Financial Review Debate — Ministry of Foreign Affairs and Trade

The Government has been under a lot of pressure in the last couple of months over the pitiful level of overseas aid. The report of the Foreign Affairs, Defence and Trade Committee on the Ministry of Foreign Affairs and Trade stated that New Zealand’s ratio of official development assistance to gross national income is currently 0.24 percent, compared with the target of 0.7 percent set by the United Nations Millennium Development Goals. The 0.24 percent level has been present throughout the 5 years of the Labour Government.

Last March, aid organisations in New Zealand were so upset that they joined with the Council for International Development in what they called a Point Seven campaign. They want to invest in a better world by getting our level of aid up to 0.7 percent of gross national income (GNI) by the year 2015.

This month the Government has had two further embarrassments. Firstly, the Norwegian Prime Minister, Kjell Bondevik, visited New Zealand. As he spoke around the country he said that Norway had a level of 0.96 percent of GNI, which is exactly four times our 0.24 percent, and that the level would shortly go up to 1.0 percent of GNI.

The Government had a further embarrassment about a week ago when Kofi Annan, the UN Secretary-General, made a big speech on the Millennium Development Goals. He said that nations had to get up to that 0.7 level very quickly if those development goals were to be met—goals such as halving the number of people in the world who live on less than US$1 a day. There are 1.2 billion such people in the world today. It is a disgraceful figure.

We have to do something towards getting to 0.7 percent. Kofi Annan said that every country must have a timetable to get to that level by 2015. New Zealand does not have a timetable. A year ago the Government talked about getting to an interim target of 0.35 percent of GNI by 2006-07, but nothing was done on that. There is no timetable.

I would like the Minister to explain why there is no timetable—because there is no reason. New Zealanders support overseas aid. We saw that in the money given to the tsunami victims. Virtually 100 percent of the New Zealand population said it was great when the Government came out with a special package of $52 million, plus $16 mission over the next four years. All the Government needs to do in order to get to that 0.7 target by 2015 is to give about that same amount extra each year—roughly $60 million a year—up to 2015. The Government should have the courage to do that. People would buy into it.

One-third of the aid that Norway gives goes through non-government organisations. It has a huge number of people on the ground in overseas countries, and when those people return they help build a consensus in the country for a high level of overseas development assistance. The Norwegian Prime Minister said—and he is a Christian Democrat, conservative Prime Minister: “There is a national consensus. We’re giving a high level of overseas aid, and we need to give it.”

Those Millennium Development Goals are very laudable. For instance, beyond reducing the number of people who live on US$1 a day or less, the goals aim to halve the proportion of people in the world who do not have access to safe drinking water, and there are 1 billion of those people. Another goal is to halve the number of people who do not have basic sanitation, and there are 2.4 billion of such people. A further goal is to get universal primary education for all boys and girls in the world. There are 900 million people in the world today who are illiterate—two thirds of them are women. We need decent conditions for the 1 million slum dwellers in the world. We need to reduce child mortality by two-thirds; 10 million children a year die because of preventable disease.

So we need to put the effort in, to do our part in the world, but we are not doing that. New Zealand is way down the bottom of the OECD table at the moment. It is a disgrace.

I take great pleasure in responding to that particular speech. From 1999 to 2002—the first term of this Government—most work in the aid area related to the restructuring of NZAID. I will talk more about that in a minute. That was a very important thing to do—to set up a semi-autonomous agency that had a very clear goal of poverty elimination and that focused on the Pacific. In some countries—and I could name them—aid is something that is used in order to promote one’s foreign affairs ideas and to win friends and influence. New Zealand is very pure about aid. Aid is about poverty elimination and the Pacific. That was quite a change, and quite a lot of work had to go into growing a New Zealand aid agency.

Since 2002, at the beginning of the Government’s second term when I was given the particular role of Associate Minister of Foreign Affairs and Trade with responsibility for NZAID, we have increased aid money by $30 million, plus the $58 million—as was mentioned by my colleague Keith Locke—that went this year toward the tsunami. That is a substantial increase. The difficulty is that had we allocated that money and not had a growing economy, I imagine that aid would constitute 0.3 percent of gross national income (GNI). The difficulty is that we have a growing economy, and although we are giving more as a country, we are sort of paddling to stay up at the same percentage of GNI. That is a problem we have.

The previous speaker made a comment about the Norwegian Prime Minister coming here. There is an extraordinary difference between the Norwegian economy and ours. As a member of Cabinet, I could only salivate when he spoke about, I think, $35 billion in cash reserves—not a surplus done by accrual accounting, but real money. I think he said there was $35 billion in real money stowed away. Heavens above! I would be able to give some away, too! It is a very different situation from that in New Zealand.

