underclass. A 2008 survey by David Mackenzie and David Edridge showed that youth homelessness was the fallout of three decades of changes including no-fault divorce and single parenting, yet they concluded, “Few would seriously want to reverse these social changes.” People always blame everyone except themselves. Blaise Pascal presciently wrote in his Pensées, “[man] conceives a mortal hatred against that truth which blames him and convinces him of his faults.” But what does rejection or hatred of truth really mean when Christ said, “I am the Way, the Truth and the Life”?

Ross Howard | 16 May 2015  

Some comments here are indicative of Australia's current mentality of greed is good. No suggestion how Australia could assist African and neighbouring nations bring about a civil society. This means bringing about judicial change, anti-corruption measures and implementing property law. No recognition that even billionaires like Warren Buffet understand that the wealthy need to be taxed at the same rate as the poor so everyone is contributing to the national and international common good. And some remain oblivious to the fact that poverty has been a constant in Australia and that it was just hidden by an absence of legal instruments like the Family Court. Poverty is not a "lifestyle choice". All three have forgotten that Christ said, that it is "easier for a rich man to pass through the eye of the needle than enter the kingdom of heaven" or "the last shall be first and the first shall be last". Australia has forgotten that no where in the Bible does Christ say he who dies with the most toys wins! As a nation we have truly lost our way and are fast becoming an international pariah.

Dr | 17 May 2015  

Very simple - lets add a tax on superannuation balances. There is about $1.5 trillion dollars in our balances. This would raise a mere sum of $13.5bn pa going to the poor and needy.
Billy Shorten can show us some leadership! Bipartisanship is in the air!
And we can also add to the pile by taxing the future fund which is there to meet the unfunded public service liability.
And if we want more, stop the refunds of frankings to the tax rate super funds are taxed - 15%. Another few billion.
Stop whingeing and start taxing! Plenty to go round! We could easily send $20bn pa or a we just greedy armchair critics?
Have a go.
Eureka Street can lead the charge.
Or is it a case of me pay for this - not me.

Damien | 17 May 2015  

I say to the heartless here, one day I hope you ask for help and are kicked to the curb to die.

Marilyn | 18 May 2015  

The slashing of Australian government aid to Africa by 70% in this budget shows the economic policy disconnect between government and Australian industry. Australian mining interests throughout Africa are extensive and extremely lucrative. Communities throughout Africa need engagement with the nations who are making significant profits out of their sovereign resources. Australians will gain greatly from our mining initiatives. Some Africans will enjoy gains but a well targeted government aid program to build a comprehensive response to poverty and instability in the region has been abandoned through negligence by this government. Aid has never been the sole solution and yet it does contribute to the provision of water and sanitation; better health and education services and the ability for people to build on their own desire for a future.

Jack de Groot | 18 May 2015  

We seem to have a revival of what was once called the U-Jack agenda. "I'm all right. Stuff you Jack." Here we are squatting on the greatest per capita amount of territory and natural resources in the world, which we took by force and retain by force, and we begrudge sharing it in any way with those less fortunate. Admittedly handing over fish to eat does not provide long time help, and merely makes them dependent and lacking in responsibility, but teaching them how to fish, and providing incentive for development by way of education and encouragement will make everyone better off. The gifts we have can become stepping stones if used wisely, or stumbling blocks if we cling to them like false gods and so increase the divisions and tensions between the 'Haves' and the 'Nots'.

Robert Liddy | 18 May 2015  

HH and his supporters seem to be of the belief that it's an either/or situation: either we give aid to needy countries or we "encourage" them towards a capitalist economy. In fact, without foreign aid many of the poorest countries will never have the chance to enter the privileged capitalist club, due to lack of education, infrastructure, health facilities, adequate drinking water, etc. I agree with our esteemed treasurer in one thing, i.e that we should target our aid better, but the targeting should be on the basis of need, not political expediency.

Vin Victory | 18 May 2015  

I'm glad at least that the first three comments didn't add insult to injury by claiming their far right wing economic views are based on their religious beliefs. That would be heresy and utter hypocrisy.

AURELIUS | 18 May 2015  

R.L. let's not patronise the citizens of underdeveloped countries. They know how to fish! It's their governments that are stopping them "fishing" by overbearing laws and taxes, socialism and crony capitalism. Based on all the evidence, the adage should be "Give a man a fish and you feed him for a day. Teach a man to fish and he'll slap you in the face for wasting his time telling him what he already knows. Get the government off his back and he'll have a flourishing fishing export business up and running inside six months."

