Australian aid program ‘haemorrhaging skills’ after DFAT merger

By David Donaldson

Monday July 14, 2014

ausaid foreign aid dfat

There are concerns that a “haemorrhaging of skills” resulting from the dissolution of AusAID into the Department of Foreign Affairs and Trade will undermine Australia’s aid program into the future.

The simultaneous merger and aid budget cuts have led to a large number of DFAT staff applying for voluntary redundancies, most of whom are former AusAID employees. Aid experts suggest that, although the merger and cuts will make Australia’s aid program cheaper, it may also end up less efficient.

As of May 22, 149 non-SES and 12 SES post-integration DFAT staff had been approved for voluntary redundancies, while three more SES employees were expected to go in the following weeks. Twelve of the 15 SES employees leaving are formerly of AusAID; overall 60% of those applying are former AusAIDers. It’s expected that around 500 jobs will eventually go, mostly comprising former AusAID workers.

According to a DFAT staff satisfaction survey from May, 70% of pre-integration DFAT staff agreed that they felt “part of the team”, compared to only 33% of former AusAID staff.

Many believe the aid bureaucracy has become unwieldy following rapid growth under Labor, when AusAID grew from 798 to 1704 APS employees in the five years to 2012-13.

Benjamin Herscovitch of the Centre for Independent Studies argues that “the AusAID-DFAT merger is a wise rationalisation of resources. It should avoid duplication of some administrative functions and lead to a reduction in the number of bureaucrats needed to manage the aid program.”

“A review was probably in order,” one former AusAID employee told The Mandarin. “AusAID had begun to look like it had problems.” But he believes the extent of the changes introduced by the Coalition have been “damaging” to Australia’s aid program.

Indeed, there is scepticism among aid experts as to whether the path chosen by the government — completely dissolving AusAID into DFAT, rather than leaving it as a semi-independent body under the control of Foreign Affairs — was the best option.

Dissatisfaction created by what many see as poor handling of the merger is driving the exodus of aid professionals. “In late May on one day something like 900 person years of experience walked out,” said Margaret Callan of the Australian National University’s Development Policy Centre. “Very senior individuals since then have left. There are huge amounts of senior expertise leaving [the aid program]. You have to wonder about who are going to be the mentors for young people working on the aid program within DFAT. That’s a really serious issue.”

The Lowy Institute’s Annmaree O’Keeffe agrees. “There are some real risks in taking this approach,” she told The Mandarin. “Losing so much expertise can be very dangerous … It can be an area full of traps for young and new players.”

Some worry this has led to diplomats making decisions about aid programs despite lacking a background in the area, potentially leading to poor decisions. There are also concerns the DFAT practice of not employing in-country overseas nationals for policy positions appears to be spreading to aid programs, negatively impacting in-country technical and social expertise.

“More and more AusAID was recruiting locals in-country as experts because they have more contacts and a deeper understanding of local conditions,” Callan said. “We had quite senior overseas-based staff. In DFAT that has never been the case. So a lot of those people feel as though they would not be valued, and are leaving.”

There are efficiencies to be gained by integrating administrative functions, but O’Keeffe believes the government’s approach represents a missed opportunity in updating the way Australia delivers aid.

“There was an opportunity by demolishing the previous institutional infrastructure, you could create a quite different structure,” O’Keeffe said. “I’m not sure they’ve actually used that opportunity. In some ways it’s been a retrograde step back into the way it was in the 1960s … Those questions [about how to improve aid delivery] haven’t been asked, that’s the disappointing thing.

“It’s increasingly looking like a wasted opportunity for creating a different way. In some ways I think the Foreign Minister sees that, and the new Colombo plan is a smart move. I’m just not sure her colleagues get it.”

A preferencing of the structures and practices of pre-integration DFAT over AusAID has met with criticism. Aid delivery and diplomacy are “fundamentally different functions” — one is essentially about communications and the other spending money, as one expert put it — and there is some concern that diplomats and diplomatic structures will be given reign over aid delivery.

For example, the software used on aid projects has reportedly been replaced with DFAT’s programs, though the incoming system lacks sufficient complexity to track money and progress in high-spending and often long-term aid programs. This suggests, according to Margaret Callan, DFAT has opted for “less expensive over more expensive”, rather than the most appropriate software for the job.

Foreign Minister Julie Bishop’s office did not respond to a request for comment.

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