IS MONEY SPENT IN AUSTRALIA REALLY OVERSEAS AID

More than $600 million of Australia's foreign aid over the past two years never went overseas.Development assistance of $644 million to Iraq, was in fact the repayment of a 17-year-old Iraqi debt. Including it in Australia's foreign aid figure makes the nation appear more generous than it is, an investigation has found. Other funds used to assist the settling of refugees in Australia was also counted as part of the foreign aid budget.Plan Australia, is one of many agencies that do not agree with counting the debt repayment as aid. A spokesman for the agency which monitors the expenditure of the foreign aid budget said "The debt forgiveness, which includes 57 per cent interest accumulated over more than 10 years, has been dubbed "phantom aid". The average Aussie wouldn't think that paying off a wheat debt, which in effect is just a book transfer, is a good form of aid," Mr Wishart said. "It doesn't build schools, feed the hungry or house the poor."New analysis by a Sydney-based watchdog contends that a third of the $3 billion allocated to foreign development assistance year this will never leave our shores or has been directed away from poverty alleviation programs overseas. Counting as much expenditure as possible as aid has become increasingly important since Australia made a pledge to the United Nations 18 months ago to increase official aid to $4 billion a year by 2010. AusAID and the Department of Foreign Affairs and Trade, in commenting on the investigation, said all funds counted as official assistance fell within OECD guidelines.

Source: Compiled by APN from media reports. June 2007

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