HH | 18 May 2015  

We can't look after our own mentally ill, homeless and indigenous communities, either humanely or spiritually Rather we have the great Christians abandoning the enormous mission fields of our own country, running off to other countries which I suppose are a bit more exotic and entertain the heroic notion of giving up an easy life style for a difficult one in the belief that this is some sort of personal purifier. Why abandon our own? Why not care for them first with our taxpayer funded aid programs and when we have established successful, sustainable programs then turn our attention to others in need in foreign lands. Perhaps the government is cutting back on foreign aid precisely to provide the where with all to solve our distressing social problems, to make this an inclusive society for all of our citizens. Wouldn't surprise me, Michael, if that is the case considering that the Jesuits are responsible for the formation of the two bogey men in the eyes of the emotional - Abbott and Hockey.

john frawley | 18 May 2015  

"Teach a man to fish and he'll slap you in the face for wasting his time". Perhaps so, but neither he nor his wife will slap you in the face for working with them to establish a fish processing plant near the fishing grounds, or an accessible school for their kids that doesn't rely on the intermittent attention of a government struggling with issues that don't necessarily prioritize teaching their poor citizens to read. Have a look at the way Caritas does its developmental work - it certainly doesn't patronize or infantilize or impose solutions. It works with the people (and not just the men) or it doesn't get involved at all. There are models of aid that don't include handouts, guys. HH, John Ryan and Ross Howard have a classical small government philosophy and it's not all wrong. It's just lacking full today's world information.

Joan Seymour | 18 May 2015  

Obviously the idea if foreign aid has changed since the '50s. Do you believe the AusAid funded agribusiness program which provides improved access for farmers and agribusiness to "new knowledge underpinning the production and marketing of agricultural outputs at higher levels of productivity and quality" in countries such as Indonesia is a form of socialism?

AURELIUS | 18 May 2015  

Actually, an adage that slightly less pithily but more accurately reflects the history of government aid programs might begin: “Give a man a foreign aid fish, and his government and the crony fish company that profits thereby will divert all their creative energies to making it so that you give him another fish tomorrow, and the next day, et in saecula saeculorum, so they and their pals can get their cut. Even if it means keeping the man and his family locked in grinding poverty.” The trouble with the bleeding-heart lefties on this site, as typified in several comments above, is not that they’re overly suspicious of greed as a motive in human action. It’s that they’re not nearly suspicious enough.

HH | 18 May 2015  

A lot of ignorant opinion on display here - from people who obviously have never seen good foreign aid projects. I was part of such a project and I can tell them that we benefit as much, if not more, than the recipients.

Russell | 18 May 2015  

"Scrooge McHockey" cut an immediate $1 billion from Australian O/S aid, with a total of $3.7 billion to be stripped from O/S aid over next 3 yrs.

John Cronin, Toowoomba Q | 18 May 2015  

Knowing how to fish is not much of a help when countries like Australia and European ones too have destroyed your fishing grounds by one means or another? This issue is directly linked to the central concerns of the Catholic Social Gospel and not to the apologias of neo-Con Catholics who trawl their second hand slogans from Novak, Weigel, the Acton Institute, Legatus and Crisis Magazine. To get a gauge of where they stand in relation to Pope Francis' teaching on economics and the environment, just read them. They even turned themselves inside out when JP II and Benedict made criticisms of the NeoCon agenda.

David Timbs | 18 May 2015  

As a single mother, now with 3 wonderful adult children, I am aghast at some of the commentary on this topic of 'aid'. and the 'right' way out of poverty. Such profound ignorance on how deeply challenging it can be to put food on the table and provide shelter for the family is both sad and disturbing. What stands out most for me in all this commentary is either the presence or absence of gratitude in the tone of each commentary. I thought Christians believe that we were all born in the 'image of God' and have intrinsic dignity. Did anyone see the British Series on the ABC "The Super-rich and Us"? Check out how the rich get richer at the expense of the poor. So much for the rule of law, the free market etc ... I do not own a house (it was unencumbered and gambled away by my husband), I do not have a job (200+ applications and counting), and I do not own property (I have access to my future burial site - with my dead brother) ... and I'm deeply grateful to all the good people in my life who help me and my children get through the bumps and troughs. Awareness of interdependence is the key ... we need each other!

mary tehan | 18 May 2015  

I am quite disgusted at some of the comments made about cutting and eliminating foreign aid. Many aid programs have helped communities become more self reliant, through building programs, education and yes food to save lives. The trickle down effect doesn't work. The rich get richer and the poor starve and die. So we should be giving much more.

