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Infrastructure investment in the pacific is welcome, but it can't come at the expense of the world's poor

Save the Children is urging the federal government to avoid slashing $500m from the foreign aid budget to finance a new infrastructure facility in the Pacific, which now looks set to go ahead
28 March 2019
On Tuesday the Senate Foreign Affairs, Defence and Trade Legislation Committee handed down its report into the Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019, recommending it be passed without amendment.
The government has earmarked $500m of existing foreign aid funding for the new infrastructure facility, which the Bill enables if passed. The facility will provide loans to Pacific Island Nations for infrastructure projects.
Save the Children Australia’s Director of International Programs, Mat Tinkler said the facility was a good thing, but using aid money to finance it was counter-productive. He urged the Australian Government to resist further cuts to the aid budget, which has been cut in each of the past five federal budgets, in pursuit of greater influence in the region. 
“We welcome Australia’s increased investment in the Pacific, but funding infrastructure should not come at the expense of the aid budget, which help millions of the world’s most vulnerable children and families,” Mr Tinkler said. 

“Nor should we try to out-spend countries like China, who are prepared to spend more money and with less ties, when it comes to infrastructure in developing nations.

“Instead, Australia should try to do things better, for example by ensuring there is a development benefit to Pacific Islanders of Australian infrastructure, as well as a national benefit to Australia.

“Given the news the budget might already be in surplus and the Prime Minister could have an election ‘war chest’ of up to $70bn, any cuts to aid would be unnecessarily cruel. When the budget was in deficit, aid was repeatedly slashed. Now that we’re likely in surplus, the opposite must apply.”
Mr Tinkler said Australia should scale up investment in the economic building blocks of health and education.
“Malnutrition poses one of the greatest threats to the survival and development of over half a million children in PNG,” he said.
“Without a healthy, educated workforce, sustainable economic growth will continue to elude Pacific nations like Papua New Guinea. That’s neither in the interests of the Pacific, Australia or the broader region.” 
“We implore the Government to look elsewhere in the Budget next week to fund the Infrastructure Financing Facility in the Pacific.”
Mr Tinkler also expressed his concern at the lack of transparency around the administration of critical infrastructure loans in the region, which would be carried out by the Export Finance and Insurance Corporation.
“There are significant gaps in areas of risk management, transparency and monitoring when it comes to the administration of the facility, and this threatens to harm the effectiveness of the project as well as Australia’s reputation,” Mr Tinkler said.
For interviews, call Jess Brennan on 0421 334 918

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