Russell Trood (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on a matter of the gravest public interest: Australia’s foreign policy. We have heard a great deal about this since the Rudd government came to office in November, and there have been two broad themes. The first, predictably enough, is a kind of consistent, carping criticism of the Howard government’s foreign policy. I had some differences with aspects of that foreign policy, but by any measure it established a distinguished period of achievement. I could spend the time that I have in this debate listing those achievements. If, God forbid, the Rudd government were to remain in office for 11 years, I think it would be hard pressed to point to a level of achievement as distinguished as the Howard government’s foreign policy.

The second theme is the Rudd government’s foreign policy agenda. This is very grand. After nearly six months in office, we have a pretty good idea and a pretty clear understanding of the intentions of the Rudd government in relation to foreign policy. It is a very big agenda, very big indeed. It seems to be directed towards taking Australia to the world. Anywhere there is a problem, a challenge or an issue, the Rudd government—presumably the Minister for Foreign Affairs or the Prime Minister himself—will be there to try and lend a hand. One can gain a flavour of how big this agenda is by looking at last night’s budget papers. If we look at the portfolio budget statements for the Department of Foreign Affairs and Trade and the agency strategic overview on page 15 and the next 3½ pages, we can see a long list of activities that the Department of Foreign Affairs and Trade is expected to undertake during this government’s period in office, including:

The department will … work to strengthen political and economic engagement with Europe and pursue a new partnership with the European Union …

…            …            …

The department will lead whole-of-government efforts to combat international terrorism ...

…            …            …

The department will work to re-energise the international non-proliferation, disarmament and arms control regimes.

…            …            …

… the department will contribute to the launch of a post-2012 global agreement on climate change.

And so it goes on—a long list of activities which the department is expected to undertake. The obvious question for the government, and for all of us, is: how is DFAT going to undertake these activities? With the resources it has available, how is it going to achieve all that is expected of it? The equally obvious answer is that it is not going to achieve all that is expected of it—or perhaps we should say, more correctly, that the departmental staff, being conscientious and professional as they are at all times, will struggle to achieve even a modest part of the agenda that the Rudd government has set for them—because the reality is that last night’s first Rudd government budget gives virtually nothing to DFAT to undertake its core responsibilities and functions. In fact, the funding base of the department will actually decline over a period of time.

This is not a new problem. I have been talking about this issue since I arrived in this place in 2005. The Rudd government’s triumph in its first budget is to drive the funding of foreign policy to a new low. DFAT’s operational budget has been declining, and the Rudd government has achieved a new low. In 1990, operational funding for the department was 0.11 per cent of GDP. During the Howard years, it was sustained at around 0.08 to 0.09 per cent of GDP. This was in the context of a rapidly growing economy, so it was a significant commitment of resources. Now, in the 2008-09 budget, funding for DFAT’s operations has reached a new and historic low of 0.07 per cent of GDP.

If we look at the detail in the budget we can see how dire the situation is for the department. If we look at page 49 of the portfolio statement, where the forward estimates are laid out, we can see that the last Howard budget had an estimate of $926 million for the department’s operations. The first Rudd budget estimates a figure of $920 million, a decline of $6 million. By 2010-11, that figure will have declined to $900 million. We are going backwards. In a period of rising inflation, in a period of increasing GDP with an expanding foreign policy agenda, the Rudd government is actually causing the department administering our foreign policy to go profoundly backwards in terms of its financial resources.

If we look at output 1, we see that this is the core of DFAT’s functions; it is the engine room of Australia’s foreign policy. This is the place where we find reference to policy development, trade expansion, representational activities—all the things that we know to be absolutely fundamental to the conduct of a serious foreign policy. It is a very forlorn picture indeed. The 2008-09 estimates in fact provide a modest increase in funding of about $23 million, but it is about 3.9 per cent of the budget for this particular output. With inflation rising at about 4.2 per cent, the department is actually going backwards with this output. By the end of the year it will have less money than it had in the budget year 2007-08. What is more alarming is that the estimates for staffing of the department in this area have declined by 13 per cent—a reduction of around 305 staff.

Public diplomacy is an area of growth in almost every foreign ministry of comparable interest around the world. Canada, the United Kingdom and the United States are all expanding their public diplomacy activities. Indeed, last year the Senate Standing Committee on Foreign Affairs, Defence and Trade produced a report, Australia’s public diplomacy: building our image, in which we closely investigated the state of Australia’s public diplomacy. The committee recommended an increase in funding—and I interpose here to say that the government has still to respond to that Senate report.

The government, perhaps intuitively, has responded to the report by allocating an increase in funding—another $20 million—to public diplomacy, but it is almost all related to the Shanghai exposition. If you take out the $20 million there is no further expansion, no further funding for public diplomacy in this particular budget. So we are not making any progress on this fundamentally important area of foreign policy.

DFAT’s budget has now reached a state of chronic underfunding. It is so serious that, as dedicated and as professional as they are, the DFAT staff are under unsustainable pressure to fulfil their responsibilities. It is not just about having fewer cocktail parties or encouraging ambassadors to live in shabbier residences or having fewer cars in diplomatic convoys or things of that kind. The declining resources will have a serious impact on Australia’s national interests, on the representation functions of the foreign service, on protecting Australians through consular activities, on policy development and analysis, on trade expansion and market access and, critically, on intelligence gathering. In other words, the government is failing in the performance of every important function that relates to the conduct of Australia’s foreign policy, its place in the world and its responsibility for protecting Australia’s national interest.

The Minister for Foreign Affairs has commissioned an internal review of DFAT’s outcomes, priorities and resources. Whatever that review might deliver, whatever that review might produce, it will have been an abject failure and a complete waste of time if it does not result in a substantial increase in DFAT funding. I call upon the Rudd government to take the matter of foreign policy seriously. Forget the rhetoric. Forget the creative ‘middle power diplomacy’—whatever that might mean. Focus attention on the thing that needs to be attended to—that is, the declining resources of the Department of Foreign Affairs and Trade. It needs to be allowed to do its job properly. At the moment, the policy settings will not elevate Australia’s foreign policy to the place where the Rudd government rhetoric wishes it to be; rather, it will result in the emasculation of Australia’s foreign policy and, more importantly and more seriously, it will profoundly compromise Australia’s national interest.