Kate | 18 May 2015  

@ Aurelius. I didn't actually get my economics from any right wing extremist. I got them from reading history, libertarians and economists of the Austrian school. They made the most sense to me. One of my favourites was from Von Hayek. "A claim for equality of material position can be met only by a government with totalitarian powers." Unlike some at this site, and other places, I find the track record of regimes that want to create a more equal society by means of coercion a little wanting in their respect for human rights. When it comes to a religious justification for my beliefs, I found the following quotation from St Paul apt. " 8 and we did not eat anyone’s bread without paying for it; but with toil and labor we worked night and day, so that we might not burden any of you. ....10 For even when we were with you, we gave you this command: Anyone unwilling to work should not eat. 11For we hear that some of you are living in idleness, mere busybodies, not doing any work. (2 Thessalonians 3:8-11) @ Marilyn. If I ever ask for help, I hope that the several organisations I have donated to regularly over the last two decades may reciprocate.

John Ryan | 18 May 2015  

David Timbs, you're spot on: "...when countries like Australia and European ones too have destroyed your fishing grounds by one means or another". My point exactly (see above). Enforce property rights! Are we not, then, in total agreement at least on this point?

HH | 18 May 2015  

John Ryan, that's fascinating. I was also deeply influenced by Hayek. I still remember 1975 in year 12 (6th Form) reading his two monographs "Kinds of Order in Society" and "The Use of Knowledge in Society" over breakfast one morning and being mesmerized at the profundity and brilliance of his analysis. Not part of the school curriculum, of course - I probably did myself out of a few marks that year devoting huge amounts of my time to Hayek and Rothbard rather than studying my required courses. I was the winner, I'm sure. Anyway, Hayek came to Australia around that time, after winning the Nobel Prize for Economics. But no-one here, even in the days of a pre-overtly hostile ABC, really understood what he was on about. Robert Moore ("Monday Conference") just stared blankly at him. (I must pay tribute to my late father here for introducing me to Hayek and Rothbard. Seriously, who else in Australia in 1975 was in possession of Hayek's "Kinds of Order in Society", let alone leaving it around on the breakfast table? RIP Dad.)

HH | 18 May 2015  

HH: I notice no reference to the rest of what I wrote:

This issue is directly linked to the central concerns of the Catholic Social Gospel and not to the apologias of neo-Con Catholics who trawl their second hand slogans from Novak, Weigel, the Acton Institute, Legatus and Crisis Magazine. To get a gauge of where they stand in relation to Pope Francis' teaching on economics and the environment, just read them. They even turned themselves inside out when JP II and Benedict made criticisms of the NeoCon agenda."

I wonder why the great silence HH? Perhaps the fact that you have made five comments so far is a clear indication that you need to prop up a rhetoric which is supported by flawed major premises. If you have actually read what others are saying here you would not be in such a hurry to dismiss them in such a cavalier manner.

David Timbs | 19 May 2015  

Michael Mullins writes : "As a nation, we have demonstrated to the world that we have no shame when it comes to the treatment of asylum seekers. Now it’s as if the aid cuts are being worn as a badge of honour."
It comes as no surprise when we hear of refugee mistreatment in Nauru. Reporting on the Nauru Detention of asylum seekers, the Sydney based Immigration Advice & Rights Centre (IARC) reported on a female detainee saying her son was sexually assaulted 3 times. In 2014, the boy began self harm & also began to speak of suicide. Maybe PM Abbott should institute a new set of Australian Awards - the "NAURU AWARDS". Then Mr Abbott should award them to his Ministers Scott Morrison & Peter Dutton – citing their credentials of “outstanding Lack of Compassion & Hardness of Heart towards Refugees & Asylum Seekers.”

