World Vision chief executive officer Tim Costello
World Vision chief executive officer Tim Costello

Aid budget cuts 'madness'

A FORMER Australian of the Year has called cuts to the Federal Government's aid budget "madness".

World Vision Australia chief executive Tim Costello said the government's decision to remove $3.7 billion of aid over four years in the Mid-Year Economic and Fiscal Outlook was a "breach of faith."

"When is this madness going to stop? Every six months for the past three years, the aid budget has been sliced into," he said.

"The latest cut means the Government has siphoned off a total of $11.3 billion over the past year - that's an outrageous sum of money for a wealthy country to deny vulnerable people.

"The globe is currently facing the most pressing humanitarian burden since World War II, and Australia is not immune from the flow-on effects of these problems.

"This decision by the Government shows they are totally out of touch with not only Australian values, but also with what's happening in the world today."

Federal treasurer Joe Hockey released the Mid-Year Economic and Fiscal Outlook including reductions in aid spending and a far bigger deficit than previously forecast.

Mr Hockey said revenue had suffered following falling commodity prices.

"In the last six months unforeseen events have hit the Australian economy," he said.

"In particular, we are now witnessing the largest fall in the terms of trade since records began in 1959. This has been faster and deeper than anyone expected."

"Our nation's export income has not been what we expected. For example iron ore, which is one fifth of our nation's export dollars, has fallen from $120 a tonne at the beginning of this year to around $60 a tonne today.

"The price of wheat, which is one of our largest agriculture exports, has fallen 20% since the budget."

ActionAid Australia executive director Archie Law said cutting aid was "stealing from the world's poorest people".

"This is a new low for the Government. It's repugnant that Mr Hockey would dip into the aid budget yet again like it's his piggy bank. This isn't a victimless crime, these are real human beings - men, women and children who are having their lives crushed by a cruel and ruthless government," he said.