New Zealand Aid and Development Dialogues

Hello and welcome to an NZADDs update,

Just after 2pm today I took a step back from my computer, did some yoga, put on my favourite CD of dolphin songs, lit some incense, and tried to find my happy place.

Yes, that’s right, it’s budget day, which means I’ve spent the afternoon exhuming spreadsheets, squinting at PDFs, and muttering in an exasperated way at my computer, “even the Australians release their aid budgets…”.

The incense has long wafted away, the dolphin CD has come to an end, but here’s the state of New Zealand’s aid spending.

This coming financial year New Zealand plans to spend just over NZ$1.4 billion on foreign aid. That, as you can see in the chart below, is a big leap from what Treasury thinks we will spend in the current financial year.*

What’s behind the increase? Our aid programme spends in three year tranches. The size of the current three year tranche has not increased. But the coming financial year is the final year of the tranche. And so the aid programme has to hurry next year to spend the full three year allocation. It’s task is made harder by the fact that it’s currently behind schedule (you can see this if you compare this year’s numbers with last year’s analysis).

Why’s it behind schedule? The answer is likely because it’s struggling to spend its new climate change aid. That’s fair enough. It’s hard to get new projects off the ground in a hurry, and the rapid rise in New Zealand climate aid is a genuine achievement. Still, it doesn’t lessen the spending challenge in the coming year.

I haven’t received GNI data from Treasury yet. So I cannot compare NZ aid to GNI (the standard international measure of aid generosity). When I can though, I will put out a post on the Devpolicy blog. I will also publish my analysis of the recent OECD review of New Zealand aid (it’s actually a remarkably stinging review).

For now though one more question some of you may be asking is what is planned for the next three years after this tranche is over? The answer is nowhere to be found (of course). But if you look at the chart on page 94 of this Treasury PDF (I wasn’t joking about my afternoon), you will see a pink line that is forecast to steadily drop. That line is not our aid budget exactly (it excludes departmental spending, and includes a few other comparatively minor items). However, trends in that line will be driven by aid. And it’s falling pretty rapidly, which would seem to suggest aid cuts are coming our way.

My guess is things aren’t as bad as they appear, and that the line only falls because climate aid is currently being excluded, or something else. Nevertheless, it would be more reassuring not to see a downward trend. Not to mention that it would be more transparent to be given some plain and simple estimates of what our aid budget might be in coming years, along with explanations as to why.

Not today though. I will go and re-light my incense.

Terence for NZADDs admin.

* Footnote: all numbers in this post include our aid to Cook Islands, which is no longer an eligible recipient of ODA. As a result our actual ODA spend will actually be slightly less than the numbers here. The difference will be minor though (<50 million is my guess). Also, there may be other very small amounts of ODA eligible spending which I can’t dig out of Treasury’s spreadsheets.