For all that, in the 2003 survey announced at the OECD meeting—and because we were seated in alphabetical order, I was sitting beside the Minister responsible for aid in Norway—New Zealand scored higher than Norway. Why did we score higher? Because the survey was about trade equity. It was about refugees taken into a country as a percentage of the population. It was about the peacekeeping work we did, as well as the money we spent on aid. That survey saw us in holistic terms in terms of aid—aid not necessarily being cash. The Norwegian aid agency actually came to New Zealand following the tsunami and asked how it is that we do it so well. We may be small in terms of the amount of money, but I have utter pride in terms of how we deliver out there. I will stand by that and fight that corner for many a long time.

An aid budget of 0.7 percent of today’s GNI in today’s currency would require an extra $600 million. So if the previous speaker is really saying that that is what he wants to spend, then he has to play the game of priorities. Where would he take that $600 million from? The member cannot be in a party that is calling for universal support for students—at a cost of $400 million—then ask for an extra $600 million for aid. This is a game of priorities—well, it is not a game, but it is a serious decision about taking us forward.

I think that New Zealanders really want to be involved in a good aid agency. So good are we as an aid agency that we should think about whether we are working to meet the millennium development goals. One of the millennium development goals relates to core education. For a long time in the Pacific—and also back to the Colombo Plan—we spent something like 80 percent of the aid education budget on scholarships to bring students to New Zealand. That is now down to 50 percent. In the Solomon Islands, people who operate in a non-cash economy still have to find SI$600 per term to get a child into primary school. Our aid commitment is, I think, between NZ$12 million and NZ$14 million per year, which means that within 3 years we can ensure that in the Solomon Islands we meet the millennium development goal of having every child—male and female—able to receive core education. That relates not only to the classroom, the teachers, or the books, but also to water.

That sounds funny. It relates to sanitation, because girls do not go to school unless there are decent lavatories that provide them with privacy. That may sound strange, but there are no lavatories in many of the schools I saw in the Solomons; the bush is used. That means that young girls do not go to school at certain times of the month.

We are extending that effort into Tonga, where a huge amount of work has been done. I think of Vince Catherwood, a marvellous leader in our own Ministry of Education for several years, who has retired from there and taken on a wonderful role in Tonga working to redesign and, again, to ensure that we meet core educational objectives. We are moving on to Vanuatu in the same area; again, there is the same great need as in the Solomons. I have huge pride for what we are doing in NZAID.

I will tell just one story from the tsunami. The tsunami happened just as I started a trip down the Whanganui River. I said that we could spend whatever money was needed, because we have an emergency fund. I thought there would not be very many dead. When I finished the trip, 2½ days later, I found that there were a lot. I arrived at the office, and what did I see but a magnificent whiteboard. All this consular work was going on in order to care for New Zealanders. On the whiteboard was a note stating that a man involved in the water and waste-water industry had rung up and said that he was a water engineer and that he would like to go over and help. His name was put up on the board. The next thing, in rang one of the agencies—Oxfam—which said it needed some water and sanitation engineers. Gotcha! NZAID lined them up. The board was full of brokerage deals done by NZAID, because it was trusted by the agencies and by people, and it delivered.

New Zealanders have such a fabulous reputation overseas. Right now, an earthquake has hit again in that same area. We have a New Zealand doctor over there. He was chasing the perfect wave 5 years ago and decided to stay there. He said that it is so easy to clean up malaria but that no one does it very well. He is in there again today, because we are supporting him in his continuing work, not just to do with the tsunami but to do with the wiping out of malaria. He made contact with us immediately. He said that he had the doctors but he needed money for a helicopter. Done! The helicopter was out there, instantly, within hours, so that we could check on the health of people in outlying villages. That is concrete work. That is work that achieves a goodness.

Yes, I would love—I dream of—aid spending of 0.7 percent of GNI, but I am aware of what my colleague the Minister of Health has to do to get meningococcal vaccines. I know what she has to do when members of Opposition parties say that we need vaccines for this and vaccines for that. Members will remember the whole bird flu thing and everything else that went through. I know the costs of that, and I know that I have to juggle and move us forward. I acknowledge that we will move forward in absolute definition—that we will move forward to meet those millennium development goals in our own backyard and do it in such a way that we partner people and respect them. We will not be there to use people and to plaster a kiwi over everything to show that New Zealand did it. No, it is about facilitating and strengthening the people who are there.

That is not the only area that I am particularly proud of in terms of foreign affairs. I am here today because the Hon Phil Goff is in the Pacific, and because I am very proud of the leadership that New Zealand has taken inside the Pacific Islands Forum and with the Pacific plan. Again, it is our manner of working. I am also extremely proud of the trade work done by the other member of the triumvirate, the Hon Jim Sutton. Members should think of the trade work that New Zealand has been involved in in foreign affairs since Labour has been in Government, and of the relationships that we have developed. Members should just think of how many overseas visitors in the last 3 weeks have wanted to come to this country and talk with us. We are no longer an island at the bottom of the world, just north of the Antarctic. We are somebody that people want to engage with. I am proud of New Zealand’s work in foreign affairs.

Finally, I am well aware that in 3 weeks’ time I leave for New York and for our work on nuclear non-proliferation and disarmament.

Report noted.

Ministry of Health