John Cronin, Toowoomba Q | 19 May 2015  

1. "Check out how the rich get richer at the expense of the poor." Easily proved wrong, Marie Tehan (and Kate). In 1800 there were 1 billion people in the world, and by today’s definition of grinding poverty, more than 75 percent were thus poor. Today there are 7 billion people, and only 7 percent are in grinding poverty. And for the last few decades that figure has been diminishing with increasing rapidity, and btw, completely independently of foreign aid (which per capita has remained static, if not fallen). So the proportion of the world’s population that are grindingly poor has plummeted from 3 (at least) out of 4 in 1800 to 1 out of 14 (and rapidly diminishing) today. Put that another way: the vast bulk of the world’s population has moved up from grinding poverty over the last two centuries, even as that population has grown by a whopping factor of 7. Economic historian Deidre McCloskey aptly calls this "the great enrichment." It’s simply impossible to construct a narrative that “the rich are getting rich at the expense of the poor” on those figures unless you can make the case that somehow the relatively tiny number of citizens of, e.g. North Korea, Burkina Faso, Cuba, and a handful of other destitute nations and communities (.5 billion), are, with exponentially mounting efforts, creating fabulous amounts of wealth that 6.5 billion of the rest of the world is somehow massively sequestering. Over to you! 2. The "silence"? Simple, DT: Time being a scarce resource, I give priority to evidence-based, rational conversation over refuting petty ad homs and conspiracy theories. Still, I agree with the one substantive point you made re. fishing.

HH | 19 May 2015  

Indonesia now says it doesn't even want any of Australia's foreign aid. So that's a saving of hundreds of millions Hockey could have made at the stroke of a pen, but didn't. Moreover, Australia gives about 40% of its aid through multilateral organisations such as U.N. agencies. That's right - the U.N. As in: Haiti earthquake, emergency medical supplies couldn't be unloaded for weeks because the floor space of the Port Au Prince storage facility was taken up with crates of ... UN-supplied condoms. Thereby attesting to the ideological designs of U.N. "aid", and recalling Canadian General Romeo Dallaire's experience in Rwanda during the 1990's massacres, that UN and other aid groups were responding to the crisis by "covering the country with rubber". At least that foreign aid may have been unintentionally beneficial - enterprising villagers used the condoms to fill up potholes in their roads. So, for starters, cancel aid to Indonesia and scrap anti-human ideologised UN aid, and not only will we save on our bottom line, but we'll have done the underdeveloped world a huge favour. Next step: look more honestly at the disastrous effects of propping up economically unsustainable communities at home (the remote indigenous communities) and abroad (e.g. Kiribati).

HH | 20 May 2015  

John Ryan, there's no reason social equality policies can't operate in a democratic country to keep capital-driven market polices in check/balance. It's more likely regimes will be driven by global money. It's the rampant, unjust, corrupt form of capitalism in developing countries that makes the elected governments look like a puppet for corporations. A country like Haiti could at least be at the same level of socialist Cuba if democratic processes are respected.

AURELIUS | 20 May 2015  

"Indonesia now says it doesn't even want any of Australia's foreign aid." The world is so simple isn't it? You read a book at breakfast and it makes everything so clear and your own privilege, and responsibility, conveniently disappears. You should look at your sentence again, HH. If you understood that in the oh-so-limited way that you appear to have, then perhaps it's a good time to put down the books and go out and experience the world - learn a little something from people instead. There is huge scope for us to give to the Indonesians and, as I said before, we'll get more out of it than we give.

Russell | 20 May 2015  

It’s hard to work out how completely cutting foreign aid is somehow going to help reduce poverty and improve living standards more effectively without the valuable resources of a well organised aid program. I have seen effective projects funded through the old AusAID and private aid agencies that have provided education support and infrastructure development that were greatly valued by the recipients. In the absence of these projects, telling people to stand on their own two feet and develop the rule of law, respect private property and become capitalists, all theoretically noble objectives, just does not cut it. This is not a hand-out mentality but support for well targeted development. The laissez faire survival of the fittest model is not the only approach. Regarding Indonesia, total Australian Official Development Assistance to Indonesia in 2015-16 will be around $366 million (source DFAT). While much less than before, I can’t imagine the Indonesian Government not wanting to receive any of this assistance for its citizens.

