An Update on Changes to Government Funding for NGOs

In March CWS staff members attended both Auckland and Wellington meetings hosted by the Ministry of Foreign Affairs and Trade (MFAT) for Non Government Organisations. MFAT outlined significant changes in the Sustainable Development Fund (SDF) and how it would be managed. A new date was announced for a second round of applications: April 15, but in acknowledgement of the difficulties faced in Christchurch, Christian World Service has until April 30 to file applications. The Chief Executive and Secretary of Foreign Affairs JohnAllen has appointed a three person Selection Panel which will meet in May to make the decisions.Money from the next round is unlikely to be disbursed before 30 June 2011. This time the process is more transparent and more guidance is to be offered by government officials.

The new process retains the focus on sustainable economic development and it is unclear whether the regional ratios will be maintained – we do not know how these were met in the first round. One group not aligned with any agency tried to replicate the first round process from available information and concluded that none of those agencies that they knew about should have received funding.

Coming at the same time as internal restructuring, MFAT stated that 80% of the SDF will be for programmes over $500,000 with the remaining 20% being used for smaller and more innovative programmes. NGOs will now be required to prepare a Concept Note for consideration by the Panel, and then if selected asked to work with MFAT to agree on the final application. Programmes can be spread over three to five years. Unlike the last round, MFAT will provide feedback to NGOs throughout the process.

The Government is interested in the direct relationship of a NZ NGO with the partner rather than funding into an international organisation. It is looking for the added value that the NZ NGO brings (not simply funding and evaluation) and for ‘innovative partnerships’ with other groups such as universities, the private sector and volunteers. The Government is also interested in the links the NGO programme might be able to make with its own aid programme.

Mr McCully’s position on Foreign Aid

In recent statements Mr McCully has reiterated his intention to change the way New Zealand conducts its foreign affairs, and in particular through MFAT. At a speech made to the Institute of International Affairs in April he noted that MFAT spent $63 million of a $525 million aid budget internally – an overhead of 12%. The government plan is to cut costs in diplomatic missions, open up ‘a closed shop’ and consider new ways of staffing them – note the recently advertised position for New Zealand’s High Commissioner to Kiribati – normally it would be an MFAT appointment. It also intends to cut the number of individual aid programmes administered by MFAT from over 800 last year. Mr McCullystated that he was ‘keen to do more work through partnerships with NGOs.’

In the speech he noted the major changes happening in the global economy with China likely to overtake the USA as the major player and India leaping into third place. The Government has expressly stated that it wants to lift New Zealand exports from 30 – 40% of the Gross Domestic Product (GDP). It is endeavouring to put in place a foreign policy that will make this happen as well as increasing the role (and therefore benefit) of New Zealanders in this process. Every indication is that the aid programme is part of that strategy. Mr McCully has identified agriculture, tourism and major infrastructure as places offering such opportunities for New Zealand business and research. In an address to February’s Resilience in the Pacific Conference at Victoria University’s Institute of Policy Studies, he also spoke of the ‘absolute priority to renewable energy initiatives’ and the challenges facing the 50,000 people crowded onto the atolls of Kiribati. Increasing the assistance budget for Kiribati from $3 million a year to $30 million is part of this strategy.

CWS Comment

CWS is grateful for the many individuals who expressed concern to us and/or the government about the impact of the changed funding scheme. We appreciate the efforts made by the national church leaders in making their concerns about the functioning and priorities of the SDF scheme (shared by most NGOs) known to the Prime Minister, Mr John Key and the Deputy Prime Minister, Mr Bill English. We believe this has contributed to changes in the process.

CWS is working to test the new process through a second round of applications. We want to take Mr McCully at his word on funding for New Zealand NGOs. Last time advice from MFAT was that some of our partners were doing too much – apparently it is sufficient to build rainwater tanks rather than strengthen the local partner through the process to do even more. Our partners have reiterated their support for us and have proved willing to go the extra mile to meet a new set of requirements but remain deeply worried about how their work with local communities can continue.

There is a heavy emphasis in the new guidelines about furthering New Zealand’s national interest with the use of NZ volunteers, consultants, businesses and universities. This can run counter to good development practice where decision-making belongs with the local community who also can find the expertise they need locally – this may be more appropriate and cheaper than using non-New Zealand resources. In international debate this is sometimes called ‘tied aid’.

The foreign policy focus of the SDF remains on sustainable economic development and linked to trading interests without mention of New Zealand’s international obligations to United Nations initiatives like the Millennium Development Goals. Questions remain about who will benefit from this focus and how it will affect the most vulnerable communities.

The opposition has raised concerns about the appointments to the Selection Panel: Peter Kiely is a lawyer to the National Party, Therese Walsh is an accountant and the Chief Operating Officer for the Rugby World Cup 2011 (another of Mr McCully’s responsibilities) and John Hayes MP and Chair of the Foreign Affairs, Defence and Trade Select Committee (to which MFAT reports on aid spending and policy). Missing from this equation is any NGO or civil society input and it can arguably be influenced by those closest to the National Party. MPs have previously been part of similar committees but sat alongside NGO and MFAT representatives.

20 April 2011