Govt wants more say on $480m foreign aid

Murray McCully says NZAid's payments have become handouts. Photo / Mark Mitchell

The National Government plans to take more political control of a half-billion-dollar foreign aid programme, and wants to change the way the money is spent.

Foreign Minister Murray McCully has ordered two reviews into NZAid.

He said yesterday that the agency's $480 million annual budget would not change, but he criticised its goal of "poverty elimination" as far too broad.

Payments had become "a handout rather than a hand up", he said.

"You could ride around in a helicopter pushing hundred-dollar notes out the door and call that poverty elimination."

Mr McCully said it was too early to say what shape the structural changes would take.

He wanted NZAid to be part of a "New Zealand Inc arrangement" and work to achieve stated Government policy goals.

NZAid's functions and its 200 staff could be folded back into the Ministry of Foreign Affairs and Trade, reversing Labour's decision to separate the entities in 2002.

The States Services Commission is examining its "organisational arrangements", and the agency and the ministry are jointly looking at its "mandate".

Mr McCully said New Zealand's aid policy would shift from NZAid's current focus on "poverty elimination" to one closer to the Government's policy aims, such as economic development in the Pacific.

The Pacific gets 53 per cent of New Zealand's aid, and Mr McCully - the minister responsible for New Zealand's aid budget and NZ Aid - said the region would get "a greater share of the total aid budget".

But Labour's associate foreign affairs spokesman Phil Twyford said Mr McCully was "tampering in secret".

Mr Twyford said changing New Zealand's aid focus could mean closing parts of the aid programme.

"Our aid programme touches the lives of millions of people," he said. "It is also a serious investment of taxpayers money."

Mr McCully should be open with his plans and get input from development experts and the public.

The move has also worried the aid giant Oxfam.

Its New Zealand executive director Barry Coates said last night that overseas aid would be at risk of becoming a political tool in the service of the Government's foreign policy objectives if the changes Mr McCully was suggesting went ahead.

NZAid was separated from the Ministry of Foreign Affairs and Trade to avoid the possibility, identified in a review, of giving "mixed messages and for a conflict in aims over what aid was for", said Mr Coates, who is also board chairman of the Council for International Development.

"There are many examples of aid being spent for political purposes rather than the benefit of the country concerned."

"NZAid used to be within the Ministry of Foreign Affairs and Trade and there was a scathing report on the system at that time that was deemed to have considerable failings for the delivery of aid.

"So we are very concerned that what's happening now is potentially reinstating those kind of problems that existed until NZAid was split off."