Brett | 20 May 2015  

Brett and Russell, thanks. I'm not opposed to all foreign aid. Notice I stipulated *Government* foreign aid at the very outset to be the problem. Just as I believe government welfare spending has pernicious effects domestically, so I believe government foreign aid is analogously detrimental. You may not subscribe to that notion. Fair enough. But subscribing to that view of government welfare doesn't entail I oppose domestic charity and private aid - and I certainly don't, even if I believe even private aid and charity have to be delivered prudently. (Eg sending container loads of used clothing to a country might wipe out its burgeoning textiles industry. What's the best way to avoid that pitfall? The answer is not always obvious.) But Brett, you touched on something there I want to clear up. No-one is telling citizens of underdeveloped countries to "stand on their own two feet". That's just as patronising as "teaching a man to fish" as I pointed out above in the old leftist slogan. Heck, if you've been surviving for years on $1.50 a day, you're incredibly resourceful and entrepreneurial and don't need to be told to stand up! Julian Simon showed how by far the great majority of the human race, including the poor, tend to produce much more than they consume over a lifetime, if they are allowed to just get on with their own lives. So the picture is this: humans are by nature incredibly resourceful and productive. They're bursting to produce. The reason any given community is not productive, usually is because there are coercive laws and/or other external incentives/disincentives in place working against this. I mean, does anyone seriously suggest that the Chinese under Mao woefully failed to produce enough rice to feed themselves, even at gunpoint, because they were inherently lazy? If we establish the rule of law, and a respect the rules of private property and free trade (all of which entails light taxation etc) you don't need to then add aid, or even education (though of course that would accelerate the process, if it's a decent education) to kickstart the move from dire poverty. People being what they are, it'll happen! As it has, time and again. America didn't become one of the wealthiest places in the world by 1850 because of foreign aid or public schooling. It got there because people were left to their own devices to produce and own what they produced. That's my point.

HH; | 20 May 2015  

More book wisdom from HH, but obviously no real world experience. This will come as a great surprise to HH but when he speaks of "people" lifting themselves by their own bootstraps that doesn't apply to everybody, anywhere - not even in the wealthy U.S. I was in the U.S. a couple of years ago and the deprivation was amazing. Oxfam runs programs for our Indigenous people in Australia. HH, your lack of experience, revealed in these grossly oversimplified pictures you paint, should lead to a little modesty, and perhaps an attempt to learn a little more from the people involved and working in the area.

Russell | 21 May 2015  

Russell, just imagine that we had been trying the free market for the last 40 odd years. I mean a truly free market, without any government intervention in wages, banking, prices, social programs, etc. If the result was the dire poverty that you described in the US, would you still be advocating that we stick with the free market? Yet how is it that people don't ask the same question after decades of government directed welfare, amounting to trillions of dollars? The war on poverty has not worked. It has been an abject failure. In response to this failure people want more government money and more regulation. I fully back HH's view. Leave people alone and they will sort out what they want to do, buy and sell, without the government sticking its nose in telling them what's what. He who governs best is he who governs least. Finally, I find your statement about HH's penchant for "book wisdom" and lack of "real world experience" both snide and patronising. The works the we have both read (Yes HH, I have read Rothbard as well.) are based on the works of economists who had a wealth of real world experience. They just don't happen to see the source of the world's problems, and hence the solutions, the same way that you do!

John Ryan | 21 May 2015  

That's just wrong; the welfare state hasn't and never will solve everyone's problems, but it's a lot better than doing nothing. I know this from what has happened to members of my immediate family, and feel very lucky to be a baby boomer. My growing up was in the golden years (of big government intervention) of the 50s and 60s. Saying that welfare is a failure because there are still poor people, is like saying the government shouldn't require us to wear seat belts because people are still dying on the roads.

I apologise for the disagreeable tone of my comments. I get fedup at HHs justifications for greed and the whole science-denying silliness about climate change, because of course the market never fails. Of course it fails. I very much respect book wisdom (I'm a librarian) but you need to read widely, respect expertise and to know where and how to apply what you learn from books. I think it's clear that HH has little experience with government aid projects and he should listen to those who have had. From his Jokowi quote I think he also knows little of Indonesia, but proceeds to build an argument on that shaky foundation. Enough - nothing but experience will ever change HH's ideology.

Russell | 21 May 2015  

HH the US was rich in 1850 because it did not pay for land and it benefited from slave labour. Australia's wealth falls to the same sources. Hayek's work is only appreciated amongst narrow minded conservatives such as Margaret Thatcher's Britain and the Bush's USA. Small wonder the parable of the Good Samaritan is not for you.

