Aid is a national security investment - Australia

OUR foreign aid isn't about winning hearts and minds. Nor is it taxpayer-funded charity. Rather it's about poverty alleviation focused where Australia can make a difference to people's lives and where its resources can most effectively be deployed.

Our aid is a long-term investment in Australia's national security, and business must be a key partner.

Those are some of the key messages from the Gillard government's new strategic framework policy for foreign aid. It follows the Australian aid effectiveness review, the first independent review of aid policy in 15 years.

Australia's aid budget is $4.3 billion, or 0.33 per cent of gross national income. There's a commitment to increase overseas aid to 0.5 per cent of GNI by 2015. That's likely to double aid spending to about $8bn.

Remarkably, our aid flows are rarely under fire. The opposition has questioned whether increased aid to Africa is mainly motivated by winning votes for our UN Security Council membership bid. There have been media stories on inflated fees paid to a few aid consultants, especially in the Pacific. And during recent natural disasters, some talkback hosts have criticised helping others overseas when there are Australians who need help.

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But no one has been up in arms about the large amounts of development assistance we donate to other countries.

When it comes to taxpayer-funded aid we need to be selective. We can't be generous to everyone: the world is full of poor people who need our help.

That is why it's realistic the government's new framework prioritises aid funding to help poor people in areas of strategic importance to Australia.

While the government has committed to increase aid to Africa, it is sensibly focused on our region, with priority going to Indonesia, Papua New Guinea and East Timor.

The Asia-Pacific region should continue to occupy the lion's share of Australia's aid program. It's where our key security and economic interests are engaged. Africa isn't a strategic priority for Australia; any increase there should be modest.

The government has sensibly placed emphasis on sustainable economic development as one of the aid program's core strategic goals. Importantly AusAID has been directed to develop stronger links with Australian business.

Despite the strengths of the new framework for aid, it's disappointing that the government didn't take the opportunity to announce the creation of a ministerial portfolio to cover international development. AusAID will be the fifth-largest federal body in terms of expenditure by 2015. That suggests the need for it to be elevated from an executive agency to a full department of state with its own minister at cabinet level to maximise the effects of our increased aid spending.

Anthony Bergin is director of research programs, Australian Strategic Policy Institute