9 May 2018

Pacific to receive bulk of bolstered NZ aid budget

7:06 am on 9 May 2018

Pacific islands will receive the bulk of New Zealand's increased foreign aid budget, announced this evening by its Foreign Minister Winston Peters.

The Government is set to hike foreign aid by $US500 million ($NZ714 million) over the next four years, as part of its "Pacific reset" strategy. The funding boost represents a 30 percent increase in overseas development funding.

NZ First Leader Winston Peters

NZ First Leader Winston Peters Photo: RNZ / Rebekah Parsons-King

Mr Peters said it was time to reverse the decline in the country's aid support for multilateral and humanitarian agencies over the past decade, which had been sitting well below international averages.

He said the new funding would lift New Zealand's Overseas Development Assistance to 0.28% of gross national income over the next four years.

The money is primarily earmarked for the Pacific region - responding to climate change and other emergencies.

Mr Peters said New Zealand's under-investment in the Pacific over the past nine years had left it open to criticism that it had abandoned its neighbourhood.

"More troubling is that the previous government weakened our hand in the Pacific at the very time the region has become a more crowded and contested strategic space.

"Today that stops," he said.

The minister said the government was committed to supporting the adaptive work needed in the Pacific in response to climate change.

"Investment in practical projects, like the climate resilience project to reclaim land for urban development in Kiribati, will help protect Pacific homelands and cultures, and also reduce migration challenges in the years to come," he said.

Tebikenikora, a village in the Kiribati.

Tebikenikora, a village in the Kiribati. Photo: UN Photo/Eskinder Debebe

Mr Peters lamented what he described as the "lost capacity" New Zealand had sustained by way of dwindling financial contributions to multi-lateral institutions.

"New Zealand currently lies at the bottom of the OECD in terms of its contribution to multi-lateral institutions. That is shameful," he said.

"To influence others this has to change. So New Zealand will boost its funding to organisations like the World Bank and the Asian Development Bank as well as to UN agencies.

"New Zealand can play a significant role in the Pacific. But its challenges are mounting, and we alone cannot address them all," Mr Peters explained.

"We want our like-minded partners to focus more on the Pacific," he said, referring to a broad strategy to pool energies and resources with "partners who uphold the values of transparency, good governance and democracy".

New Zealand Aid funded mini solar farm in the Cook Islands.

New Zealand Aid funded mini solar farm in the Cook Islands. Photo: RNZI/Sally Round

Mr Peters said New Zealand's identity was anchored in the Pacific.

"What is good for them is good for us. We all know that if we look after each we are all better off, more prosperous, and therefore more secure."

He said the support was not just altruistic, but also "good economics".

"Prevention saves money. Preventative health strategies save far more taxpayer health dollars downstream by tackling health problems early.

"In the same way, development assistance helps to maintain a safer and more prosperous New Zealand over time, saving money that would otherwise be required in future defence budgets or in border control."

The Government will also boost funding for the Ministry of Foreign Affairs and Trade by about US$133 million over four years.

About $105 million of that will go toward operating expenditure, including hiring 50 new full-time staff.

The opposition National Party has hit out at the announcement, asking why the government plans to spend more money abroad while bleating about funding crises at home.

National's leader Simon Bridges said the Government was putting diplomats ahead of doctors.