Dr | 22 May 2015  

Thanks for responding on a couple of points Double H. I didn’t see your distinction between public and private aid, possibly because you did not really spell it out. In any case, the value of foreign aid/development assistance is in the end use rather than the source of the funds and I can only repeat that valuable development projects were funded through the former AusAID and by private agencies. Still it’s good to know you are not opposed to all foreign aid. On “standing on your own two feet”, you may not like the term Double H but that is exactly what you are saying and what you are encouraging governments to say with your opposition to all publicly funded assistance. I’m not looking at aid programs to try to rebuild some sort of failed socialist utopia attempt. Initiative flows best when it flows with self interest. But if the basic requirements for growth are a struggle, if doctors and schools are a luxury and if simple infrastructure is not there, then it is hard to get past square one. Many of the examples of successful market economies listed in your first post on this subject developed with strong leadership (maybe not so much the rule of law) and growth based on the initiative of their people, often in the absence of natural resources. But they also had the primary advantage of strategic geographical locations around the world, an important part of their development.

Brett | 22 May 2015  

Thanks, Brett. If I could sum up the difference between what I’m trying to say and what you’re hearing me say, it’s this: imagine some big bully standing on top of a little guy, pinning him flat to the ground. I’m saying to the bully, “Get of his back!”, whereas you’re thinking instead that I’m addressing the little guy, saying “Stand on your own two feet!”. In what you’ve said about the benefits of (government) foreign aid, you’ve not addressed the fact that, for deeply structural reasons there are many hazards and negative feedback loops to government foreign aid such that its whole basis is problematical, regardless of any benefits an individual project which might have delivered: among other faults, foreign aid fosters corruption of ruling cliques, has suspiciously high administration budgets, a disproportionate number of “consultants” (aka “poverty barons”) on 6 and 7 figure salaries, is targeted with Western ideological motives (e.g. population control, donor country foreign relations), crowds out local enterprise and basically through its model of condescension breeds resentment from donor countries. Kiribati has for decades had all the doctors, schools and basic infrastructure it needs. Yet it’s a chronic basket case, with no resolve in the government to move on, as the international aid is virtually guaranteed, year after year regardless of how the government behaves. (Australia’s aboriginal remote communities are suffocating under a similar form of kindness, which they perceptively call “sit down money”.) But there's a positive side to my view on foreign aid, too. If you have a few minutes, check out this fascinating interview with Michael Fairbanks, entrepreneur and co-founder of the philanthropic SEVEN Fund on alternative, free market attitudes to delivering effective, non-condescending “aid” (in itself a problematic term): www.freemarketseries.com/42390-michael-fairbanks. Fairbanks’ model of assistance in Rwanda was so much appreciated, the Rwandan president Paul Kagame, one of the world’s truly great leaders today, gave him a Rwandan passport.

HH | 25 May 2015  

Thanks for the reply Double H. I do understand what you are saying but I don’t think there is much value standing on the sidelines yelling at the bully, especially when the bully can be the system or the absence of opportunity in that country. It doesn’t help the “little guy”. You take the worst case examples of corruption, barriers and aid failures and treat them as the norm to make the case for no publicly funded assistance, yet you disregard successful aid and development projects as not representative. Sorry, I don’t agree and I’m relieved public policy on development finance is not based on your criteria. The SEVEN Fund you mentioned seems to be making a useful contribution to development assistance on its own terms. Good that it is happening as well, but it is not the only way to go.

Brett | 28 May 2015  

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  • Paul Jensen
  • 22 May 2015

Neoliberal economics underlies the recent Federal Budget and the major parties’ welfare policies. It proclaims the end of the age of entitlement and speaks of small government, as it embraces the privatisation of 'service delivery'. Faith based organisations are involved as agencies of the government, often forced to impose punitive measures rather than the promise of the 'carrot' that is their purpose. 


Xenophobia threatens Mandela's vision for a diverse South Africa

  • David Holdcroft
  • 20 May 2015

South Africa has again experienced the ravages of xenophobic violence. The official response reflects a fearful government that needs to resort populist scapegoating that stigmatises migrants. It has found itself incapable of creating the inclusive narrative that was evident 18 months ago when the country came together to mourn Nelson Mandela.